It is still gloomy for the plantations

By V. Jayanth

CHENNAI, SEPT. 19

The annual meeting of the United Planters' Association of Southern India (UPASI) held in Coonoor last week has failed to lift the spirits of planters. The inability of the Union Minister of State for Industry and Commerce, Mr. Omar Abdullah, to participate in the meeting and hear their grievances, has added to the woes.

With no signs of a pick up in auction prices of tea or rubber and coffee riding low, the plantation sector, with the possible exception of cardamom and pepper, remains gloomy.

Mr. E. K. Joseph, the new President of UPASI, said over telephone, ``The situation is still bad. Most estates have run up heavy overdrafts and many are on the verge of closure.''

He said a planters' delegation planned to meet the Union Industry Minister, Mr. Murasoli Maran, later this week, followed by a call on the three southern chief ministers - Tamil Nadu, Kerala and Karnataka - which cradle the plantations.

``Our memorandum and representations are already with them. This will be a courtesy call and we hope to appraise them with current developments. We are also planning to be in Delhi during the next Parliament session to deal with problems facing the plantations,'' the UPASI chief added.

According to the UPASI, tea production was lower at 800 million kg in 1999 compared to 870 m kg in the previous year. Exports also slumped to 190 m kg from a healthier 210 m kg in 1998. But the prices continued to fall all through the year and were now hovering at an average of Rs. 48 a kg.

Mr. M. H. Ashraff, past President of UPASI, has reiterated the industry's demand for the withdrawal of excise duty on tea. He urged the Centre to immediately halt the import of tea from any country either for re-export or domestic consumption as the local plantations had enough varieties and quantities to supply at international prices.

Though the performance on the coffee front was much better, sliding prices were again a major concern. The Ninth Plan output target of three lakh tonnes of coffee was reached in 1999-2000 itself. Exports were also ahead of target, reaching 2.34 lakh tonnes last year valued at Rs. 1,840 crores. Unfortunately, the decline in international prices continued unabated, ringing the alarm bells.

Mr. Ashraff said the rubber scenario was depressing. The average price of lot rubber tumbled from Rs. 47.50 in 1996 to Rs. 36.80 a kg in 1997 and to Rs. 27 in 1998 and 1999. With the Rubber Board projecting a huge surplus by the end of March 2001, prices were unlikely to recover.

The only hope for rubber is the possibility of using it to surface roads - in the form of rubberised roads that could be 35 per cent more economical on account of low maintenance cost and durability.

Cardamom and pepper, however, have fared well over the years. The output of cardamom reached 9,300 tonnes in 1999-2000 and is expected to cross the 10,000 tonne mark this year. The average price has also been stable around Rs. 490 a kg. Pepper has also done well, though there may be a slight setback in shipments this year.

Taking a cue from tobacco farmers in Andhra Pradesh, the planters are now appealing to the Centre and the State Trading Corporation (STC) to intervene in the market, procure the plantation crops and build buffer stocks to market them later when prices stabilise. They also want the commodity boards to launch domestic promotion campaigns for tea and coffee.

But their major concerns centre an the WTO commitments under which all QRs (quantitative restrictions) will go from April 2001. The UPASI has urged the Centre to set up a taskforce in the Commerce Ministry to review the implications of the WTO and evolve a strategy to protect national interests.

It has been pointed out that in the WTO agreement on agriculture, natural rubber does not come under the category of `agriculture'. Consequently, its `bound rate' of import duty is as low as 25 per cent compared to 40 per cent for synthetic rubber and 150 per cent for instant tea and coffee.

``Developed countries cleverly kept the bound rates for value- added products at fairly high levels so as to protect their domestic industries and dissuade developing countries from exporting them. The Indian Government must try and get the bound rates for coffee green beans, cardamom, pepper and natural rubber also increased to 150 per cent,'' an UPASI spokesman argued.

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