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Annual Report 2006-2007

Commodity Boards and Other Development Authorities

Back

The Indian plantation sector is afflicted with problems of declining productivity, high cost of production and deterioration in quality on account of ageing bush/ plant profile. Recognizing this, replantation and rejuvenation of old plantation tracts has been identified as an important 'Thrust Area' by the Government. Massive replanting programmes would be initiated in the 11th Plan period to replant old and unproductive tracts with high yielding varieties of plantation species to increase the productivity levels to the desired extent.

Tea

India is the largest producer and consumer of black tea in the world. Tea is grown in 16 States in India, of which Assam, West Bengal, Tamil Nadu and Kerala account for about 96 per cent of the total tea production. The teas originating from Darjeeling, Assam and Nilgiris are well known for their distinctive quality world over. While tea exports contribute a significant amount of foreign exchange into the country, tea also contributes revenue to the national exchequer by way of sales tax, agricultural and corporate income tax, etc. More than two million people derive their livelihood from ancillary activities associated with the industry. The tea industry provides direct employment to more than a million workers, of which a sizeable number are women

48
Tea Pluckers

Tea Board

The Tea Board was constituted as a statutory body on 1st April, 1954 under Section (4) of Tea Act 1953. The Board, with its Head Office at Kolkata, is headed by a Chairman. It has 30 Members drawn from different stake holders of the tea Industry and fifteen regional/sub-regional offices. The Board functions as an apex body for the all round development of the tea Industry. With a view to promote the export of Tea, the Board established three offices abroad viz. London, Moscow and Dubai. The primary functions of the Tea Board include rendering financial and technical assistance to tea producers, manufacturers, growers and also help marketing of tea within the country and abroad. Research activities at different Research Institutes viz. Tea Research Association (TRA), United Planters' Association of Southern India-Tea Research

49
Tea Pluckers in Assam Tea Garden

Foundation (UPASI-TRF), are funded for augmentation of Tea Production and Quality improvement. It also regulates and controls different marketing activities including that of Tea Auctions and maintains statistical data on production, consumption and export.

Production

The production of Tea in India during the year 2005-06 was estimated at 930.85 million kg as against 906.84 million kg in 2004-05. During 2006-07 the total production is expected to reach 950 million kg. Tea production during the current year 2006-07 (April-November) has been estimated at 811.12 million kg as against 784.15

49

million kg of the corresponding period of 2005-06.

Exports

The provisional export of tea from India during 2005-06 was 196.67 million kg valued at 1793.58 crore with a unit price of Rs. 91.20 per kg as against 205.81 million kg valued at 1924.71 crore with a unit price of Rs. 93.52 per kg in 2004-05. During the current financial year, export of tea is expected to touch 200 million kgs valued at Rs.1760 crore (approximate). The exports of Tea during April to November 2006 are estimated at 134.31 million kg valued at Rs. 1239.92 crore as against 120.92 million kg valued at Rs. 1143.09 crore during the corresponding period of last year.

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Imports

The import of tea into India during the financial year 2005-06 was 16.40 million kg valued at

Rs. 99.26 crore with a unit price of Rs. 60.53/kg as against 32.53 million kg valued at Rs. 145.15 crore with a unit price of Rs. 44.61/kg in 2004-05. The import of tea into India during the first nine months of the current financial year 2006-07 (April-November) reached to the level of 16.57 million kgs valued at Rs. 83.87 crores as against 10.62 million kg valued at Rs. 68.86 crore duringthe corresponding period of 2005-06. As per the available trends, imports during 2006-07 are expected to be around 20 million kg as against 16.40 million kg of 2005-06.

At present, basic import duty on tea falling under heading 0902 is 100 per cent and on instant tea falling under heading 210120 is 30 per cent. However, duty free import of tea is allowed under the duty exemption scheme and/or by EOU/SEZ units subject to the condition of its re-export and value addition. Under the Indo Sri Lanka Free Trade Agreement, tea from Sri Lanka upto 15 million kg annually is allowed to be imported into India at a concessional rate of import duty of 7.5 per cent. Against such annual quota only 0.11 million kg valued at Rs. 1.90 crore with a unit price of Rs.180.07/kg was imported during January-December 2005 against 0.16 million kg valued at Rs.1.86 crore with a unit price of Rs.113.17/kg imported during the corresponding period of 2004. During January-November 2006 import of tea from Sri Lanka under Indo Sri Lanka Free Trade Agreement was only 0.060million kg against 0.094 million kg during the corresponding period of 2005.

Prices

The average prices of tea sold at Indian auctions recovered from a downward trend and have been ruling at a higher level right from the month of January 2006 to November 2006 as compared to the corresponding period of 2005. The details are given below:

Activities of the Tea Board

Licensing Branch

The Licensing Branch of the Tea Board is responsible for implementation of various statutory and regulatory orders issued by the Government. It also provides necessary clarifications and guidance to the tea industry and trade in relation to fiscal policies and different legislations concerning tea. With a view to ensure quality of tea for exports, the Government has issued a new Tea (Distribution and Export)

Prices of All Tea at North, South & All Indian Auctions (Rs. Kg)

Months

Prices at North
Indian Auction

Prices at South
Indian Auction

Prices at
All Indian Auction

2006

2005

2006

2005

2006

2005

January

61.85

57.12

46.28

48.95

58.72

55.20

February

59.32

57.22

52.79

49.82

56.91

55.04

March

55.23

55.57

49.81

50.47

51.68

52.65

April

80.59

74.60

48.34

48.26

65.12

61.52

May

77.53

66.14

48.73

43.14

64.70

58.78

June

82.56

72.78

49.24

37.77

70.98

60.73

July

77.91

70.46

51.02

35.81

70.31

59.99

August

74.67

64.66

53.40

38.30

69.95

58.74

September

74.72

59.10

54.90

37.99

70.36

54.67

October

75.35

61.61

55.10

41.44

71.09

56.60

November

67.89

63.16

48.45

41.72

63.71

59.13

Upto November

72.27

63.45

50.76

42.59

66.09

57.63

Prices of Total Tea at Different Indian Auctions during January to November 
(Rs. Kg)

Auction Centres

Average Price

Increase (+) or decrease 
(-) in Price during 2006 over 2005

2006

2005

Kolkata

79.51

69.95

9.56

Guwahati

68.55

60.49

8.06

Siliguri

65.42

57.97

7.45

Jalpaiguri

63.45

52.59

10.86

Total North India

72.27

63.45

8.82

Cochin

54.38

49.37

5.01

Coonoor

48.01

35.81

12.20

Coimbatore

49.21

40.82

8.39

Tea Serve

46.45

35.45

11.00

Total South India

50.76

42.59

8.17

Total All India

66.09

57.63

8.46

Control Order, 2005 on 1st April 2005. Further, Government has also issued Tea (Marketing) Control Order, 2003 and Tea Waste (Control) Order, 1959. Some of the important activities undertaken by the Tea Board under the provisions of such orders include ensuring quality of green tea leaf used in the manufacture of made tea, monitoring disposal and usage of the un-denatured tea waste, issuing non-preferential certificate of origin for tea exports, issuing business licences for tea exporters and distributors, ensuring implementation of the price sharing formula between the tea manufacturers and green tea leaf suppliers etc.

Welfare Branch

During the year, the Tea Board had taken a number of labour welfare measures for the benefit of tea plantation workers and their dependents. These include grant of educational stipend to the wards of tea plantation workers for pursuing studies from the primary stage, extension of capital grant/financial assistance to various institutions and organizations towards construction/expansion of school and college buildings etc. The Labour Welfare Scheme of the Board has been revised w.e.f. 01-4-2006 to increase the scope for labour welfare in tea garden areas which include the following new Schemes:

  • Scheme of capital grants for school colleges for purchase of furniture and other equipments;
  • Scheme of capital grants to the institutions who are running rehabilitation and therapy centre for the physically challenged persons;
  • Scheme of educational stipend for wards of small tea growers;
  • Scheme of capital grants for setting up sports facilities in tea plantation districts.

Tea Promotion

  • Indian tea in the domestic and the international markets requires new initiatives from the Tea Board as well as the tea industry for meeting emerging challenges. Keeping in view the requirements of the export and the domestic markets, there was a focus on quality control. Implementation of ISO 3720 Standards and HACCP (Hazard Analysis & Critical Control Points) has therefore acquired growing importance. Efforts continued to be made to persuade producers to increase production of exportable quality teas & good teas of orthodox variety.
     
  • Tea Board carried out promotional activities mainly through its overseas offices located at London, Moscow and Dubai. The tea promotion abroad is carried out through various Tea Councils (India is an active member of the Tea Councils of USA, Canada, UK and Germany). Indian tea promotional activities are also carried out by the Board's foreign offices to enhance demand for Indian tea and increase market share. The market development activities of the Board include market surveys, market analysis and tracking of consumer behaviour, registering of Board's Logos in various markets as well as popularizing the usage of these logos in order to enhance the equity of Indian Tea and its various sub-brands etc. The markets in Russia, CIS, UK, UAE etc., continued to be of vital importance with the lifting of COMESA. Prospects of tea exports to Egypt have also opened up.
     
  • The Board has organized a number of promotional activities in the country propagating the health benefits of tea aimed at the youth and young housewives, propagating the health benefits of tea. A major generic tea promotion campaign launched in the year 2005-06 continued during 2006-07 using both the print and electronic media. Implementation of some of the recommendations of the Medium-Term Export Strategy continued during the year 2006-07.
     
  • Efforts are being made to maintain and improve trade relations between exporters and importers by direct contact and discussions. During the year 2006-07, the Tea Board received and organized the visit of a number of important tea delegations. Deputations / delegations from India during 2006-07 were also organized. An Indian tea delegation attended the IGG Meet on tea held in Kenya. Chairman Tea Board also led Trade Delegations with a view to enhancing exports of teas from India. Tea Board has also participated in a large number of International Fairs / Exhibitions in traditional markets and made a foray into non-traditional markets as well, with a view to diversifying the market portfolio. The Tea Board explored potentials in Chile, a new market.

Intellectual Property Rights in Tea

Efforts continued to protect India's Intellectual Property rights in tea. Tea Board has formulated a comprehensive strategy for protection and enforcement of Intellectual Property Rights in the Geographical Indication "Darjeeling tea" which is operated at three levels - one relating to legal framework, commercial promotion and consolidation of brand equity.

The Tea Board has been successful in securing statutory recognition of Darjeeling tea in the manner aforesaid in various important jurisdictions such as UK, USA, Japan, and Australia, as certification or collective marks. In India, it has been registered under the Trade Marks Act, 1999 and Geographical Indications of Goods (Registration and Protection) Act, 1999. Further, the DARJEELING logo has been formally registered as an artistic copyright with the Indian Copyright Office and is entitled to protection as such under international law in all member countries of the Berne and the Universal Copyright Conventions. Darjeeling is now registered as a community collective mark in the EU and in various other jurisdictions.

Other steps taken by the Tea Board include:

  • The use of Darjeeling tea in multi-origin mixtures made subject to correct labelling requirements to protect the customer against any deception or confusion;
     
  • The use of the expression "blended Darjeeling tea" or its variants restricted to a blend of Darjeeling teas only drawn from more than one tea garden within the definition of Darjeeling tea;
     
  • Labelling guidelines formulated and issued to govern and regulate use of Darjeeling word and logo marks as part of trademarks and thus prevent any misuse thereof for teas other than Darjeeling tea;
     
  • Detailed inspection procedures put in place to ensure the integrity and purity of the supply chain for grant of the Certificate of Origin by the Tea Board;
     
  • Customs Notification dated June 25, 2001 issued making all exports of Darjeeling Tea subject to mandatory proof of such Certificate of Origin.

Box 5.1: Protection of Darjeeling Tea

At a legal level, Tea Board is the owner of all intellectual property rights in the DARJEELING word and logo both in common law and under the provisions of the following statutes in India:

  • The Trade Marks Act 1999: DARJEELING word and logo are registered certification marks of Tea Board;
     
  • The Geographical Indications of Goods (Registration and Protection) Act, 1999: DARJEELING word and logo were the first geographical indications to be registered in India in the name of the Tea Board:
     
  • The Copyright Act, 1957: The DARJEELING logo is copyright protected and registered as an artistic work with the Copyright Office.

Major achievements in 2005 - 06 include:

  • Registration of the Darjeeling logo in Australia as a Certification Mark and Russia as a Trademark.
     
  • 2005 also saw the registration of both the Darjeeling logo and word as Collective Marks in Lebanon where Tea Board is fighting a case of infringement. The single most significant registration for Darjeeling word was as a community collective mark in the European Union.
     
  • Use of the Darjeeling word and logo are protected as Geographical Indications in India and as Certification Trade Marks in UK, USA and India.
     
  • The DARJEELING logo is registered in Belgium, Netherlands, Luxembourg, Germany, Austria, Spain, France, Portugal, Italy, Switzerland, former Yugoslavia, and Egypt as a collective mark, in Canada as an official mark, as a trademark in Japan. The DARJEELING word is also registered as a trademark in Russia. Tea Board has also registered the Darjeeling word a collective mark in Japan.

Achievements 2006 2007: Republic of Tea - United States of America (2000 2006)

October 2006 - Tea Board was successful in the United States of America (2000 2006) in seeking rejection of a trademark application for DARJEELING NOUVEAU in the name of Republic of Tea ("ROT") on the basis of its geographical certification marks for DARJEELING word and logo. The opposition had been filed by the Tea Board before the Trademark Trial and Appeal Board (TTAB) which has not only upheld Tea Board's opposition but also denied ROT's counterclaim for cancellation of the DARJEELING certification mark on grounds of genericness.

Dusong, France (2003 2006)

November 2006 - In a landmark victory for the Tea Board India, the Court of Appeals in Paris upheld its claim that the use by one Mr. Jean-Luc Dusong of the name "DARJEELING", with the device of a teapot, in respect of goods other than Darjeeling tea was misleading and deceiving consumers, and was, therefore, a violation of the rights represented by the Tea Board in respect of the geographical indication "DARJEELING" for tea.

The Tea Board is also examining the issue of registration of Assam and Nilgiri teas as Geographical Indications. The India Tea logo, which is now used to certify origin and minimum quality adherence levels, has also applied for as a Certification Trade Mark under the Indian Trade Marks Act.

Tea Development

The developmental activities that are being pursued by the Tea Board are aimed at increasing the tea production both vertically and horizontally, improving the productivity of existing tea areas both in the corporate and small grower sectors, creation of modern tea processing facilities for qualitative improvement of made tea and market promotion in both domestic and international markets. The main focus during the X Plan period is on supply factors such as improving quality, cost control, productivity increase through consolidation of the existing area rather than expansion of the area. The following five schemes have been approved for implementation during the 10th plan period, with an outlay of Rs. 350 crore. As against this, the expenditure is anticipated to be Rs. 364 crore against the approved outlay of Rs. 225.96 crore.

  • Plantation Development Scheme;
  • Quality Upgradation and Product Diversification Scheme;
  • Market Promotion Scheme;
  • Human Resource Development Scheme;
  • Research and Development Scheme;
  • Incentive scheme for orthodox tea production: with an outlay of Rs. 65 crore.
  • Additional support for R&D institutions (TRA & UPASI TRF) with an outlay of Rs. 28 crore.

Evaluation of the Existing Schemes

During the year, an evaluation study was conducted by engaging an external agency with an objective of assessing the usefulness of the Schemes during the 10th Plan period and also for continuing them during the XI Plan period. It has been found that the Schemes have served the purpose for which they have been conceived and their positive impact justifies their continuation during the XI Plan period. Some of the highlights of the evaluation Report on the impact of the schemes are as under:

Sample Impact Analysis for Replantation & Replacement

Region Pre Uprooting Average Yield (Kg/ha) Post Replanting Average Yield (Kg/ha) Increase in yield due to replanting (%)
Dooars

1490

2599

74.40

Terai

1356

2342

72.66

North Bank (Tezpur)

1579

2252

42.58

Upper Assam (Jorhat)

1146

1956

70.70

As seen from the above Table, the uprooting and replanting which has been supported under the Plantation Development Scheme of Tea Board has actually resulted in significant improvement in overall yield. This demonstrates that the gardens that have availed of the subsidy and invested in the field development activities have, by and large, benefited significantly in terms of yield and productivity.

Box 5.2 : Special Purpose Tea Fund (SPTF)

The problem of declining productivity and increasing cost of production mainly due to old age of tea bushes came up for discussion at the Stake holders Conference on Tea held under the Chairmanship of Hon'ble Minister for Commerce & Industry in New Delhi in September 2004. Among the recommendations that emerged, it was proposed to set up a Special Purpose Tea fund (SPTF) for the long term development of the Indian Tea Industry through Replantation and Rejuvenation pruning aimed at improving the age profile of the plantation. Support to this programme was committed in the Finance Minister's Budget speech while presenting the Union Budgets for 2005-06 and 2006-07. The Government. has since sanctioned the Scheme of SPTF on 17.1.2007 and the scheme is under implementation.

Box 5.3 : Salient Features of the Special Purpose Tea Fund (SPTF) Scheme

  • The estimated area to be taken up for replantation/rejuvenation during the period would be 85,044 hectares comprising replantation in 68,154 hectares @ 11,359 hectares per annum and rejuvenation in 16,890 hectares @2815 hectares per annum.
     
  • The SPTF would provide loan-cum-subsidy to planters. It would raise the required long term funds from the banking sector through a structured borrowing mechanism.
     
  • The programme is targeted at the organized sector comprising about 1600 tea estates spread over 4 lakh hectares.
     
  • The scale of replantation and rejuvenation is proposed to be increased significantly by 6 and 4.5 times, respectively of the prevailing levels. This is to be achieved by ensuring availability of funds - long term loans and subsidy.
     
  • The funding pattern would be 25 per cent borrower's contribution, 50 per cent loan from SPTF and 25 per cent subsidy from the Government. Long term funds will be arranged from the banking sector through a structured borrowing mechanism.
     
  • Subsidy to growers will be paid in three installments of 10 per cent, 10 per cent and 5 per cent during the second, third and fourth year respectively.
     
  • It has been decided to implement the scheme in the remaining period of 2006-07 and XIth Plan period. The scheme will be reviewed after the end of XIth plan period. The continuation of the scheme will be decided after the review. In the first phase of its implementation, the funding will be as given below:
Borrower's Contribution (25%) - Rs. 476.10 crore
Loan from SPTF (50%) - Rs. 952.20 crore
Subsidy from Government (25%) - Rs. 476.10 crore
Total - Rs.1904.40 crore

The main impact of Quality Upgradation and Product Diversification Scheme has been that it has encouraged tea factories to invest in replacing old/worn out machinery and undertaking plant modernization/new technology introduction, something that has been long overdue in the Indian tea sector but which the tea industry has been shy of doing given the overall dullness in the sector.

Tea Research

Promoting and conducting of tea research activities by Tea Board is done as per provisions in the Tea Act. The Darjeeling Tea Research & Development Centre, Kurseong under the Tea Board is engaged in R&D activities to support the tea estates in the hilly region of West Bengal. Efforts are also being made by the Tea Board for development of Tea Research Centre at Kurseong as Centre of Excellence. Major financial supports are also given to the grantee institutions like Tea Research Association (TRA) and United Planters' Association of Southern India -Tea Research Foundation (UPASI-TRF) which are conducting basic and applied researches on tea cultivation, plant protection, quality, manufacture, value added items and in allied fields. The TRA is having its laboratory infrastructure at Jorhat with seven advisory centers in the entire North East for transfer of technology to the tea estates. Similarly, UPASI-TRF has its head quarter at Valparai with seven advisory centers in South India. Both the institutions are granted financial support to the extent of 80 per cent of the total expenditure of the respective research institutes as grant-in-aid (49 per cent) along with additional support from the additional excise duty (AED) fund (31 per cent). This financial support helped both the institutes to meet their recurring expenditure. Special research schemes were also granted by Tea Board to Himachal Pradesh and Uttaranchal for R&D works to support the tea industry in these States.

Grant-in-Aid

With the increased financial support from the Tea Board since the last two years up to 80% of their recurring expenditure, the TRA and UPASI-TRF are now engaged in generating more scientific/technical information on tea cultivation, protection and manufacturing of tea; and also in intensive transfer of technology to the gardens by way of increasing number of visits, organizing training programs, seminars and conferences at the local areas. Fundamental research activities included application of biotechnology in tea for development of basic information to identify genetic markers to develop future clonal materials, identification of biochemical parameters relating to quality and tea manufacture. Research areas also covered in product innovation in tea like development of technologies for chemical extraction, tea colas, and tea tablets. Applied research activities at the laboratory and field level in both the institutes have been strengthened. Different packages have been developed, besides breeding of new clonal materials. Ongoing research at the field level included tea cultivation, cultural operations, updating of nutritional dose, bio-control and development of biocides like Neem products and microbial formulations. Plant protection measures have been changed in the recent years updating to Integrated Pest Management (IPM) system to reduce the pesticide residue contents in tea. From the findings of recent experiments on application of pesticides and residue contents, the IPM system has been further strengthened. The budgetary support to TRA on account of grant-in-aid and from AED Fund was given to the extent of Rs.901.62 lakhs during 2005-06. Similarly, UPASI was also granted Rs.198.50 lakhs as grant-in-aid and from AED Fund during 2005-06. The financial support from AED to TRA and UPASI-TRF was granted for five years effecting 2004-05, to be concluded in 2008-09. The increased financial support for the ongoing research activities in the traditional tea research institutes helped to strengthen their in-house research programmes to a great extent during the last two years. Tea Board also granted recurring expenditure upto Rs.2.00 lakh to Assam Agriculture University for the tea technology course at the graduate level.

Plan Schemes

Research Schemes under 10th Plan has helped the traditional tea research institutes like TRA and UPASI-TRF for developing infrastructure. At present, eleven research schemes are implemented at both the institutes for which both capital and recurring expenditure are granted out of Board's Plan budget. The outlay for these projects is Rs. 992.19 lakh for the 10th Plan period, out of which Rs. 903.97 lakh has been released by Tea Board up to December 2006 to the host institutes. The Scheme implemented by the institutes helped in building network infrastructure through V-SATs in the North East and South India for creating data bank on garden information to help in transfer of technology. The direct linkage between the headquarter and advisory centers of TRA and UPASI-TRI has helped in speedy disposal of technical information up to the grassroot level. The Plan support helped in establishment of a chain of quality testing laboratories by TRA and UPASI-TRF. The garden samples are now tested for quality at the field level and the reports are made available easily. The upgradation of quality in tea received a boost out of this network programme. During the 10th Plan period, a special programme has been launched on product diversification in tea. Other programmes undertaken during the 10th Plan include studies on the general soil health aspects of North Bengal tea gardens which are opting for large scale replantation under the special package. Remote sensing technology has also been applied in data generation on underground water reserves and to find out effective drainage system in the problematic areas where overflowing of water is a major problem. The State of Uttaranchal is receiving financial support for establishment of a small tea experimental firm at Kausani tea areas through the G.B. Pant Institute of Agriculture and Technology Pantnagar.

Under 10th Plan Scheme, studies on biotechnology and bio control for blister blight in South India has also been progressed. A survey on the factory conditions and quality manufacture of tea in South India revealed the situations of tea manufacture and the need of upgradation of factory conditions to a great extent. Tea Board also released some fund in transfer of technology through different organizations like TRA for which Rs. 5.0 lakh has been released in 2006-07.

Tea Board is also giving full financial support to Darjeeling Tea Research & Development Centre (DTR & DC), Kurseong which is engaged in research activities on plant physiology, soil and agronomy, biochemistry and extension services. Tea Board made an expenditure of Rs. 5.86 lakh during 2005-06 for all these activities in the centre. In the current year similar financial supports are also granted.

Technological Support

Tea Board is playing an important role to give essential technical support to the tea industry by way of circulation of technical standards from different tea importing nations as well as from the Government of India. The tea standards are generally developed and modified by the Bureau of Indian Standard (BIS) in consultation with Tea Board and tea research scientists. The Ministry of Health is notifying quality standards under the provisions of Prevention of Food Adulteration Act, 1955. The quality standards are regularly updated at various stages for which Tea Board is giving technical data along with the views of the tea industry. The industry is regularly monitoring updating of such standards for production and marketing of tea.

New Rules on Food Hygiene in EU, US, Canada, Australia

There are important developments during the last two years in the area of food hygiene globally. The new rules in the EU are not harmonized with the phyto sanitary aspects agreements under SPS and TBT. Various articles in the new rules are stringent regarding maintenance of various hygienic code of practices.

Pesticide Residue Standards

Joint programmes financed by the National Tea Research Foundation and Tea Research Institutes in conducting trials during the last five years helped to generate data at the field level for many of the new compounds applied in tea. Such data were compiled for computing Maximum Residue Levels (MRLs). Proposals were submitted to Codex for fixation of MRLs in the last few years for several compounds. India's data on residue levels in tea has helped to formulate MRLs at the Codex and also to suggest steps to be taken at the PFA level for fixing national MRLs in tea.

Efforts through Data Generation Process on Residue by the Inter Governmental Group on Tea (IGG)

The Working Group on Pesticide Residue, coordinated by Tea Board India and trials conducted by different tea producing countries has helped to propose MRLs to the IGG and to Codex. This is a remarkable achievement. The IGG is progressing in data generation at different countries as coordinated by India.

Human Resource Development

The Human Resource Development Cell of the Tea Board carries out different types of training of Tea Board officials by sponsoring their names to different training institutes. Further, senior officials are sent to workshops, seminars for updating their knowledge and skill. During 2006-07, the Board was engaged with the State Productivity Council, a Consultant in the HRD Field at a cost of Rs. 1.60 lakh for assessing the training needs of the Tea Board Employees under Group 'B' & 'C' categories in order to design suitable training modules for the staff.

Box 5.4 : Study tour to Kenya by Small Tea Growers

In Kenya, small growers and the processing factories are integrated under one umbrella organization - Kenya Tea Development Agency Ltd (KTDA Ltd.). The Government accorded approval for a proposal of Tea Board for mounting a delegation of small growers and tea manufacturers to visit Kenya on a study tour during October, 2006. The objective was to provide an exposure to the efficient functioning of tea factories under the management control of Kenyan Tea Development Agency which has been instrumental in organizing small growers and providing them with holistic services in the sphere of field management, procurement of green leaf from the growers, manufacturing and marketing of tea.

Coffee

Indian Coffee has created a niche for itself in the international market, particularly Indian Robusta and Arabica varieties which are highly preferred for their good blending quality. India is perhaps the only coffee producing origin whose coffees are fully shade grown, entirely hand picked and completely sun dried.

In India, coffee plantation occupy an area of around 3.5 lakh hectares providing rural employment pre-dominantly in Karnataka, Kerala and Tamil Nadu, which contribute about 99 per cent of the total Coffee production. There are 1,78,308 coffee holdings, out of which 1,75,475 fall within the small growers' category and balance 2,833 holdings fall under large holdings (above 10 hectares category). The small growers account for about 71.8 per cent of the total area.

49
Coffee Blossoms

Coffee Board

The Coffee Board is a statutory organization constituted under the Coffee Act, 1942. The Board, with its Head Office at Bangalore, is headed by a Chairman. It has 33 members, with offices located at Coffee growing areas viz Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, Orissa and North Eastern Region besides Delhi, Guwahati, Mysore, and Chennai. The Board also has a Central Coffee Research Institute at Chikmagalur and Sub/Regional Research Stations at Chettalli, Chundale, Thandigudi, R. V. Nagar, Diphu and Division of Tissue Culture at Mysore. The functions of the Board are primarily directed towards research, extension and development of coffee, domestic and external promotion of coffee, gathering of market intelligence and human resources development.

49
Coffee Cherry fully ripen

Production

India accounts for only about 4.5 per cent of the global production of coffee. The estimated production of Coffee in India during 2006-07 is 3,00,300 tonnes comprising of 104,300 tonnes of Arabica and 1,96,000 tonnes of Robusta (38 per cent and 62 per cent respectively).

49

Domestic Consumption

The domestic consumption of Coffee has been hovering around the figure of 70-80 thousand metric tonnes per annum since the last decade. The Board has initiated several steps/programmes for increasing the domestic consumption of coffee which includes organization of coffee festivals/exhibitions, imparting training for coffee brewing to the hotel sector, publicity through material and public relation campaigns, conducting market survey in urban areas, participation in all major internal trade fairs and strengthening the performance of coffee houses operated by the Board.

Export and Import of Coffee

About 75 per cent of the total coffee produced in the country is exported to over 60 countries of the world. As such, the import of coffee has been insignificant. In order to discourage import of coffee of other origin, the import duty on coffee has already been increased from 70 per cent to 100 per cent. The top six export markets are the Russian Federation, Italy, Germany, Belgium, Spain and the USA. Export cess of Rs. 500/MT was abolished by the Government in an effort to make Indian coffees more competitive. The Coffee Board has stepped up its efforts to keep the Indian brand afloat by holding "Fine Cup Awards Flavour of India" in different global coffee markets. So far, competitions have been held Bangalore (2002), Boston (2003), Trieste, Italy (2004), Seattle, USA (2005) and in Bern, Switzerland during May, 2006. During 2005-06, a total quantity of 2,01,517 tonnes of coffee (including re-exports) was exported from India valued at Rs.1509.71 crore. So far (as on 30.11.2006) a total quantity of 1,68,396 tonnes has been exported during the year 2006-07 earning a foreign exchange of Rs. 1308.12 crore.

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* up to 30.11.2006

Prices

Coffee prices in India are largely influenced by the New York Exchange for Arabicas and London Exchange for Robustas. The international and domestic prices have improved during 2006-07 and the Indian Coffee Trade Association (ICTA) price during the month of January, 2007 was Rs. 137.65/kg for Arabica and Rs. 80.65/kg for Robusta.

49

Box 5.5 : Coffee Export Awards

The institution of export awards for the best performing coffee exporters was started by the Coffee Board since 1999-2000 to motivate and encourage Indian coffee exporters to augment their export performance specifically to key destinations and also in the value added segment like speciality and soluble coffees.

Box 5.6 : Flavour of India-Fine Cup Awards

The Coffee Board took up the initiative of holding the Flavour of India-Fine Cup competition on an annual basis from 2002 onwards. It is aimed at developing the culture of preparing good quality coffees through good agriculture practices & on-farm processing techniques .It is also aimed at sensitizing coffee growers about the importance of cup quality and confers recognition of the best coffees grown in different regions and also under different categories. Further, to give greater visibility to prize winning coffees and also project India as a producer of good quality, high value coffees, the finals of the competition are held in strategic countries/markets coinciding with an international coffee event from 2003 onwards and this initiative has caught the imagination of the international coffee fraternity. The finals of the Flavour of India 2005 competition was held in Seattle, USA in April 2005, in which 42 coffees entered the final round, and was adjudged by an International Jury. this year also, the Board has organized the "flavour of india 2006 competition" coinciding with the board's participation in the "world of coffee' 06" held in berne, switzerland during may, 2006.

Marketing system

Consequent upon the implementation of 100 per cent Free Sale Quota announced by the Govt. of India during the year 1995, the Coffee Board is no longer involved in pooling and marketing of coffee. However, the Marketing Intelligence Unit of the Board continues to collect and compile daily market information and disseminates information/data on prices, supply, demand and other factors that are important for market analysis. The Unit published a Data Base on a bi-monthly basis, coordinates the implementation of Price Stabilization Fund of the Govt. of India, the schemes on Promotion of Indian Coffee Exports to Russia and CIS Countries, and also advises the Board on World Trade Organisation (WTO)/Trade related issues.

Activities of the Coffee Board
Development Programmes

To improve the productivity and quality and to achieve competitiveness in the global markets, the Coffee Board is implementing the following plan schemes during the 10th Plan period with a total budget of Rs. 300 crore:

l Production, Productivity and Quality

  • Infrastructure Development, Capacity Building and Transfer of Technology
  • Market Development
  • Subsidy for Coffee Exporters
  • Support to Small Grower Sector
  • Interest Subsidy Scheme to Small Growers
  • Interest Subsidy Scheme to Large Growers

A total amount of Rs. 55 crore has been earmarked as RE for the year 2006-07.

Labour Welfare

Labour welfare measures have been implemented by the Board for the benefit of labourers working in coffee plantations and coffee curing works spread over the entire coffee growing areas every year. During the year 2005-06, a budget of Rs. 50 lakh has been allocated to operate various welfare schemes for granting educational stipends, meritorious awards, financial aid, furniture, library books, and laboratory equipments to the educational institutions.

Coffee Research

During the year, the Board continued its research activities at the Central Coffee Research Institute, Chikmagalur; Sub/Regional Stations in Chettalli, Chundale, Thandigudi, R. V. Nagar, Diphu and Mysore and also at the Head Office, Hassan and Chikmagalur with a view to improve the production, productivity and quality of coffee. Key research areas have been identified under different scientific disciplines for the 10th Plan. The major disciplines under the scheme are - Plant Improvement (Botany, Tissue Culture and Biotechnology), Crop Management (Ag. Chemistry / Soil Science, Agronomy, Plant Physiology) and Crop Protection (Entomology & Plant Pathology). In addition to these, Post- Harvest Technology and Quality Evaluation

Up-gradation Divisions are conducting studies on the quality improvement aspects of coffee.

External Publicity

The Board had undertaken various external promotion activities to enhance the export of coffee. These include (i) participation in selected international exhibitions and similar events in which the exportable grades of Indian coffee are displayed and promotional literature on Indian coffee is distributed, (ii) Buyer-Seller Meets, (iii) advertisements on the excellence and selectivity of Indian coffee in prominent overseas trade journals and magazines, and (iv) films on the unique aspects of Indian coffee. During the period under review, the Board deputed its officers in the International Fairs / Exhibitions held in the USA, China, Germany, Russia and Brazil.

Internal Publicity

Internal publicity is aimed at increasing domestic consumption of coffee. During the year, the Coffee Board participated in important exhibitions held in Coimbatore, Coonoor, Bangalore, Chennai, New Delhi and Mumbai. Special blends of pure coffee powder were sold to the public at reasonable and fixed prices, specially designed stainless steel domestic size coffee filters for preparation of filter coffee were made available to the public at reasonable prices, and India Coffee Houses served pure coffee to lakhs of coffee connoisseurs.

Box 5.7 : 2nd India International Coffee Festival

To promote Indian Coffee and to make it more competitive in the international market, 2nd India International Coffee Festival is being organized in Bangalore from 23-25th February, 2007A mascot for Indian Coffee, namely, "Coffee Swami" was launched on 14th September, 2006, by Hon'ble Union Minister of State at a function in Bangalore.

Publications and Journals

  • The journal of the Board viz. "Indian Coffee" was released during the year as a monthly in Kannada and English and as a quarterly in Malayalam and Tamil. A Hindi version is also attached to the English version.
  • Annual Coffee Year Book-cum-Diary 2006 containing information on the coffee industry is printed and published.

Steps taken for the Benefit of Coffee Growers

Besides operating several plan schemes and developmental activities aimed at intensive cultivation, replanting, quality improvement and water augmentation, the Government has also been providing necessary support in the form of research and extension, arranging of credit and finance and other necessary backup support like supply of seed for planting purposes, etc. Further, thrust is being given for increasing productivity of coffee particularly in the small grower sector and improving quality of the product to achieve competitiveness in international markets. The Board is also encouraging the large growers to produce specialty coffees which fetch attractive premiums in developed countries like the USA and the European Union. The Government of India has abolished the Cess on Coffee produced in India and exported from India w.e.f. 16.03.2005.

In May 2005, the government approved a package of relief measures which primarily aimed at debt amelioration to bail out the coffee industry from the crisis.

Natural Rubber

Rubber is grown in the States of Kerala, Tamil Nadu, Tripura, Assam, Megahalaya, Nagaland, Mizoram, Manipur, Goa, Andaman & Nicobar Islands and Coastal Karnataka. Rubber plantations are spread over 5.97 lakh hectares in the country. The production sector of the country is dominated

Box 5.8 : Relief Measures under the "Coffee Relief Package"

  • Sharing the total interest burden on Special Coffee Term Loan (SCTL) estimated to be Rs. 287.10 crore for the 3 year moratorium period equally amongst the banks, government and the loanee growers to the extent of 1/3rd each;
     
  • Requesting the Banks to lower the interest rates charged on SCTL from the existing 11 per cent to 9 per cent or the rate applicable to agriculture sector whichever is lower during the remaining repayment period of SCTL loans;
     
  • Writing off of coffee developmental loans along with interest amounting to around Rs. 24 crore, due from the Coffee Board to the Government of India and waiving by the Coffee Board of the old developmental loans amounting to around Rs. 64.59 crore extended by the Board to the small coffee growers (having holdings below 10 hectares);
     
  • Continuing the Interest Subsidy Scheme for small growers (below 10 hectares) at the rate of 5 per cent and large growers at the rate of 3 per cent for the remaining period of the X Plan which would be reduced by one percent in the case of those growers who received the benefits of the reduced interest burden on SCTL during the moratorium period;
     
  • Further, on the demands of the coffee growers, the deadline for availing the benefits of the first component was extended from 30th June, 2005 to 31st May, 2006.

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Rubber Plantation

by small holdings, which accounts for 92 per cent of the production and 89 per cent of area with an average holding size of 0.5 hectare. There are more than 1 million growers and about 0.7 million people engaged in the plantation sector as workforce either directly or indirectly.

Rubber Board

The Rubber Board is a statutory body constituted under the Rubber Act, 1947 with a view to promote the rubber industry in the country. The Board, with its Head Office is located at Kottayam, comprises of 26 members including the Chairman, who is the Chief Executive. The functions of the Board broadly are undertaking, assisting or encouraging scientific technological and economic research, imparting training to students/growers on improved methods of cultivation, manuring and spraying, rendering technical advice to the rubber growers, improving marketing, collecting statistics from owners of estates, dealers and manufacturers, securing better working conditions, providing/improving amenities and incentives for workers.

Production, Productivity & Consumption of Natural Rubber (NR)

During 2006-07, the production of natural rubber was projected at 831,000 tonnes at 3.5 per cent growth while consumption was projected at 841,000 tonnes at 5 per cent growth. Upto November 2006, the provisionally estimated production was 560,680, tonnes registering a growth of 8.7 per cent and the actual consumption was 542,980 tonnes registering a growth of 2.5 per cent. India has become the fourth largest rubber producer in the world next to Thailand, Indonesia and Malaysia with an average productivity of around 1796 kg/ha, the second highest amongst the major natural rubber producing countries in the world. The country is also the fourth largest consumer of natural rubber. The domestic consumption was 7.55 lakh tones during 2004-05 and 8.01 lakh tones during 2005-06.

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Replantation of Rubber has been identified as one of the thrust areas by the Government for revival of plantation crops economy. Kerala accounts for about 82 per cent of the total area under rubber plantation in the country.

49

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Import and Export

During 2005-06, the total export was 73,830 tonnes (foreign exchange earnings realized was US$ 103.80 million) of which 47.7 per cent was RSS grades, 18.1 per cent was in the form of TSR, 32.7 per cent in the form of centrifuged latex and 1.5 per cent other grades while the total import was 45,285 tonnes. During the period from 1st April to 30th November of 2006, the import of natural rubber was 29,772 tonnes against the projected figure of 45,000 tonnes for the year 200607 while the actual export was 49,891 tonnes against the export projection of 50,000 tonnes for the year 200607

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Prices of Natural Rubber

The prices of natural rubber have increased significantly. Prices, which were ruling around Rs. 67 per kg. during 2005-06 have touched

Rs. 115 per kg. in the last week of May, 2006, the highest prices ever quoted in the domestic market. The price during the corresponding period of the previous year was Rs. 63.50 per Kg. It is now hovering around Rs. 99.50 per Kg. (as on 8.2.2007). Though the domestic rubber prices have been comparatively high now, the International rubber price also increased and was well above the domestic price during the year.

49

Collection of Cess

The Board is empowered to assess and collect duty of excise (Cess) on all rubber produced in the country. The collection of Cess during 2005-06 was Rs. 9625.75 lakh against the target of Rs. 9300 lakh. The target for 2006-07 is Rs. 9700 lakh against which Rs. 9535.56 lakh have been collected so far i.e. up to 30/11/2006.

Marketing system

Marketing link to more than one million growers and 4800 rubber goods manufacturers is provided through 9686 licensed dealers and 133 processors operating in the country. The marketing network of primary Co-operative Marketing Societies and the Trading and Processing Companies jointly promoted by the Board and the Rubber Producers' Societies ensures the highest farm gate price for Indian NR among all the NR producing countries.

Activities of the Rubber Board

Development Activities and Extension & Labour Welfare Measures

Technical and financial support are provided to rubber and rubberwood processing industry and in particular, the small holding sector of rubber growers for improving the quality, cost competitiveness and infrastructure for marketing through various measures. The Board has been allocated Rs. 415 crore for the 10th Plan for implementing seven development schemes viz. Rubber Plantation Development, Rubber Development in North East, Processing, Quality Upgradation & Product Diversification, Rubber Research, Human Resource Development, Export Promotion and Market Development Scheme. The rubber plantation development activities of the Board include generation and distribution of good quality planting materials, distribution of cover crop seeds, providing training for scientific exploitation of the crop, promoting voluntary organizations of small farmers for extension activities (Rubber Producers' Societies), raising block rubber plantations in association with concerned State Governments for the welfare of SC/ST, promoting RPSs, Community Processing Centres by extending technical as well as financial assistance and by providing the required infrastructure facilities, etc.

Against the 10th FiveYear Plan allocation of Rs.415.00 crore for implementation of seven development schemes of the Rubber Board, a sum of Rs. 392.67 crore has been utilized upto December, 2006. During the April - November 2006-07, the Board disbursed Rs. 134.88 lakh benefiting 8684 rubber tappers and their families against the target of Rs. 170.00 lakh for 2006-07 under its various labour welfare schemes. Underthe Price Stabilization Fund Scheme, 18759 growers were also enrolled as on 30th November 2006.

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Women Self Help Groups

Rubber Research

During the period, the Rubber Research Institute of India satisfactorily conducted research and development work in the fields of Plant Breeding, Germplasm Conservation, Biotechnology, Exploitation Technology, Agronomy and Soil Science, Plant Pathology, Plant Physiology, Agricultural Economics and Rubber Technology. The annual review meetings for evaluation of the ongoing projects were held from 11.09.2006 to 22.09.2006. The scientists presented the results and progresses being achieved in their research projects. External experts for each discipline evaluated the progress and the final report of the recommendations was prepared for future research work. Some of the major achievements during the period are:

  • An International training programme on "Strategies for management of Corynespora leaf fall disease of rubber" organised by Plant Pathology division and funded by Common Fund for Commodities (CFC), Amsterdam, The Netherlands was held in April 2006. Scientists from various rubber growing countries participated.
     
  • As a part of the Golden Jubilee celebrations, Rubber Production department and Research Department conducted farmer-scientist interaction programmes in traditional area. Regional Research Station, Guwahati also conducted the same programme jointly with RP Department at Guwahati.
     
  • The seismic bearing rubber pads developed by the Technical Consultancy division of RRII has been tested by Structural Engineering Research Centre (SERC), Chennai and the results showed that these products conform to requirement.
     
  • Rubber Growers' Conference was organised during October 2006 by RRII and 48 `innovative farmers' participated and presented their major findings. The conference was unique as the farmers themselves presented their innovations.

A book entitled "Abhivridhi Anubhavangaliloode", a compendium of the innovations made by farmers, published in local language and a short film on "Rubber Cultivation in the NE region in CD was also released.

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lady rubber tapper

In June 2006, Shri. Jairam Ramesh, the Hon'ble Minister of State for Commerce visited the Rubber Research Institute of India. The Hon'ble Minister chaired a meeting of the senior officers of the Board and also visited various laboratories in the RRII.

49
Hon'ble Minister of State for Commerce meeting the senior officers of the Rubber Research Institute of India

Processing & Product Development

The Processing and Product Development (P&PD) department continued to provide technical and financial support to rubber and rubberwood processing industry in various sectors (Rubber Producers' Societies, Co-operatives, Public sector and private estates) to improve quality and reduce cost of production to attain international competitiveness. In particular, the department concentrates mainly on the small holding sector of rubber growers for improving the quality, cost competitiveness and infrastructure for marketing through various measures. The following Plan Schemes were implemented during 2006-07.

  • Processing, Quality Upgradation and Product Diversification
  • Quality improvement of Technically Specified Rubber
  • Rubberwood promotion as eco-friendly timber
  • Strengthening Rubber Producers' Societies

In addition, the schemes of value addition of processed rubberwood through Self Help Groups (SHGs) organized by Rubber Producers' Societies (RPSs), study of the techno - economic feasibility of storing sheet rubber in dehumidified godowns by establishing one, energy audit of technically specified rubber and rubber wood processors, and quality improvement of block rubber through use of latex as raw material are also being implemented during the year.

The P & PD department jointly took up a project with Rubber Research Institute of India for studying the feasibility of Carbon Trading under the Kyoto Protocol in respect of biomass gasifiers installed in the TSR factories. In addition, the Board took up a project to set up a demonstration plant for power generation using biomass gasifiers. The Energy and Resources Institute, New Delhi has been appointed as Consultant for preparation of the CDM Project and the Board has provided the financial support to rubber and rubberwood processors for conducting Energy Audit to ensure efficient usage of energy.

Training

Various training programmes relating to rubber cultivation, rubber processing and quality improvement, rubber marketing and export development and manufacturing of rubber products for the overall development of the rubber industry were imparted to 2160 beneficiaries up to November 2006.

Miscellaneous Activities

  • The Hon'ble Minister of State for Commerce Shri. Jairam Ramesh inaugurated the new Guest House Annexe on June 7th, 2006.
     
  • The Hon'ble Minister of State for Commerce during his visit to RRII held interaction meetings with various stakeholders during his visit.

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Hon'ble Minister of State for Commerce inaugurates the new Guest House Annexe in RRII.

  • The Chairman, Rubber Board attended the 42nd Assembly of Nations of International Rubber Study Group (IRSG) and World Rubber Summit" at Kuala Lumpur, Malaysia from 24th to 28th April 2006 and presented a paper on "Indian Situation in Promotion of Natural Rubber".
     
  • The Chairman, Rubber Board inaugurated the 3rd meeting of Association of National Rubber Producing Countries (ANRPC) working group on "Protein Allergy" hosted by India from 29th May to 3rd June 2006 at Rubber Research Institute of India (RRII), Kottayam.
     
  • The Chairman, Rubber Board attended the 2nd meeting of the Expert group on "Review of ANRPC" held at Kuala Lumpur on 5th - 7th July 2006.
     
  • In order to reconstitute the new Board, the election process of large rubber growers' representatives in the State Constituencies of Kerala and Tamil Nadu was completed in May 2006.
     
  • To promote rubberwood in the national and international markets, the Board participated in 14 National Fairs and 4 International Fairs (Wood Working Fair - Milan, Italy, Woodmac China - Shanghai, Wood Working Fair - Los Angeles, USA and Big 5, Dubai).
     
  • A Pre Assessment Audit was conducted through M/s. SGS India to find out whether the rubber plantations in India conform to the principles and criteria prescribed by the Forest Stewardship Council for FSC (Forest Stewardship Council) Certification to improve its acceptability in the international market.

Price Stabilisation Fund Scheme

The Price Stabilisation Fund Scheme was launched in April 2003 against the backdrop of decline in international and domestic prices of tea, coffee, rubber and tobacco causing distress to primary growers. The growers of these commodities were particularly affected due to substantial reduction in unit value realization for these crops, at times falling below their cost of production. The objective of the Scheme is to safeguard the interests of the growers of these commodities and provide financial relief when prices fall below a specified level. Out of the total target of 12.77 lakh growers (up to 4 ha landholding), it was decided to cover 3.42 lakh small growers (up to 2 ha landholding) in the initial phase. As on 31 October 2006, the total enrolment under the Scheme is 45247.

As on 31 October 2006, the PSF Corpus Fund consists of Rs. 435.12 crore, out of which Rs.432.88 crore is contributed by GOI and Rs. 2.24 crore by Growers by way of entry fee. A sum of Rs. 63.55 crore as interest is also available to the PSF Trust. Since the launch of the Scheme in April 2003, the PSF Trust has announced Price Spectrum Bands for 2003, 2004 and 2005 and the cumulative financial assistance committed stood at Rs. 2.96 crore, details of which are as under:

Commodity PSB 2003 PSB 2004 PSB 2005 Total
Rubber

0

0

0

0

Coffee

0.82

0.58

0

1.40

Tea

0.09

0.73

0.74

1.56

Total

0.91

1.31

0.74

2.96

Due to default by growers in depositing their contribution, assistance of Rs. 1.10 crore only could be released to tea and coffee growers so far.

In addition, a personal accident insurance scheme having a cover of Rs. 25,000/- for each grower has been started from 1.1.2005. So far, 44704 growers have been covered under the Personal Accident Insurance scheme and the premium @ Rs. 9/- per grower is borne by the PSF Trust on behalf of the growers. This entails an annual contribution of Rs. 4.02 lakh by the Trust.

With a view to improve the effectiveness of the scheme and to achieve better results towards providing meaningful financial assistance to the growers, the Department of Commerce have initiated a process of restructuring the scheme. A proposal in this regard is presently under consideration of the Government.

Box 5.9 : Task Force on Plantation Sector

Government of India has constituted a Task Force on 24.7.2006 for undertaking a study to evolve a mechanism to protect the growers of tea, coffee, rubber and spices from the adverse effects of price volatility in the Plantation Sector. The Terms of Reference of the Task Force, inter-alia, were:

  • Identification and assessment of the problems and extent of 'price volatility' faced by the growers of tea, coffee, rubber and spices ;
     
  • Feasibility of making direct compensation to the growers for the losses suffered by them based on a new scheme which may be either a supplement or alternative to the existing PSF Scheme.
     
  • Feasibility of introducing an instrument for parking surplus funds during good crop years with interest at market rate.
     
  • Feasibility of risk management support mechanism to small growers.
     
  • Feasibility of introducing a social sector insurance scheme to compensate small growers.
     
  • To take into account the possibility of new producers entering the market, establishment of new plantations in virgin lands of Africa, the age-profile of India's plantations, wage rates, etc. The Task Force has since submitted its Report to the Government which is under examination.

Tobacco

India produces about 600 million kgs. of Tobacco annually. Of this, 30 per cent is (Flue Cured Virginia (FCV) Tobacco and the rest is non-FCV Tobacco such as Biddi, Natu, Burley, Chewing Tobacco, Hukka, Cigar and Snuffs. On an average, approximately 50 per cent of the FCV tobacco is used by the domestic cigarette industry while the remainder is exported. In India, about 5 million farmers are engaged in cultivation of tobacco and about 30 million people are dependent on the tobacco industry, either directly or indirectly.

Tobacco Board

The Tobacco Board was constituted in 1976 with the objective of promoting the planned development of the tobacco industry. The Board regulates the production, curing and marketing of FCV tobacco. It also monitors fluctuations in market demand, both domestic and international for FCV tobacco in order to help in devising anappropriate market strategy. In addition, it conducts extension and developmental programmes for the benefit of the growers. In essence, its function is to further the interests of the growers, manufacturers and exporters of FCV tobacco. The 26-Member Board is headquartered in Guntur (Andhra Pradesh) with subordinate offices at Bangalore, 4 Regional Offices and 29 auction platforms.

Domestic Production

The annual production of Tobacco is about 700 million kgs. of FCV and different Non-FCV types of tobaccos. The Tobacco Board regulates the production, curing and marketing of FCV tobacco with a view to matching supply with demand and thus ensuring remunerative return of the growers. India is the third largest producer and the fourth largest exporter of tobacco in the world earning an annual foreign exchange of 322 US$ million (Rs. 1413 crore) and contributing about Rs. 8382 crore as excise revenue during 2005-06 to the national exchequer.

Exports

The Tobacco Board has initiated several measures to improve the quality and yield of tobacco through improved package of practices at the farm level, improved curing and grading facilities, transfer of technology to the farmers and image promotion abroad. In this context, the Board has issued advertisements in the international print media about the positive attributes of Indian tobacco. The Tobacco Board is implementing several extension and developmental programmes such as model project areas, integrated pest management etc. to enhance the quality and production of tobacco to meet the changing international demands. These measures are directed at improving yields, quality and remunerative prices for farmers. The concerns of international customers are addressed in a focused manner to train and educate growers to meet global standards. The Board also participated in ISO/TC 126 meeting held at Las Vegas, USA on 22-23 May, 2006 EURO TAB, 2006 Budapest, Hungary, World Tobacco Asia, 2006, Bali, Indonesia.

Spices

India has a long history of producing and exporting Spices. The world trade in Spices is estimated around 7,50,000 tonnes (2005-06) of which India's share is 42.74 per cent in quantity terms. The total production of Spices in the country is estimated around 40.39 lakh tonnes (2004-05) and the area under cultivation is estimated at 25.25 lakh hectares (2004-05). While almost all States produce Spices, the important States accounting for sizeable area and production are Kerala, Karnataka, Tamil Nadu, Andhra Pradesh, Rajasthan and Maharashtra.

Spices Board

The Spices Board Act, 1986 assigns to the Spices Board the responsibility of export development of 52 Spices. Some of the major spices among them are Pepper, Chilli, Ginger, Turmeric, Cardamom, Coriander, Cumin, Fennel, Fenugreek, Celery, Vanilla and Saffron. The Board is implementing a number of schemes aimed at export development of Spices with a view to meet international standards and promotion of export of value added Spices. The Board has well established quality evaluation and upgradation laboratory at Kochi which is engaged in surveying the quality of spices procured form different producing and marketing centres. It offers training for quality upgradation to growers and exporters and undertakes physical, chemical and biological analysis of the samples brought by the exporters.

Exports

Exports of Spices are freely allowed. The main Spices/Spice products exported from India are Chillies, Pepper, Ginger, Turmeric, Seed Spices, Coriander, Cumin, Fenugreek, Curry Powders and Spice Oils and Oleoresins.

Export Promotion

In order to increase exports of spices from India, the strategies implemented by the Spices Board are focussed on high end value addition to adoption of modern processing technologies; development of new spice products and new end uses for spices; creation of niche markets for Indian organic spices; promotion of spice production and processing in the North East; expansion of spices export basket; promotion of integrated pest management; harmonization of standards etc. Accordingly, Spices Board extends financial assistance for adoption of high tech and technology upgradation; trade promotion; participation in international meetings/ seminars/ trade fairs/ publicity etc.

Developmental Activities

As per the Spices Board Act, the Board is responsible for the development of cardamom including its export promotion activities. Various programmes implemented by the Spices Board for the development of Cardamom, includes production and supply of Planting Material, Cardamom Replanting Scheme, Irrigation and Land Development, Extension Advisory Scheme, Post-Harvest Improvement of Spices, Development of Exotic and High Value Spices and Organic farming. For vanilla, the Board is implementing programmes for supporting production and processing.

The Board is also assisting tribal growers of cardamom by implementing various developmental programmes with enhanced financial assistance. Similarly, in case of large cardamom also, assistance is given through these schemes. Apart from that, Indian Cardamom Research Institute under the Spices Board carries out need based research programmes for the crop improvement work in cardamom as also post-harvest techniques.

The Board also implements programmes for development of spices in North Eastern region which include Production of Organic pepper, Construction of warehouses, supply of ginger driers and Training of officers and farmers. Board supports cardamom and vanilla on rain water harvesting and setting up of improved cardamom devices with alternate fuel.

Cashew

The export of Cashew kernel from India during 2005-2006 was 124102 lakh tonnes valued at Rs. 256277 crore (US$ 578.85 million). The Government provides financial assistance to cashew exporters through Cashew Export Promotion Council of India for improving cashew kernel quality which includes setting up/improving the facilities for Cashew Kernels in Value Added Form/Consumer Packs, Quality Upgradation by Process Improvement, Implementation of Internationally accepted Certification Scheme and Introduction of Flexi Pouch Vacuum Packing System.

Agricultural and Processed Food Products Export Development Authority (APEDA)

The Agricultural and Processed Food Products Export Development Authority (APEDA) is engaged in the export promotion and development of fruits and vegetables and their products, meat & meat products, rice, wheat, floriculture & floriculture products, processed fruits and juices and several other miscellaneous agricultural products. Some of the major product groups are:

Floriculture and Seeds

Export of Floriculture has been identified as one of the thrust areas. Growers/exporters are provided assistance under various Schemes of APEDA for improvement in packaging, quality upgradation, creation of infrastructure, etc. During the year, APEDA has led a delegation to the International Horti Fair Exhibition, the Netherlands to promote export of floriculture products. India has overtaken the Netherlands as the second largest supplier of flowers to the quality conscious Japanese market. With the success of the Market Facilitation Centre (MFC) set up at Amsterdam, the Netherlands, APEDA plans to set up similar MFCs in major importing countries and distribution centers like Japan and Dubai to augment and facilitate export of fresh cut flowers from India.

Considering the export potential that the floriculture industry has several initiatives were taken by the Government of India for the promotion of this industry. As one of the steps for promotion of this industry, it was decided to set up flower auction centers at different flower growing areas. International Flower Auction Centre, Bangalore (IFAB) was inaugurated by Hon'ble Union Minister for Commerce & Industry on 18th January, 2007 at Karnataka Agro Industries Corporation, Hebbal, Bangalore. This project is a joint effort of the Central Government (APEDA) and the State Government. Thetotal cost of this project is estimatedto be approximately Rs. 10 crore. APEDA's contribution is Rs. 3.57 crore and Rs. 6.12 crore is from the Karnataka State Government in the form of land measuring 5.11 acres, at Habbel. Further Rs. 3 crore have been sanctioned under ASIDE scheme of Government of India of which Rs. 73 lakh has been released for creating a state of art electronic auction system.

The objective of IFAB is to provide the producers new markets so that they get a fair price for their produce which will not only provide the increased income but they would also be left with addition money to develop their business. Market will provide feedback and reward for the quality produce. It would also be transparent and competitive at all levels. IFAB would also be tool to enhance the export potential of the industry and provide environmental friendly production methods. Apart from the direct benefits of the auction center, the auction center would also provide addition employment for both skilled and unskilled labour and would introduce a new grading system in India.

The Mumbai wholesale market-cum-flower auction center is being set up at Maharashtra Agro Industries Corporation (MAIDC) at Aarey milk colony, Goregoan, Mumbai with a financial assistance of Rs. 7.35 crore from Government of India out of the total project cost of Rs. 22.23 crore. The center is due to be commissioned in the month of April, 2007. The Auction Centre can accommodate over 112 bidders. Only registered buyers are allowed to bid here. Producers will be registered for supplies. Quality of the flowers is checked before putting them to the auctions.

Establishment of the auction centers is very essential for the growth of the floriculture industry. It would give fillip to the growers in view of the fact that the flower auction center will cater to their marketing needs and the flower growers can concentrate on flower production without getting concerned about marketing of the flowers.

Fresh Fruits and Vegetables

India is the second largest producer of fruits and vegetables in the world. There has been significant increase in the export of fresh fruits and vegetables during the past few years. Exports increased from Rs. 433 crore in 1994-95 to Rs. 2012.16 crore in 2005-06. The major fruits exported are mangoes, grapes, citrus fruits, pomegranates, lychees, dried nuts and fresh onions. To increase the volume and price competitiveness, APEDA proposes to use CA/reefer technology to transport mangoes to Europe. China has opened its market for Indian mango, grapes and bitter gourd. Efforts were on to secure market access for the fruits in Japan, USA and Australia. The long awaited access to the Japanese Market for Indian Mangoes was achieved in June, 2006. The first consignment left the Indian shores for Japan in June, 2006. Efforts are still on to seek market access for Indian mangoes in USA and Australia. The promotional programme for mangoes was organized in leading super markets in Dubai and Germany during the year. Wet sampling and free distribution of major varieties of mangoes was carried out during the promotion programmes.

To boost exports of Indian horticultural products, APEDA is providing support in the formof infrastructure, packaging, quality, commercializing research for purpose of export as well as providing transport subsidy. As a result of the assistance extended by APEDA, integrated pack houses have come up in the major production areas of grapes, mango, pomegranate and gherkins.

Processed Fruits and Vegetables and Other processed Food

Export of processed fruits and vegetables is another thrust area for encouraging export of value added products. A number of large national and multinational companies have now entered processed food industries with a thrust on exports. Exports of processed fruits and vegetables and other processed food increased from Rs. 348 crore in 1994-95 to Rs. 2052.10 crore in 2005-06. Products like vegetable curries, dals, sweets etc. in improved packaging have been introduced for reaching the new markets. The growth in this group is contributed by pulses, processed fruits and juices and processed vegetables.

Schemes of APEDA

Government has provided financial assistance to eligible exporters for establishment of various facilities for export of Scheduled Products of APEDA during 2004-2005 under its various schemes. These schemes include Scheme for Infrastructure Development; Scheme for Market Development; Scheme for Quality Development; Scheme for Research and Development; Scheme for Transport Assistance.

Agri Export Zones

The concept of Agri Export Zones (AEZs) was introduced in Exim Policy announced for the year 2001-02. The objective was to take a look at an agriculture produce in a comprehensive manner - right from farm to palate - so as to be able to deliver an appropriately priced and attractively packaged quality product in the international market. The Steering Committee of AEZs under the Department of Commerce, has so far, accorded sanction for 60 AEZs in 20 states. The process of re-vitalizing the Agri Export Zones on the basis of peer evaluation of selected AEZs is underway.

Meat & Meat Preparations

As per Foreign Trade Policy, export of beef (i.e. meat of cow and its progeny) is banned. While buffalo meat is exported both in fresh and frozen forms, the sheep and goat meat is generally exported in fresh form. This sector has shown growth in export from Rs. 448.36 crore in 1994-95 to Rs. 2713 crore in 2005-06. The export of meat and meat products during the current year (April - August 2006) was Rs. 1190.57 crore. The Government of India has taken the following quality control measures for export of meat:

  • APEDA is regularly involved in various standards being formulated by the Codex Alimentarious Commission to ensure that India's interests are reflected in the decisions taken in the Codex Committee meetings.
     
  • Standards have been laid down for export of meat and meat products under Export (Quality Control and Inspection) Act, 1963.
     
  • The abattoirs and meat plants engaged in export production are required to be registered with APEDA, compulsory vide DGFT notification 12/(2004-2009) dated 21st December 2004. The plants are periodically inspected by a committee consisting of officials of various Government Departments.
     
  • APEDA has been operating various schemes under which financial assistance is provided to the exporters for creation of Infrastructure, implementation of international quality systems such as HACCP, ISO-9000 etc., setting up of in- house quality control laboratories, conducting surveys and feasibility studies, market development and packaging development etc.

Marine Products Export Development Authority (MPEDA)

The Marine Products Export Development Authority (MPEDA) is a body responsible for development of export of marine products from India. Some of the developmental and promotional activities undertaken by MPEDA during the year 2006-07 are:

Thrust Area

The following areas are being given greater attention for facilitating enhanced export of marine products:

  • Expanding the area under aquaculture.
  • Increasing the share of value added products in the export basket.
  • Modernisation of seafood plants and facilities relating thereto.
  • Improving the conditions prevalent in the basic infrastructure like landing centres and fishing harbours, etc.
  • Preventing the outbreak of disease in the shrimp farms.
  • Exploiting the potential of Tuna, etc in the deep-sea areas.
  • Encouraging the production of quality seafood under proper hygienic conditions.

Steps taken to increase export during2006-07

  • Steps taken to increase the production and quality of cultured Shrimp and Scampi:
     
  • Taking up of Technical assistance demonstration programmes incorporating participatory approach.
     
  • Focusing on the introduction of Better Management Practices (BMP) and adoption of code of practices in shrimp farms.
     
  • Arranging seminars and workshops arranged to ensure greater awareness of organic aquaculture in India.
     
  • Steps taken to improve quality of marine products meant for export:
     
  • The National Residue Control Plan (NRCP) to monitor the residue levels of various environmental contaminants in aquaculture products was continued during the year.
     
  • Hazard Analysis Critical Control Point (HACCP) team assisted seafood processing units in preparing HACCP manual and implementation of HACCP system.
     
  • HACCP training programmes conducted for the benefit of Technologists / Quality Control Personnel from seafood industry.
     
  • MPEDA Labs at Kochi, Nellore and Bhimavaram obtained certification under ISO 9001: 2000.
     
  • The three MPEDA labs obtained accreditation by NABL (National Accreditation Board for Testing and Calibration Laboratories under ISO: 17025: 2005 under the scope of chemical testing. Now test results of these laboratories will be accepted by the importing countries without further verification.
     
  • A New Laboratory at Bhubaneswar is being set up at for catering to the testing requirements of Orissa region for antibiotics like Nitrofurans and Chloramphenicol by shifting the Liquid Chromatograph Mass Spectrometer Mass Spectrometer (LCMSMS) installed at CIFA Bhubaneswar. Other accessories required for the laboratory are being purchased.
     
  • State-of-the-art laboratories have been set up in maritime states to meet the requirements of European Union.
     
  • Other Developmental / Promotional activities:
     
  • Training camps were organised to train the crew of mechanised fishing vessels on the proper use of equipment such asfish finders, GPS, radiotelephones and fish hold, for locating large deep water marine resources.
     
  • Training programmes were organised in monofilament tuna long-lining by availing assistance of overseas experts.
     
  • Demonstration programmes were organised on the use of TED (Turtle Excluder Device) on trawl nets at various regions as a conservation measure for marine turtles.
  • Promotional schemes on development of aquaculture and augmenting fresh water shrimps have been taken up for increasing production for export.
     
  • A Society by name Network for Fish Quality Management & Sustainable Fishing (NETFISH) has been set up by MPEDA for carrying out the extension programmes of MPEDA, with its headquarters in Kochi.
     
  • The National Centre for Sustainable Aquaculture (NaCSA), a new agency has been set up by the Marine Products Export Development Authority to ensure effective extension linkage with coastal aquaculture farmers. Accordingly NaCSA has been registered under the Societies Registration Act of Andhra Pradesh with Head Quarters at Kakinada.
     
  • Traceability of product through out the supply chain has been introduced in Seafood Plants in all the regions.
     
  • Financial assistance was extended to exporters for setting up/ modernizing/ upgrading processing facilities with a view of achieve the level of international quality standards, such as EU/HACCP norms.
     
  • Action has been initiated to upgrade/modernise various basic projects like fishing harbours/fish landing centres in various states under the ASIDE Scheme.
     
  • Various schemes to promote value addition and diversification of marine products to facilitate higher unit/ value realisation have been implemented.

49

Export of Marine Products

Export of marine products amounted to US $ 1644.21 million during the year 2005-06, registering a growth of 11.21 per cent as compared to the previous year. In quantitative terms, the growth was 11.02 per cent. The details of quantity and value-wise exports of marine products during the last two years are given below:

  2004-05 2005-06 Growth %

Quantity (Metric Tonnes)

461329

512154

11.02

Value (Rs. crore)

6646.69

7245.30

9.01

Value (US$ million)

1478.48

1644.21

11.21

49Source: Marine Products Export Development Authority The main markets for Indian marine products are the European Union, the USA, Japan and China. During the year 2005-06, the EU was the single largest market for our marine products with a

share of 27 per cent and 29.4 per cent in quantity and value terms respectively. Export to EU countries registered an increase of 16.2 49per cent in volume, 17.4 per cent in rupees terms and 19.4 per cent in Dollar value terms as compared to the previous year. Export to USA also showed a growth of 11.5 per cent in volume, 5.3 per cent in rupee value and 7.8 per cent in US dollar terms as compared to the previous year. The share of USA in our overall marine exports was 11 per cent in quantity 22.6 per cent in value terms. Export to Japan registered a growth of 3.4 per cent in quantitative terms while it showed a decline of 3.8 per cent and 1.5 per cent in rupee value and dollar terms respectively during the year. The share of Japan during the year was only 12% in volume terms contributing to 27 per cent of total exports; China's share in value was only 11.7% in value terms. This was mainly due to the export of low valued items, especially finfish varieties like frozen Ribbonfish, frozen Croaker, etc.

The export of marine products during April-December 2006 amounted to Rs. 6055.39 crore (US$ 1330.16 million) registering a growth of 8.03 per cent in rupee terms and 4.30 per cent in dollar terms, as compared to that of the corresponding period of previous year.

The major items of export are frozen shrimp, frozen finfish, frozen cuttle fish and frozen squid. Frozen Shrimp was the single largest

4949

item of exports, which amounted to Rs. 4271.51 crore (US$ 970.43 million) contributing to nearly 59 per cent of the total exports. Frozen Fish continued to be a major item in terms of volume in our export basket with a share of 36 per cent. The main component was ribbonfish, majority of which was exported to China. The share of frozen squid and frozen cuttle fish was 7.9 per cent and 7.6 per cent respectively.

 

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