‘Bad-year’ fund for small tea

Siliguri, May 25: The Union ministry of commerce and industries has created a fund to compensate small growers of tea, coffee, rubber and tobacco for crop loss and low prices.

The Price Stabilisation Fund Trust, formed by the ministry, has also floated accidental insurance cover for the small growers and their workers.

Small growers are those with plantation area of not more than four hectares.

“A corpus of Rs 500 crore has been created by the Centre for this purpose,” Amit Chatterjee, the chief executive officer (CEO) of the Trust posted in Delhi, told The Telegraph here. “Small growers will be paid compensation in bad years, when prices are low.”

The Trust will ascertain good, bad or normal year on the basis of average domestic price of Indian CTC tea vis-à-vis the price it fetches in international markets.

“The average domestic price should be plus or minus 20 per cent of the average international price,” the CEO said. “Lower than 20 per cent will mean a bad year, within the lower and upper limits, normal and more than 20 per cent, good.”

For example, in 2006, the average international price of CTC tea was Rs 64.02 a kg. The average domestic price, on the other hand, was Rs 63.62/kg, which means it was a normal year.

“Growers need to join the scheme by opening a savings account in a bank with a contribution of Rs 500. In a bad year, we will deposit Rs 1,000 as compensation. In a normal year, the grower and we will contribute Rs 500 each and in a good year, the grower alone will deposit Rs 1,000. The amount can be withdrawn only in a bad year,” Chatterjee said.

The Centre also plans to help growers by insuring their crop and will pay them the average price of the total yield of their plantation plus 20 per cent as compensation if they suffer crop loss because of inclement weather, pest attack or for some other reasons.

During his visit here, the CEO briefed small tea growers on the Trust’s accidental insurance scheme.

“A grower or a worker serving in a small tea plantation can claim up to Rs 1 lakh in case of partial or total disablement or death,” Chatterjee said. “A worker who falls sick and remains absent from duty for over three months can get compensation up to Rs 15,000.”

For this, the Trust and the grower/worker will pay Rs 7 each as annual premium.

The Trust plans to bring in 12.77 lakh growers and 51.08 lakh workers under the insurance scheme. Of them, 85,000 growers and 3.40 lakh workers will be from the tea industry.

Growers in north Bengal have welcomed the initiative taken by the Trust in association with the Tea Board of India. “We appreciate the initiative. Although the compensation for low prices is not a huge amount (Rs 1,000), in a bad year all help is welcome,” said Bijoygopal Chakraborty, the vice-president of the United Forum of Small Tea Growers Associations. “The workers can also reap the benefit of the insurance.”