With tea plantations responding poorly to the re-plantation and rejuvenation programmes, India could end up as a net importer of tea given the robust domestic demand, experts said. Plantation owners cite reasons like poor incentive, labour shortage, high level of tea prices and loss of yield in the shorter period for not opting for re-plantation.
While the annual production in India is approximately 925-975 million kg, the domestic demand is seen at around 800 million kg with the rest being exported. Any increase in production is absorbed quickly by higher demand, which is reported to have growing at a rate of 3-4% per annum, according to the state-run Tea Board.
Reports suggest that India consumes about 23% of total tea production in the world, and over 75-80% of its own output. “With the economy growing at 8-10% for the past few years, it would not be surprising if the domestic demand growth reaches the rate of 5-6%, given the income elasticity of tea,” a commodity expert told FE.
It is in this context that the efforts of the Tea Board and the various state governments to increase productivity of the existing tea estates assume significance. “Bringing new areas under tea plantation is impossible in the Indian situation. The only way to keep a healthy balance between supply and demand is to increase productivity through re-planting,” Pankaj Kapoor, managing director of Harrisons Malayalam Limited (HML) told FE.
The government efforts have not yielded good results, Ullas Menon of the United Planters’ Association of South India (UPASI) said. “The government subsidy is not encouraging and there is not really an incentive for re-planting,” he added.
Since its inception in 2007, the programme has managed to re-plant only in 7,000 ha (hectares) of the targeted 22,000 ha, hardly 32 % of the target. The Centre has created a Rs 4,761-crore special purpose tea fund for the programme. While 50% of the cost will be in form of loans, 25% would come from the government as subsidy and the rest will be borne by estate owners. The board plans to cover 212,000 ha over in a time frame of 15 years. Of this, 22% is in south, 46% in Assam, 28% in West Bengal and the rest is spread over Tripura and a few other states.
To begin with, a total area of 32,560 ha for replanting and 8,432 ha for rejuvenation will be taken up under the phase-I of the programme implementation during the 11th plan period (2007-12).The limit for re-planting has been raised from Rs 2.74 lakh to Rs 3.44 lakh per hectare.
Tea board disagrees with the allegation that the subsidy is less and cites studies by the Nabard, which says that the increased productivity after 4-5 years more than compensates the yield lost from uprooting a yielding tea plant. ?It is a commercial activity. We can only provide an incentive and not bear the entire burden. Estate owners only suffer in the short-run, while the benefits of increased production and lesser production cost cover it in the long-run,? G Boriah, director of tea development, Tea Board, told FE.
According to the estimates of the board, nearly 38% of the tea bushes in India are above 50 years old. “More than the productivity, the response of old plants to inputs like pesticides and nutrients is less. It increases production costs which cannot be absorbed by estate owners,” Boriah said. He agrees that the effort is generating a slow response, particularly from south India, due to labor shortage and higher wages.
Regarding the lower achievement, Boriah said that land had to be left fallow for more than 18 months after uprooting the old bushes. ?Taking into account the land yet to be re-planted but uprooted for the purpose, our achievement is good,? he said.