Bangalore, Feb 27 : The United Planters of South India (Upasi) has urged theministry of finance to issue the necessary directive to Reserve Bank ofIndia allowing growers to convert crop loans into term loans with arepayment period of five years.Upasi vice president IJJ Rebello and Karnataka Planters Association (KPA)chairman Peter Mathias said the entire plantation sector in the country waspassing through a severe crisis due to various factors and sought the helpof the government to tide over the crisis.
They said coffee alone accounted for crop hypothecation loan of Rs 600crore, while the term loan liability of the sector was around Rs 200 crore.The planters had a preliminary round of discussion with the RBI, bankers andcoffee board, Mr Mathias said. RBI was receptive to the idea but wanted theministry to issue the necessary orders, he added.
The association is planning to take a delegation to New Delhi to lobby withthe ministry to accept the demand. Karnataka chief minister SM Krishna hadpromised to take the lead in organising the delegation to Delhi, Mr Mathaisadded.
Besides the changes in the loans, the planters also wanted the Centre toabolish excise duty of Rs 2 per kg on bulk tea and enhancement of boundrates to ensure a level-playing field for the domestic plantation sector.
The concession sought by the two organisations from the State governmentincludes reduction of the maximum rate of agricultural income tax from 50per cent to the rates prevailing in central income tax. The planters alsowanted the State to suspend payment of composition tax for the next threeyears besides exempting plantations of up to 50 acres from payment ofagriculture income tax. This will help the small and medium farmers whoaccount for nearly 97 per cent of the total holdings.
The other major demand is to bring down the rate of sales tax on tea grown,manufactured and sold in Karnataka from 8 per cent to 4 per cent and CSTfrom 4 per cent to 2 per cent as is being done in Tamil Nadu and Kerala..The planters said the future of coffee looked bleak, at least in the nearterm, with the production exceeding the demand. According to the latestestimates, global production is going to be around 115 million bags, whilethe demand is for only 109 million bags. On top of it the carry-over stockis around 32 million bags.
Mr Rebello and Mr Mathias said Upasi had already initiated a dialogue withthe trade union leaders in Karnataka, Tamil Nadu and Karnataka for a wageand DA freeze at the current level. "The issue was quite complex but we hopeto have a tripartite agreement involving the respective state governments,"they added.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
