Extension of special revival fund welcomed

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The Union Budget proposal to revitalise the ageing cardamom, rubber and coffee holdings with a special fund for re-plantation and rejuvenation has been welcomed by the plantation sector. The Budget mentions that the fund will be similar to the Special Purpose Tea Fund (SPTF) formulated to increase the productivity of the tea plantations.

SPTF for re-plantation and rejuvenation of tea estates was launched last year as the biggest-ever productivity intervention programme by the Union Government to lift the tea industry's fortunes, severely dented owing to both senile tea bushes and depressed auction prices. The total corpus under SPTF is Rs 4,760 crore, spread over 15 years with a funding pattern of 25 % subsidy, 25 % promoters' contribution and the balance 50 % by way of loans from the banks.

Senile and less productive plantations are a drag on the economy and reduce the competitiveness, Ullas Menon of the United Planters' Association of Southern India (UPASI) told FE. "Re-plantation and rejuvenation of old bushes and trees help increase productivity and reduce cost. This will increase the profitability of the sector and help in facing challenges," he said. However, Prince George of Association of Planters of Kerala was apprehensive about the eligibility criteria for the fund in rubber.

"While we welcome the move, we would like to see all plantations being included in the programme irrespective of their holding size," he said. The plantation sector shares a fear that the Union Government may restrict the aid in coffee and rubber to holdings of less than 10 hectares, he added.

Rubber sector is facing problems with growers not keen on replanting due to the prevailing high prices. Besides poor yield, the quality of latex also declines, as the tree gets old. Delay in re-planting could result in lesser supply and increased cost in the future.