Increasing consumption through sustained campaigning is the panacea for the oversupply of plantation crops, feel planters. The mismatch between demand and supply often leads to depression in the prices, which the sector can ill afford given the high cost of production in the country.
UPASI, the planters association, has asked the government to lead from the front in promoting consumption. ?Growing surpluses is the root cause of the crisis in the sector and the industry is not in a position to invest money at this juncture for campaigns,? J K Thomas, former president of UPASI, said. ?We request the commerce ministry to allocate sufficient funds for generic promotion of crops in the 11th Five-Year Plan,? he said.
In a few years, the massive re-plantation programmes initiated for tea, coffee, pepper and cardamom will yield results, and production will increase substantially, he said.
?The government should spend sufficient money to wipe out the bigger surplus to create a supply deficit. Increasing the domestic consumption through generic promotional campaigns should be the major component,? he said.
India is a leading producer and consumer of all plantation crops but the growth rate of consumption has tapered over the years, putting pressure on the prices.
For instance, in tea, there has been a situation of oversupply of plainer varieties of tea in the last 10-12 years. This spurt in the supply of plain teas coincided with over-production from Vietnam of similar quality tea, creating instability. The appreciation of the Indian rupee is also putting exports under strain thereby adding to the instability.