The Special Purpose Tea Fund expected soon

The Special Purpose Tea Fund is expected to be made available to planters here from next month, said M. Das Gupta, the secretary-general of the Indian Tea Association.

“Two days ago, the Tea Board, which has been constituted as a non-banking financial institution, entered into a formal agreement with four banks — Uco Bank, Vijaya Bank, United Bank of India and IDBI Bank — which have exposure to the tea industry,” said Das Gupta.

“The Board will act as the borrower,” he added. “Pending completion of documentation by way of a tripartite agreement with the banks and tea companies, disbursement of the special fund will begin as early as possible.”

Das Gupta was speaking at the 130th annual general meeting of the Terai Branch of Indian Tea Association held in Bengdubi today. Later, he told reporters that “as early as possible” meant February.

The Rs 4500-crore special fund is meant for rejuvenation and re-plantation of tea bushes on 2.12 lakh hectare of land across the country over a 15-year period. The proposal to constitute the fund was first made in 2003.

“Planters will now have to put in applications with a security pledge, which in this case is the lease certificate (all tea plantations are on leased land). If that is already pledged with a bank for an earlier loan, the company will have to obtain a no-objective certificate from the bank,” the secretary-general told the gathering at Terai Club in Bengdubi.

Das Gupta said 2008 could prove crucial for the industry as it comes to terms with the recent rise in tea prices.

“The climb has started, but there is nothing to be euphoric about,” he said. “The average tea price in 2007 was about Rs 2 higher than that of 2006. But this rise does not meaningfully address the problem of rising costs. We hope that the tea produced in the new season will sell well. We have to keep a close watch on the prices.”