KOCHI:The United Planters’ Association of Southern India (UPASI) is unhappy about the reduction of incentives for export of tea and coffee. Plantation industry is reeling under pressure due to unremunerative prices and skyrocketing cost of production. It is further hit by the reduction made to the incentives for bulk exports of tea and coffee from five per cent that was provided earlier under the Vishesh Krishi Gram Udyog Yojana (VKGY) to three per cent reward rate under the new Merchandise Exports from India Scheme (MEIS), it said.
“While the new Foreign Trade Policy has attempted to simplify the procedures, it has hit the coffee and tea plantations by reducing the incentives for bulk exports by two per cent. Majority of coffee and tea exports are in bulk form and by changing over to value addition or packaged form is not feasible as the demand is for the bulk commodities as it is used for value addition by the importers,” said Vijayan Rajes, UPASI President.
The prices in the US cents per pound of coffee varieties ‘Other Arabicas’ and ‘Robustas’ have dropped from 223.48 and 100.5 in April 2014 to 160.74 and 92.16 respectively in March 2015. The scenario is not different with regard to tea as the south Indian average price of Rs 92.25 per kg during the first quarter of 2014 has fallen to Rs 83.58 per kg during the corresponding period of 2015, UPASI said.
According to Rajes, rubber sector, which was devastated by the lower prices due to unrestricted imports, was hoping for some increase in the import tariff from the current level of 20 per cent to at least 25 per cent in the Budget announcements and there the government had ignored the sector. UPASI would approach the Commerce Ministry to rectify the injustice done to the bulk coffee and tea exporters.