National » Tamil Nadu

Updated: June 26, 2012 03:10 IST

TANTEA fails to get the brew right, lands in financial mess

T. Ramakrishnan
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It hasn’t paid rent to Forest Department; unable to make statutory payments

The Tamil Nadu Tea Plantation Corporation (TANTEA), with over 4,430 hectares of tea plantations, is acknowledged to be the largest single tea landholder in Tamil Nadu and one of the few organisations in the world that has extensively raised clonal tea plant.

Yet, it is only a marginal player in the industry, accounting barely for 10 per cent of the State’s tea production. It produces around 100 lakh kg (10,000 tonnes) of tea every year. And it is a loss-making concern.

Since the merger of the Cinchona Department in 1990, TANTEA made profits in seven out of 21 years, exactly one in three years. Its perpetual precarious financial health is always cited as a major factor whenever the issue of hike in wages or providing monthly wages even to permanent workers is discussed.

Ironically, it was for providing employment to repatriates from Sri Lanka that the Corporation was created in August 1975. Despite being a government-run body, TANTEA does not provide monthly wages to its 6,100 permanent workers, including 5,000 repatriates. The workers are all on daily wages. As a senior government official puts it, the Corporation is, perhaps, the only government body in such an unenviable condition.

In the last few years, the finances of the Corporation have reached such a level that TANTEA has not paid rent to the State Forest Department for lands it has taken on 50-year lease [which came into effect from August 1976]. It has not been able to make some of the statutory payments such as Rs.2.23 crore gratuity dues to retired staff.

To honour the State government’s direction on bonus payment last year, the Corporation had to resort to inter-corporate borrowing of Rs.5 crore from the Tamil Nadu Forest Plantation Corporation (TAFCORN).

Under such circumstances, the scope for the Corporation undertaking on its own, large-scale improvement of housing and other essential services for the workers is narrow.

TANTEA has sought financial assistance of Rs.96 crore from the State government for a comprehensive programme of improvement of facilities. To fulfil its immediate requirements, the government has also been approached for Rs.5 crore.

Explaining TANTEA’s financial position, a senior official says the Corporation is aware that the first charge on its expenditure is payment of salary and wages to its workforce and has, in recent months, been able to meet its commitment smoothly.

Referring to the agitation by a section of the staff at Valparai in Coimbatore district early this month [where workers are not repatriates] against the non-disbursal of wages, the official says the problem was on account of the delay in transfer of funds through banks.

As for its overall financial condition, the government body gets its revenue mainly through the sale of ‘made tea’. Most of the tea produced is sold through auctions held at Coonoor, Coimbatore and Kochi. The sale price of tea in the auctions is influenced by various factors, including national and international, all of which are outside the ambit of the Corporation, the official says.

Notwithstanding these factors, the Corporation is now focussing on cost-cutting measures, the official says. Ban on recruitment, identification and redeployment of surplus staff and transfer of seven primary schools to the government’s School Education Department are some of the measures it is pursuing. Renewed thrust is being given to quality control and coordinated action involving sales and marketing wings on the one hand and tea factories on the other. Steps are on to increase retail sale.

More importantly, it is concentrating on the reduction of cost of production. The official says as per the provisional data for 2011-2012, the Corporation brought down the cost by about Rs.5.5 per kg compared to the cost of 2010-2011.

Though there are no clear-cut answers from the establishment to questions as to why the Corporation did not take to revenue-generating measures when it made profits even a few years ago, the official is hopeful that it is a matter of time for TANTEA to make profits again as the tea market is governed by demand and supply. When that happens, the Corporation may consider providing more welfare measures to its workers, mostly repatriates from Sri Lanka.

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