The plantation sector in south India covers tea, coffee, spices and natural rubber. Kerala, Tamil Nadu and Karnataka account for almost one-fifth of the total tea output in the country and almost the entire production of coffee, natural rubber and spices. N. Dharmaraj, who is associated with the plantation sector for more than four decades and is the president of the United Planters’ Association of South India, spoke to The Hindu about the challenges faced by the sector.
What is the current situation of plantation crops in south India?
Tea and rubber plantations are losing money. The cost of production is higher than the sale price. Coffee is better. Commodities do go through cycles. But, since 2000 one has seen longer periods of lower prices and shorter period of high prices. In the case of tea, we had a safe captive market in the USSR before 2000. Now, though there is growth in the domestic demand, production is also increasing. In south India, the tea sector is highly dependent on exports. So, we need sustained growth of exports. In the case of rubber, consumption of domestic rubber has come down. The issue is imports are more than the gap between production and consumption. It is injuring the domestic industry.
What are the measures needed to revive the tea sector?
For the tea sector in south India, one key issue is the need to increase exports. We export 95 million kg to 100 million kg now of the nearly 240 million kg produced every year. Even if exports increase by 10 million kg it will make a big difference in south Indian tea prices. We have opportunities in countries such as Iran and South East Asia.
We have suggested to the Government to form a body with representatives from the Government and the industry that will fix targets for exports and work towards it. We are conducting a tea quality competition (Golden Leaf India Awards) for the last 10 years. It has demonstrated our capability to produce superior quality tea. We are trying to use it as an instrument to produce high quality teas. We need to work with the Government to take this forward.
What are the steps that will help the rubber sector?
Production started coming down since mid of last year. The annual production in Kerala now is 6.45 lakh tonnes against the average production of nine lakh tonnes because of low prices. Nearly 95 per cent of the growers are small holders and most of them are owner tappers. They will turn to short-term crops as these are located on the plains. The Government has to step in and say that import should be only to augment gap between domestic production and consumption, which is nearly 3.5 lakh tonnes.
An expert committee was formed for the National Rubber Policy.
The policy is awaited. The Government should impose safeguard provisions as the imports harm the domestic sector.
There is also an issue with the grade of rubber that is imported and that which is produced in India. The imports are block rubber (technically specified rubber) and just 15 per cent of the natural rubber production in the country is this variety.
To increase its production here, high capital is required. Rubber prices should be supported to extend the rubber sector to more States in the country.
How is the association working with the Government for the revival of the plantation sector?
As part of expert committee on rubber, we are working with the small holders. In case of tea, we have sought Centre's support to form a body to augment exports.
According to you what are the changes that the sector should go through to meet the current challenges?
Our costs are expected to continue to be high in south India. The social and welfare costs are one of the highest. So we lose competitiveness in the international market. There are structural bottlenecks and so there is a need for basic policy changes. It will help the planters take steps, such as replanting with high yielding varieties, to improve competitiveness.
