Tea diversification with the change in law

Coonoor : India's struggling tea sector is seeking changes in the law to allow for diversification into other crops to fight rising production costs and increase returns, officials said on Monday.

At present laws such as the Plantation labor Act, land reform acts of various states and Minimum Wages Act inhibit diversification and need drastic overhaul, said J.K. Thomas, president of the United Planters' Association of Southern India.

"Even while a plantation commodity is economically inviable, we cannot change over to alternate crop because of the restrictive and archaic laws which have outlived their purpose," he said.

It is high time that necessary legal amendments were brought about for allowing tea estates to diversify into other crops like bamboo, jatropha and palm, Thomas told a planters meet in Coonoor.

Indian tea prices remained almost steady at an average of 65 rupees per kg in the month of July, a gain of one rupee from the same time last year, according to data from the Tea Board.

But prices of other plantations crops such as rubber and coffee have increased 10-20 percent due to higher demand.

"In India the amount of money spent on wages and labor welfare are higher than other emerging countries like Vietnam," Basudeb Banerjee, chairman of the state-run Tea Board of India, told Reuters.

India, the world's largest producer and consumer of tea, has strong regulations to protect workers' rights and employees have powerful unions, which often guarantee them free electricity, water and food as part of their salary packages.

The area under tea plantation is estimated at about 521,500 hectares. About 130,000 growers and 1.26 million workers are associated with the industry.

Source: Reuters India