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8. PLANTATIONS & AGRICULTURE

COMMODITY : TEA
INTRODUCTION

1. India is the largest producer and consumer of tea in the world. Tea is grown in 16 States in India, of which Assam, Kerala, Tamilnadu and West Bengal account for about 96% of the total production. Other traditional states where tea is produced in small scale are Tripura, Karnataka, Uttranchal and Himachal Pradesh while in the recent past tea cultivations has been introduced in all the non-traditional North Eastern states viz: Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, as also Orissa and Bihar. The teas originating from Darjeeling, Assam and Nilgiris are well known for their distinctive quality world over.

2. Tea exports bring in a significant amount of foreign exchange into the country as well as revenue to the National Exchequer by way of cess, sales tax, agricultural and corporate income tax etc. More than two million people derive their livelihood from ancillary activities associated with the tea industry while the Plantations situated in backward rural and remote parts of the country generate employment and social welfare. The tea Industry provides direct employment to for more than a million workers, of which a sizeable number are women.

TEA BOARD - CONSTITUTION AND FUNCTIONS

In order to promote all-round development of tea industry the Tea Board was set up as a statutory body under the Tea Act, 1953 which functions under the jurisdiction of the Ministry of Commerce & Industry, Department of Commerce The Board comprises of 31 members including the Chairman, who is the Chief Executive Officer and appointed by the Central Government. The Board is being reconstituted every three years. The present Board was reconstituted in April 2002.

Tea Board is engaged in development of tea production through extension of crop area , improvement in the quality, export and domestic market expansion , promotion of co-operative efforts of growers, research and development in tea etc. The Board also issues exporters’ license as part of its regulatory work. Tea waste license, Tea Warehousing License etc. Tea Board also plays a major role in the collection of tea statistics and in the adoption of welfare measures for workers in tea plantations.

Apart from the Head Office at Kolkata, the Board has Zonal Offices at Coonoor and Guwahathi under the charge of Executive Directors. Tea Board has a number of Regional offices in different parts of India as well as offices overseas viz., Moscow, Dubai, and London.

PRODUCTION

The estimated production of tea in India during 2003-2004 was 850.49 M.kgs as against 837.60 M.kgs in 2002-2003. However due to adverse agro-climatic conditions in the tea growing areas in North and South India during 2004-05, the total production is expected to decline to reach 831 M. kg. with estimates of production from April to October being at 697.19 M.kgs

Table-1 

Production of Tea in India during 2004-05

EXPORTS

Tea exports from India during 2003-2004 were estimated to be about 183.07 million kgs. valued at Rs. 1636.99 crore with a unit price of Rs. 89.42 per kg. as against 184.40 million kgs. valued at Rs.1665.04 crore with a unit price of Rs. 90.29 per kg in 2002-03. During the year 2004-05, export of tea is expected to touch 190 million kgs. valued at Rs.1710 crore (approximate). The projected exports for the period April to October 2004-05 are 103.75 million kgs. and valued at Rs 904.90 crore.

IMPORTS

During the six months period from April 2004 to September 2004) 19.11 million Kgs. of tea, valued at Rs. 82.49 crore was imported into India as against 5.02 million kgs valued at Rs. 31.60 crore during the corresponding period of last year. As per the available trends, imports during 2004-05 are expected to be around 25 million kgs as as compared to revised estimates of 11.10 million kgs during the same period in 2003-04.

Though tea was a restricted item of imports under ITC (HS) classification until 31.3.2001 with the removal of Quantitative Restrictions (QR) effective from 01.04.2001, tea could be imported from any country without any license.

The import duty on tea was increased from 70% to 100% in the budget for 2002-03 while dutey free import are allowed under the Duty Exemption Scheme and EOU scheme subject to positive value addition and re-exports after blending with Indian tea. Domestic Tariff Area (DTA) sales of tea by Export Oriented Units (EOUs), except instant tea, are not allowed.

Under the Indo-Sri Lanka Free Trade Agreement signed on 28th December 1998, tea from Sri Lanka up to 15 million kgs annually can be imported into India at a concessional import duty of 7.5%. although the tea imports from Sri Lanka were negligible as could be seen from the following table.

MARKETING SYSTEM

Though tea is sold privately by the growers, the primary marketing of tea is conducted through public tea auction centres at Kolkata, Guwahati, Siliguri, Amritsar, Coonoor, Coimbatore and Cochin under licensed issued by the Tea Board. The Government of Tamil Nadu has set up the first ever IT enabled Tea Auction Centre at Coonoor.

During the year under report, as a part of the IT based Information Dissemination Plan, Tea Board had initiated electronic trading of tea in major public auction centers. to improve the market efficiency in terms of reduced transaction time and costs. So far, electronic auction have been introduced in four auction centers namely Coimbatore, Guwahati, Cochin and Coonoor and issued licence for opening an electronic auction centre at Jalpaiguri in West Bengal. The IT portal available at www.indiateaportal.com is indicative of efforts for effective dissemination of information relating to all aspects of tea industry. With the introduction of the modified auction rules as per the provision of Tea Marketing Control Order 2003 which was notified on 1st January, 2003 there has been a marked improvement in the conduct of auctions in all the Tea Auction Centers in the country.

PRICES

Since April 2004 prices started looking up at all the Auctions and the down ward trend of witnessed over the past five years was reversed. The improved price situation also facilitated reopening of many closed tea gardens. The trend in prices until October 2004 when compared to the corresponding period of previous year were as under:

TEA DEVELOPMENT

Tea Board is entrusted with the implementing the following developmental schemes during the 10th Five Year Plan for enhancing productivity, quality and marketability of tea in the country: with a total plan outlay of Rs. 350 crore.

  • Tea Plantation Development Scheme (Rs. 98.59 crore)

  • Market Promotion Scheme (98.60 crore)

  • Quality Upgradation and Product Diversification Scheme (Rs.76.80 crore).

  • Research & Development Schemes (Rs.70 crore)

  • Human Resource Development Scheme (Rs.6.01crore)

The focus of the development schemes during the 10th Plan is on supply factors such as improving quality, cost control, productivity increase through consolidation of the existing area, rather than expansion of the area, and market promotion in both domestic and international markets to match supply and demand.

During the first two years of the plan period a sum of Rs112.55 crore has been disbursed to the industry under the above five schemes. During the current financial year (2004-05) the disbursement is expected to be around Rs. 70 crore.

CREATION OF A SPECIAL FUND FOR DEVELOPMENT, MODERNISATION AND REHABILITATION OF TEA PLANTATION SECTOR

The excise duty of Re.1/- per kg. on tea was replaced in the Union Budget for 2003-04 by an additional duty of excise of Re1/- per kg as a surcharge, to generate funds for long term development and modernisation of the tea plantations sector. The contribution to this fund during four years of 10th Plan beginning from 2003-04 is expected to be about Rs.250 crore. The schemes to be financed out of the fund are under consideration of the Government

CLOSED TEA GARDENS

The problem of the tea gardens were studied by 3 Expert Committees appointed by the Government. Based on the reports submitted by the Expert Committees, the Central Government and the Tea Board have facilitated discussions between the management of the closed tea gardens and their bankers with a view to arrive at a revival package.

A number of tea gardens were reopened during the year under report. The total number of gardens which still remain closed as on December, 2004 are 34 as per details given below:

TEA RESEARCH

Historically, tea research and extension activities are managed by the industry controlled two tea research institutes i.e., Tea Research Association(TRA)located at Jorhat in Assam for North India, and United Planters’ Association of Southern India-Tea Research Foundation(UPASI-TRF) in Tamil Nadu for South India. Tea Board shares 49% of the annual expenditure (on the major identified items) of TRA and UPASI TRF. Both the institutes have a wide net work of sub centers in all the major tea growing regions for extension of advisory service. Tea Board is also having a small R & D unit – ‘Darjeeling Tea Research and Development Centre’(DTR&DC) at Kurseong. Besides the recurring grant, both these institutes also receive 100% grant under the plan schemes of Tea Board towards implementing special research projects. The research activities cover both basic and applied research aimed at increasing bush productivity, quality improvement, cost reduction, agronomy, soil, irrigation, plant protection, biochemistry, product derivates and diversification, engineering and transfer of technology.

Under the 10th Plan, 11 specialized research schemes have been assigned to TRA and UPASI TRF. Some of the specific areas covered under these schemes include setting up of chain of quality testing laboratories in different tea growing zones, networking of the advisory centers with the main research institutes for narrowing the gap between the lab to land, usage of bio fertilizers, bio control studies and pesticide residues etc.

Notable Progress so far

  • Assistance is also being extended for establishment of a small Tea Research Field Laboratory in Uttaranchal in order to develop a scientific package of practices suitable for cultivation of tea in Kumaon region.

  •  The project on ‘application of Bio-technological tools in tea breeding’ which has been co-ordinated by the Department of Bio Technology and partly funded by Tea Board is in the final stages of completion.

  • A pilot plant has been set up at TRA Jorhat under the project on ‘application of electronic devices in tea manufacturing and automation’ which has been co-ordinated by the Ministry of Information Technology.

  • With the establishment of pesticide residue testing laboratories in the North East and South India, scientific data on residue in tea have been generated for developing a national protocol which is now being considered by the Prevention of Food Adulteration Authorities(PFA) and also Inter Governmental Group on tea of FAO(Food and Agriculture Organisation) towards harmonization of MRL. The standards as stipulated in the European Commission and other countries are also being circulated to the tea industry from time to time.

  • The National standard on quality of tea were revised and harmonized with the International standards. Similarly the quality parameters of the International standard ISO 3720 were also revised. The draft for revised specifications for green tea have been finalized for publication.

  • Harmonization of Maximum Residue Level (MRL) is an important area that was dealt with during the year and the required data pertaining to Indian teas was submitted to the European Union for consideration and also submitted to the Inter Governmental Group, FAO. Similar data was also submitted to the CODEX Committee on pesticide residue as per guidelines in the international protocol. Generation and submission of residue data are continuous process and the same is monitored and coordinated amongst different laboratories by Tea Board.

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. In keeping with the requirements of the export and 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 also 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, New York & Dubai. The New York office was closed down by end of July 2004.
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. Market development activities include market surveys, market analysis and tracking of consumer behavior, 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. Markets in Russia/CIS, UK, UAE, etc., continued to be of vital importance.

With the slowing down in the rate of domestic consumption of tea, increasing competition from other beverages, particularly soft drinks, and developments in the global arena, the liberalized regime of imports under the WTO obligations and India’s Free Trade Agreement with Sri Lanka on preferential tariff terms, there has been a revised focus of the Tea Board on tea promotion in India. In this pursuit the Board had organized a number of promotional activities in the country than in the past. They were mainly aimed at the youth and young housewives, propagating health benefits of tea. A pilot campaign ‘Rediscover Tea’ targeted at the urban youth had been launched in Kolkata during the last quarter of 2004. This project is being extended to other States in a phased manner.

To tackle the problem of declining exports and to enable Indian tea to face many challenges particularly due to the intense competition in the international market, the Tea Board had developed a Medium Term Export Strategy (2002-07) and recommend an Implementation Plan for Indian tea. The programmes initiated earlier were continued through the year 2004-05. This included the following:

  1. Having finalized the modalities for India Tea ‘World Gold Standard’ logo approval and monitoring mechanism for teas packed in India for exports to Russia and thereafter, a separate monitoring mechanism for logo usage on teas packed in Russia, the monitoring agencies have been selected. The same could soon be rolled out for exports to other countries.

  2. Information dissemination to provide accurate and timely information to different stakeholders & market consolidation.

  3. Diversification of export market portfolio, targeting value addition and niche segment opportunities in specific markets, etc.

Buyer Seller Meets: Efforts are being made to maintain and improve trade relation between exporters and importers by direct contact and discussions. During the year 2004-2005, Tea Board received and organized the visit of number of important tea delegations. Deputations/delegations from India during 2004-2005 were also organized. Chairman, Tea Board and Deputy Secretary, Department of Commerce visited Cairo, Tehran and Dubai where Buyer-seller-Meets were organized. Chairman also led a delegation comprising Producers and Exporters of Darjeeling tea, for Buyer-seller-Meets to UK and Germany. The 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. During the year, there was a first time participation in Korea.

Efforts have been on to protect India’s Intellectual Property Rights in Tea starting with Darjeeling. Tea Board has been trying to protect its various brands (India Tea, Darjeeling, Assam and Nilgiri) since the mid 80’s. The legal frame-work under which such protection is accorded varies according to the Intellectual Property Rights’ regime of various jurisdictions. Tea Board’s logos are registered in various jurisdictions. However, India’s accession to WTO and the need for compliance with conditions of the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement have changed the framework under which IPR s are protected in various jurisdictions. Under this regime, Tea Board has to first register the Intellectual Properties in the country of origin followed by registration in various other jurisdictions depending on the legal framework available in those jurisdictions for protection of such types of intellectual properties (not just trade mark laws). This necessitates registration of the above Intellectual Properties under the Geographical Indication of Goods (Registration and Protection), Act 1999 which has been done. The Certificate of Registration declaring Darjeeling Tea as a Geographical Indication has also been issued 29th October 2004. Tea Board has obtained registration of its Darjeeling Word and Logo as Certification Trade Marks under the Trade Marks Act in India. The Darjeeling Certification Trade Mark Protection Process was officially announced in February 2000 and this is a continuing effort of the Board.

LABOUR WELFARE ACTIVITIES

During the year under report, Tea Board had continued various labour welfare measures for the benefit of plantation workers and their dependents. These include grant of stipend to the wards of plantation workers for pursuing studies above the primary stage, extension of capital grant/financial assistance to various institutions and organizations in the plantation districts towards expansion of school and college buildings, purchase of medical equipments, ambulances , reservation of beds in hospitals, organising sports and scouts activities, etc.

FERTILIZER ALLOCATION TO TEA INDUSTRY

One of the important functions of the Board is to render assistance to the tea industry towards the procurement, movement and distribution of various inputs like coal, fertilizers(Urea). Fertilisers for the tea industry is allocated by the Ministry of Agriculture, (under the Essential commodities Act) on half yearly basis, i.e. Kharif and Rabi Season, on the basis of requirements as indicated by Tea Board.

HUMAN RESOURCE DEVELOPMENT

Human Resource Development Cell of the Tea has been arranging various types of training programme, workshop, seminar etc. for the employees/officers of the Board as a part of its activities. During the period from April to November, 2004, some employees and officers of the Board have participated in various training programmes/workshops/seminars etc. organised by reputed institutions. Some in-house Training Programme (s) on some important topics are also proposed to be undertaken.

VIGILANCE CELL

Tea Board’s Vigilance Cell is headed by the Deputy Chairman of the Board who has been appointed as the Chief Vigilance Officer of the Board by the Central Vigilance Commission. The Cell engages itself with surveillance and preventive vigilance, in addition to taking appropriate action in matters arising out of information/complaints received. The Cell attends to queries of the Government of India and the Central Vigilance Commission as and when such queries are received. Monthly and Quarterly Reports are prepared by the Cell and are sent timely to the Ministry of Commerce and the Central Vigilance Commission. The overall vigilance activities of the Board are looked after by the Chief Vigilance Officer who is assisted by the officials of the Board including Supply Officer who is acting as Vigilance Officer in addition to his normal duties in Supply Branch.

Tea Board observed ‘Vigilance Awareness Week from 01.11.2004 to 06.11.2004 at its Head Office and different Zonal/Regional Offices by organising various programmes in a befitting manner.

Because of non-availability of eligible SC/ST candidates in different cadre within the Groups, posts reserved for SC/ST could not be filled up causing shortfall in percentage for SC/ST vis-à-vis the percentage as stipulated for each category. However, action is being taken to fill up certain posts by SC/ST candidates through direct recruitment under the Annual Direct Recruitment Plan of the Ministry of Commerce & Industry. (SC/ST reservation policy is not applicable for deputationists)

MAJOR STEPS TAKEN BY THE GOVERNMENT TO HELP THE TEA INDUSTRY

  • Considering the financial difficulties faced by the tea Industry, the Indian Banks’ Association was persuaded to extend a special relief package to the industry. Accordingly, IBA had issued guidelines to all its member banks in February 2004 to extend a Special Tea Term Loan (STTL) for the tea sector. The package provides for restructuring/rephasing of irregular portion of outstanding term/working capital loans of the tea companies with repayment over 5 to 7 years and a moratorium of 1 year. The STTL also provides for working capital up to Rs. 2 lakhs at a rate not exceeding 9% to small growers.

  • A sum of Rs.23.25 crore was allocated to Tea Board for implementing an adhoc price subsidy scheme for small tea growers for a four month period from February to May 2004. Through this scheme, subsidy was extended to small growers at the rate of Rs.2 per kg. of green leaf harvested by them during the same period.

  • A price sharing formula between small tea growers and manufacturers of tea at an approximate 60:40 ratio is being implemented w.e.f. 1.4.2004 with a view to ensure that the small growers get a reasonable share of the price for the green leaf supplied by them to the manufacturers. As per this formula, the manufacturers are required to provide 60% of the net sale proceeds to the small growers as long as the price fetched by them for the made tea remains either at par or below the state average. When the sale price of the tea exceed the state average, the differential between the sale price and the State average needs to be shared between the grower and the manufacture in the ratio of 50:50.

  • The import duty on items of machinery used to improve productivity and quality of tea, including value addition, has been reduced to an all inclusive rate of 5 percent.

  • An Inter-Ministerial Committee, set up by the Ministry of Labour, has also studied the issues relating to the plantation sector, particularly the social costs, provident fund dues of the plantation workers and taxation structures. The recommendations of this Committee are under consideration of the Government.

  • In order to address the various problems of the industry and draw up a long term strategy for sustained growth of tea sector, a stakeholders’ conference on challenges before Indian tea industry was organized jointly by the Ministry of Commerce and Industry and Tea Board in New Delhi on 16th & 17th September, 2004. The conference was attended by the representatives of all the sections of the tea industry including producers, workers, labour unions, traders, researchers, State Governments, concerned Ministries of Government of India etc. A whole range of issues on tea relating to production, productivity, research, reforms, marketing, taxation and legislation covering land and labour laws etc. were discussed. In all, twenty five recommendations emerged at the end of the conference. A Tea Advisory Committee comprising 31 members representing all the important segments of the industry has been constituted to oversee the implementation of the recommendations.

It is expected that overall improvement in productivity, cost reduction, a conscious effort towards improvement of quality and better management practices would go a long way in reviving the tea industry and ensuring welfare of the workers.

COMMODITY : RUBBER

1. Introduction

With sustained research and development activities being carried out by the Rubber Board coupled with extension and advisory services and transfer of technology to the fields, India has become the fourth largest rubber producer in the world next to Thailand, Indonesia and Malaysia with the highest average productivity of around 1663 kgs. per ha. The country is also the fourth largest consumer of natural rubber next to China, USA and Japan.

The State of Kerala and adjoining Kanyakumari district of Tamilnadu are the traditional and major rubber growing areas of the country thoguhb it is also grown in Tripura, Assam, Megahalaya , Mizoram, Manipur, Goa and Coastal Karnataka. Over 5.70 lakh hectares of area spread over 15 States and one Union territory of the country is under rubber plantations, dominated by small holdings (less than 0.5 ha) that account for 88% of the production. Ten lakh producers and about 7 lakh people derive their employment from the plantation sector either directly or indirectly.

2. Constitution and functions of the Rubber Board

The Rubber Board is a statutory body set up under the Rubber Act, 1947 with the objective of promoting the development of the rubber industry in India. The Board comprises of 26 members including the Chairman, Rubber Board who is the Chief Executive and appointed by the Central Government. The Board is constituted once in three years and it was last reconstituted in September, 2003.

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 planting cultivation, manuring and spraying, rendering technical advice to the rubber growers, improving marketing of rubber, collecting statistics from owners of estates and manufacturers, and securing better working conditions and the providing and improving amenities and incentives for workers.

The Headquarters of the Board is located at Kottayam. The Board has 4 Zonal offices, nine Sub/Liaison Offices 2 Nucleus Rubber Estate and Training Centres, 42 Regional Offices, 167 Field Stations, 13 regional Nurseries including 2 District Development Centres, one Central Nursery and 19 Tappers’ Training Schools located at different rubber growing regions, two Regional Research Stations in Kerala and a regional Station each in Tamil Nadu, Karnataka, Maharashtra, Orissa, West Bengal, Assam, Mizoram, Meghalaya & Tripura and four factoris viz. Pilot Block Rubber factory, Pilot Plant for Radiation Vulcanisation of Natural Rubber Latex, Pilot Latex Processing Factory and Model Technically Specified Rubber factory.

3. Production, consumption, import and export

(a) Production

During 2003-04, the Indian rubber plantation industry emerged from a long sluggish period by registering a remarkable growth in production and productivity. As against 0.2 percent growth during 2001-02 and 2.9 percent growth during 2002-03, the Natural Rubber (NR) production achieveda growth of 9.6%, during 2003-04- the highest in the decade. During this period 7,11,650 tonnes of NR was produced as against 6,49,435 tonnes in 2002-03. Better adoption of scientific agro-management practices by the farmers following improved prices of NR coupled with favourable weather conditions and expansion in tapped area, together contributed to this robust growth. As a result, the average yield per hectare went up from 1592 kg. during 2002-03 to 1663 kg. during 2003-04.

The production of NR for the year 2004-05 is projected at 7,62,000 tonnes at 7% growth and the actual production during April to December 2004 was 5,92,280 tonnes which was higher by 6% over the production of 5,58,890 tonnes during the corresponding period last year.

(b) Consumption

Demand for NR in the country continued to increase during 2003-04 registering 3.5% growth. The total consumption of NR by the rubber goods manufacturing industry was 7,19,600 tonnes during 2003-04 as against 6,95,425 tonnes during 2002-03. The dominant auto tyre manufacturing sector consumption grew at 7.1% during 2003-04 compared to 16% during 2002-03. However, the demand inform the the general rubber goods sector declined from 2.6% during 2002-03 to negative 0.3% during 2003-04.

The consumption of NR during 2004-05 is projected at 7,60,000 tonnes at a growth of 5.6%. The actual consumption of NR during the period from April 2004 to December 2004 was 5,67,810 tonnes registering 5.5% increase over the consumption of 5,38,400 tonnes during the same period last year.

(c) Import of NR

An important development in Government policy on import of NR during the year 2003-04, was the removal of the ban on import under Advance Licence Scheme in July 2003 following a judgement of the Supreme Court of India. Another important development was the reduction of basic customs duty on NR from 25% to 20% and abolition of Special Additional Duty (SAD) of 4% from 9th January 2004. As per the data collected by the Board, the imports during 2003-04 surged to 44,199 tonnes from 26,217 tonnes in 2002-03.

Yet another significant development in the Government policy on import of NR during 2004-05 is the removal of port restrictions on import of NR imposed by Govt. of India in December 2001, from 6th August 2004.

The import of NR during 1st April 2004 to 31st December, 2004 was 48,795 tonnes exceeding the total import of NR during 2003-04.

(d) Export of NR

Even though export of NR was freely allowed from 1992 onwards, only small quantities of rubber were exported. As a result of the export promotion activities of the Government under the Export Promotion Scheme, the export of NR during 2003-04 registered a considerable increase to 75,905 tonnes, which was 6,995 tonnes in 2001-02 and 55,311 tonnes in 2002-03. The increasing trend is continuing in the current year too with exports registering 40,564 tonnes by 31st December 2004.

Recently, the Government have reduced the assistance for export of NR under the Export Promotion Scheme to 50% of the rate that prevailed during last year and the quantity for export assistance has been limited to 34,000 tonnes of NR.

4. Price of NR

Natural rubber prices both in the domestic and international markets remained appreciably high during 2003-04. The average annual price of RSS-4 grade sheet rubber was Rs. 5,040/- per 100 kg during 2003-04 as compared to Rs. 3,919/- per 100 kg during 2002-03. The spurt in the price of NR witnessed during 2003-04 continued during 2004-05 as well. The price of RSS-4 grade rubber in the domestic market set an all time record of Rs.6,750 per 100 kgs. on 6th July 2004. The average price of natural rubber during December 2004 was Rs. 5188 per 100 kgs. as against the international price of Rs 5248 per 100 kgs.

5. Marketing system

Marketing link to about a million producers and 4791Rubber goods manufacturers is provided through 9842 licensed dealers and 130 processors operating in the country. The marketing network of primary Co-operative Marketing Societies and the Trading and Processing Companies jointly promoted by the Rubber Board and the Rubber Producers’ Societies ensurs the highest farm gate price for Indian NR among all the NR producing countries.

6. Development activities, extension and labour welfare programmes

(a) Schemes being implemented by the Board

The Board has been allocated Rs.415 crore for the Tenth Five Year Plan for implementation of 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 included replanting, new planting, 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/financial assistance and by providing the required infrastructure facilities, etc.

The Board continued to provide technical and financial support to rubber and rubberwood processing units particularly the small holding sector for improving the quality, cost competitiveness and infrastructure for marketing through various measures under two schemes viz., Processing Quality Upgradation and Product Diversification and Market Development. During 2003-04 a sum of Rs.49.81 lakh was disbursed as financial assistance to five Block Rubber Factories and 9 Latex Centrifuging Factories for quality improvement. During 2004-05 upto November, 2004 a sum of Rs.26.84 lakh was disbursed as financial assistance to five Technically Specified Rubber (TSR) Factories and two Rubber Wood Processing Companies for quality improvement.

Under the Market Development scheme, the Board continued its activities in promoting rubberwood in the national and international markets as an eco-friendly material suited for furniture and interiors During the year, the Board participated in six international fairs, (China-2,USA-1, Japan-1, Abu Dhabi-1 and Dubai-1). Indian rubberwood was not known in the international market till recently and participation in these fairs has created an awareness about Indian rubberwood in the international market. The Board also participated fourteen national level fairs and five state level fairs for promoting rubberwood.

The Board continued to monitor the quality of block rubber and latex concentrate produced in the country through periodic inspections and collection of samples for testing. The rubberwood testing laboratory provided testing facilities to rubberwood processors.
With a view to helping the processors to attain international competitiveness with respect to quality and cost, the Government of India issued notifications reducing the customs duty on import of machinery/equipment from 25 to 5% and exempting additional duty of customs and special additional duty of customs in the case of slab cutter, shredder, solid pump, vibrating screen, Plastimeter and aging oven, latex centrifuging machine.

During the year 2003-04, the Rubber Training Centre imparted training on various aspects related to rubber cultivation, rubber processing and rubber products manufacturing for making available trained manpower for the overall development of the industry. A total of 4,345 beneficiaries were trained, of which 1,015 persons were from the SC/ST/Women category.

During the year 2004-05, the Rubber Training Centre provided training to 7346 persons from 1st April to 30th November, 2004 on various topics. Specialised training on rubber cultivation and rubber product manufacture was given to participants from countries like Tanzania, Sri Lanka and Bangladesh.

(b) Labour Welfare Measures

Under the Board’s various labour welfare schemes, a sum of Rs.200.8 lakh was disbursed during the year 2003-04 benefiting 20,289 rubber tappers / their families. Rs.83.07 lakh was disbursed from 1st April 2004 to 30th November, 2004 under various labour welfare programmes.

(c) Women Empowerment Programmes

The Board continued to provide support to the women empowerment programmes through income generation as well as training activities through Rubber Producers’ Societies. The women self help groups are supported strongly in the areas of training and marketing of their products. Special emphasis is given for training programmes for empowerment and welfare of women in the North Eastern States.

(d) Block plantation project for SC/ST

The Projects are implemented jointly by the Board and the State Governments of Andhra Pradesh, Karnataka, Kerala, Orissa and Tripura. The concerned State Governments financially support the project. The project which adopts an integrated approach aims at an overall development of SC/ST categories. The achievements of the project are as follows:

7. Rubber Development Scheme in North Eastern Region

The Board has adopted an integrated approach during the 10th Five Year Plan period on a village basis consisting of two components viz.

(i) Revitalization of sick plantations and restocking of poor plantations; and

(ii) Expansion of area under rubber by creating processing and marketing facilities, adopting group approach.

Since rubber is a relatively new crop in the North-Eastern Region, strong extension support is required to make the farmers adopt scientific agro-management practices. Towards this end, Board has been providing training to farmers, distributing estate inputs and cover crops, provides financial assistance for boundary protection, established group processing centers, supplied rubber rollers, rubber sheeting rollers free of cost, etc. During 2003-04 rubber plantations were raised on an area of 1849 ha. in the North Eastern Region.

The Board has disbursed a sum of Rs.5.5 crore as financial incentive for the rubber plantation development activities in the North-East during 2003-04 and during 2004-05, upto 30th November 2004, a sum of Rs.1.5 crore has been disbursed.

8. Rubber Research

The Rubber Research Institute of India was established in 1955 with its headquarters at Kottayam. The main research farm of the Institute is located in an area of 250 ha. at in Pathanamthitta District of , Kerala State while its nine Regional Research Stations are spread across the country in the states of Assam, Karnataka, Kerala, Maharashtra, Meghalaya, Orissa, Tamilnadu, Tripura and West Bengal. Four Regional Research Stations in the North-East form the North-East Research Complex with its headquarter at Agartala. The Institute conducts 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. Research projects in all the above disciplines progressed well during the year.

(a) Participation in International Conferences/Meetings

Dr. N.M. Mathew, Director; Dr. K.R. Vijayakumar, Joint Director and Dr. James Jacob, Deputy Director attended the annual conference and meetings of the International Rubber Research and Development Board which were held at Kunming in China during 6-12 September 2004. Five research papers were presented.

(b) Training imparted/Attachment

Six scientists were deputed to universities/institutes in USA, Germany and South Korea for advanced training in various fields for two to six months. Two technical officers from the Rubber Research Institute of Sri Lanka were given training in RRII.

(c) Golden Jubilee Celebrations

‘2005’ is the Golden Jubilee year of RRII. A National Organizing Committee has been constituted to evolve programmes/activities to commemorate the jubilee in a befitting manner.

9. Steps taken for the benefit of the Rubber growers/ industry

Lifting of Port restrictions on import of natural rubber

Taking into account the problems faced by the rubber consuming industry, the port restrictions have since been lifted w.e.f 6.8.2004 and natural rubber is allowed to be imported though all ports.

Export Promotion of Natural Rubber Scheme

In the context of boosting exports of NR and establishing India as a regular exporter of this commodity, Government through Rubber Board has been implementing an Export Promotion of Natural Rubber Scheme since 2001. The scheme inter-alia provided for financial assistance to the exporters of NR for quality upgradation, certification, transportation etc. The scheme has since been reviewed and it has recently (vide order dt. 17.11.2004) been decided to continue providing the financial incentives during the current year at reduced rates.

Quality Standards on imported rubber

To regulate the import of inferior rubber coming into the country the BIS standards are enforsed on imported rubber also. Taking into consideration the concerns expressed by the importers regarding the time taken for testing the samples at the only authorised laboratory at Kottayam, the Board has taken steps to reduce the time in drawing samples and forwarding the same from Kolkata to Kottayam. The Board has also identified laboratories attached to the following organsisations/institutions for the purpose of testing the quality of imported rubber:

  • Indian Rubber Manufacturers’ Research Association (IRMRA), Thane, Mumbai

  • Madras Institute of Technology, Department of Rubber Technology, Chennai

  • National Science and Technological Laboratory, Vishakkapatnam

  • National Testing House, Kolkata.

Other laboratories/test houses will be added in due course to the list of labs/test houses authorised to test the quality of imported rubber.

Price Stabilisation Fund Scheme (PSF)

Price Stabilisation Fund Scheme was launched by the Government of India in April, 2003 for the benefit of the small growers of tea, coffee, rubber and tobacco. The objective of the Price Stabilisation Fund Scheme is to provide financial assistance to growers of these commodities having landholding upto 4 ha, when the prices of these commodities fall below a specified level without resorting to market intervention. The scheme is being implemented from out of the interest earnings of the corpus of Rs. 500 crore set up by the Government. The corpus of Rs. 500 crore includes Rs.482.88 crore by grant from the Govt. of India and Rs.17.12 crore by the participating growers. The scheme is being operationalised through the Price Stabilisation Fund Trust (PSFT).

The Price Stabilisation Fund Scheme is a participatory scheme between the growers and the Government, based on the principle of contributions from the growers and from the Government depending on normal/boom/distress periods with provision for withdrawals during distress periods. The scheme provides for declaration of annual Price Spectrum band. A uniform band of 40% for all the four commodities has been adopted with a price spectrum band of +/- 20% from the seven year’s moving average of international prices In normal years when the prices remain within the price spectrum band, the grower is required to deposit Rs.500 each year to his Price Stabilisation Fund Account by a specified date. The Government contributes upto Rs. 500 to the individual grower’s account in these years Howevver when price go beyond the upper level, the grower’s contribution is a minimum of Rs. 1000 while the Government does not make any contribution. Conversly when prices fall below the lower bound, the grower is not required to contribute any amount, while the contribution from the Government goes upto Rs.1000. When prices worsen, that is when prices fall below the lower bound, the grower is permitted to withdraw an amount upto Rs. 1000.

Upto December 2004, 30322 growers have enrolled themselves under the Scheme. Commodity-wise enrolment of growers is - Rubber – 18,181; Coffee– 9,521; and Tea – 2,620. No tobacco grower has so far enrolled under the Scheme.
Government has announced the Price Spectrum Band for the year 2003 in respect of tea, coffee and rubber. As per the band, 2003 is normal year for tea, distress year for coffee and boom year for rubber and accordingly the pay-in and pay-outs have been determined. Accordingly, the PSF Trust has, during 2004-2005 provided financial assistance of Rs. 82.26 lakhs to 8226 Coffee growers and Rs. 9.31 lakhs to 1861 Tea growers. During the year, 16240 Rubber and 1861 Tea growers are required to deposit a total amount of Rs. 171.71 lakhs in the PSF SB Accounts. Only Coffee growers would be permitted to withdraw upto Rs. 1000/- from the PSF SB Account. Rubber and Tea growers are not permitted to withdraw any amount.

In addition to the financial assistance paid to the member growers under PSF Scheme, the Price Stabilisation Fund Trust has obtained a Master Policy under the ‘Janata Personal Accident Insurance” scheme from the United India Insurance Co. Ltd. for 23936 growers. Under the policy the member-grower would be provided accident insurance coverage of Rs. 25,000 for the period 1st January, 2005 to 31st December, 2005. The entire premium has been paid by the Price Stabilisation Fund Trust and no premium is required to be paid by the member-grower.

Due to low enrolment of growers under the scheme, an Expert Committee has been constituted under the Chairmanship of Dr. Pronab Sen, Advisor, Planning Commission to review the scheme and make it more attractive to the growers. The Committee will be submitting its recommendations shortly.

COMMODITY : COFFEE

1. Introduction

Coffee, produced in over 50 countries, mostly developing nations, provides livelihood to about 100 million people around the world. Although  India  contributes  only  around  4%  of the world production,  Indian coffee has created a niche for itself in  the international market, particularly Indian Robusta which is highly preferred  for its good blending quality. Arabica Coffee from India is also well received in the international market.

In India, coffee plantations occupy an area of around 3.5 lakh hectares, area providing employment in rural area pre-dominantly in Karnataka, Kerala and Tamil Nadu, which together contribute about 99% of the total coffee production. There are 1,78,308 coffee holdings, out of which 1,75,475 of which fall within the small growers’ category and balance 2833 holdings fall under large holdings (above 10ha.). The small growers account for 71.2% of the total area i.e. 2,52,860 ha. out of total area of 3,55,102 ha.

2. Constitution and Functions of the Board

Coffee Board is a statutory body constituted under the Coffee Act VI of 1942 and comes under the Administrative control of the Ministry of Commerce, Government of India. The Board comprises of 33 members including the Chairman, who is the Chief Executive and appointed by the Central Government.

Besides assisting the Government of India in the formulation of policies concerning the coffee industry to prescribe and monitor quality standards and parameters at all stages in the production of coffee the functions of the Coffee Board are directed towards research, extension and development of coffee; domestic and external promotion of coffee and gathering of market intelligence; to take up relevant human resource development programmes for representatives of the industry.

The Chairperson of the Board, fuctions as its administrative and executive head assisted by Secretary. While the Head Office is situated in Bangalore, the Board has its offices at Delhi, Guwahati, Mysore, Chennai. Besides, the Board has also the Central Coffee Research Institute at Chikmagalur and Sub/Regional Stations at Chettalli, Chundale, Thandigudi, R.V. Nagar, Diphu and Division of Tissue Culture, Mysore.

3. Production, Consumption and Imports and Exports

(a) Production

The states of Karnataka, Kerala and Tamil Nadu produce 70%, 23% and 6% respectively of the total production in the country while the balance comes from Non-Traditional areas and the NE Region. The estimated production of coffee during 2004-05 is 2,92,000 tonnes comprising of 1,16,800 tonnes of Arabica and 1,75,600 tonnes of Robusta with ashare of 40% and 60% respectively.

(b) Domestic Consumption

Coffee is facing a stiff competition from tea and other bottled drinks/colas and as such since last ten years the domestic consumption of coffee has been hovering around 60-70 thousand tonnes per annum.

The Coffee Board has initiated several steps/programmes for increasing domestic consumption. To this end , the Board has been organising coffee festivals and imparting training for coffee brewing to the Hotel Sector; participating in all major internal trade fairs and strengthening the performance of Coffee Houses operated by the Board.

(c ) Import of Coffee

The domestic coffee market is only 18% of the total coffee production of India. As such, the import of coffee has been insignificant. However, in order to discourage import of coffee, the import duty on coffee has already been increased from 70% to 100%. By doing so, coffees of other origin are made un-competitive compared to Indian Coffee in the domestic market.

(d) Exports

India exports over 80% of the coffee produced in the country to over 60 countries. Nevertheless India is a marginal player in the global coffee arena and its contribution to total global coffee exports is around 4%.

During the year 2003-04 a total of 2,32,684 tonnes of coffee valued at Rs. 1158.45 crore 262.03 (US$ 262 mn) was exported. So far (as on 15.10.2004) a total of 1,06,267 tonnes was exported during the year 2004-05 earning a foreign exchange of Rs. 545.91 crore as against export target of 2,25,000 tonnes with a value of Rs 1150 crore.

4. Prices of Coffee

The Coffee prices in India are largely influenced by the New York Exchange for Arabicas and London Exchange for Robustas. In the recent years, the international coffee prices have fallen due to excess coffee production by the producing countries. The price fall has affected all the coffee producing countries including India In fact, iIn the last few years, there has been a significant fall in the domestic/international prices of coffee. A decline in domestic coffee prices began in 1997, in tandem with global prices, and accelerated from 2000 onwards. Prices of coffee that were Rs.130 per kg for top grade Arabica and Rs.56 per kg for Robusta in 1997, came down to Rs.56 per kg. for Arabica coffee and Rs 34 per kg. for Robusta coffee in the year 2003. However, there has been an improvement in the domestic prices of coffee especially in Arabica coffee with prices prevailing at Rs.103 per kg for Arabica and Rs.37 per kg for Robusta in December, 2004.

5. Marketing system

Following 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 continued to collect and compile daily market information on prices, supply, demand and other fundamental and technical factors that are important for market analysis. The Unit published a Data Base for the month of May, July, September and November 2004 while the same for the months of January and March 2005 will be published during this financial year.

6. Development activities, labour and other welfare programmes

(a) Development Programmes

During the 10th Five Year Plan period, the Coffee Board is implementing a number of plan schemes supported by suitable financial incentives for development of coffee sector, aimed at improving productivity and quality of Indian coffee for raising its competitiveness in the global markets. A sum of Rs.300 crores was allocated to tbe Board as against Rs.124 crores during the the 9th Five Plan period, for implementing various coffee developmental schemes. During the 10th Plan for implementing the following schemes:

(i) Production, Productivity and Quality improvement

(ii) Infrastructure Development, Capacity Building and Transfer of technology

(iii) Market Development

(iv) Interest Subsidy for Small Growers (2002-03 and 2003-04))*

(v) Interest Subsidy for Large Growers (2002-03)*

(vi) Transportation Subsidy for Coffee Exporters 2002-03 and 2003-04)

(vii) Support to Small Grower Sector.

*Scheme to provide interest relief to both large and small coffee growers during the remaining period of the 10th Plan is being considered.
During the year 2003-04, a total sum of Rs 45.54 crore was spent on various plan schemes.

(b) Coffee Development in North Eastern Region & Non Traditional Areas

Under plan scheme, viz. Coffee development in N.E. Region, financial incentives were extended to 1269 growers covering an area of 1300 hectares for coffee expansion / consolidation and an amount of Rs. 1176.90 lakhs was disbursed to growers. Under market support program, an expenditure of Rs. 8.55 lakhs was incurred to market 134.6 tonnes of coffee.

In the NE region the Extension Wing conducted 423 group gatherings, held 1041 method demonstrations on nursery / bush / shade / soil management practices and also organized 25 Farmers Participatory Programmes to educate the farmers on various aspects of coffee cultivation.

(c) Labour Welfare

The Coffee Board implements the schemes called “ Labour Welfare Measures” for the benefit of workers in coffee plantations and coffee curing works spread over the entire coffee growing areas/states including North Eastern region every year. During 2003-04 the Board has implemented the scheme for granting Educational stipends, Meritorious Awards, Financial Aid besides Donations. An amount of Rs. 21,05,200 was spent on this count while an an amount of Rs. 9,40,000 was also spent for purchasing furnitures, library books, laboratory equipments to the educational institutions.

(d) Women Empowerment

Under the Labour welfare measure 2004-05 provision has been made to help the female children of the laborers working in coffee estates/ coffee works, who dropped out from classes of 7th standard and onwards. to continue their studies.

In order to empower women educationally and financially the Coffee Board is providing vocational training for women plantation workers under Human Resources Development scheme to hone their skills for generating additional income and improveing their overall socio-economic conditions. During the year 2004-05, the Board has envisaged to provide vocational training for 500 women plantation workers through ICAR institutions like Krishi Vigyan Kendras.

(f) Welfare measures relating to SCs/STs

The reservation as per post based reservation system has been applied during the year under report.

7. Coffee Research

The Research Department of the Coffee Board continued its research activities during the period under report from the Central Coffee Research Institute from Chikmagalur and also from the following Sub/Regional Stations, Chettalli, Chundale, Thandigudi, R.V. Nagar, Diphu & Mysore. In addition, the Quality Division at Head Office and Hassan also comes under Research Department.

The Research department has identified key research areas under different scientific disciplines for 10th Five Year Plan and all the research programmes were continued in the second year of X Plan i.e., 2003-04. The Central Coffee Research Institute at Balehonnur, Chikmagalur, Karnataka and its Regional Research Stations located at Kodagu, Chundale (Kerala), Thandigudi (Tamil Nadu), R.V.Nagar (Andhra Pradesh), Diphu (Assam), Tissue Culture and Biotechnology Divisions (Mysore) and Quality Up-gradation Centre (Bangalore) have carried out investigations on various aspects of coffee culture. Coffee research is being pursued under a scheme for improving production, productivity and quality of coffee. The major disciplines under the Scheme are, Crop Improvement (Botany, Tissue Culture and Biotechnology), Crop Management (Ag. Chemistry/ Soil Science, Agronomy, Plant Physiology) and Crop Protection (Entomology & Plant Pathology). In addition, Post Harvest Technology and Quality Evaluation & Up-gradation Divisions are conducting studies on the aspects relating to coffee quality improvement.

8. Internal & External Promotion

The Promotion Department of the Coffee Board functions as a principal constituent of the Board, for promoting the consumption of coffee in India and increasing the exports. The external publicity for Indian Coffee is aimed at projecting the quality of Indian Coffee as Quality Coffee for use both in itself and in blends.

(a) External Publicity

The external promotion activities include (1) Participation in selected international exhibitions and trade fairs by exhibiting exportable grades of raw coffee, India/Instant coffee, charts, blow-ups and distribution of promotional literature on Indian coffee in different languages. At all these fairs liquid coffee is also prepared and served to the visitors through Coffee Board’s stalls;(2) On several occasions coinciding with Board’s participation in fairs/exhibitions the Buyer Seller Meets with active association of Indian Exporters are organized; (3) Advertisements on the excellence and selectivity of Indian coffee in trade journals and magazines having good circulation in potential market for Indian coffee are released.

During the period under review, the Board participated in the International Fairs/exhibitions held in US, Italy, Australia, China, Russia, Singapore, Spain and Italy.

(b) Internal Publicity

The internal Publicity aimed at increasing consumption of pure coffee by promoting the correct technique of roasting, grinding and brewing coffee in the cup, is achieved by operating a network of India Coffee Houses and India Coffee Depots situated in different parts of the country.

The Coffee Board during the period under review participated in important exhibitions within the country held in places like Coimbatore, Coonoor, Kolkata, Jaipur, New Delhi and Chandigarh. The Board has also been organizing several workshops on “How to brew a perfect cup of filter Coffee” in various parts of the country for the benefit of housewives, hoteliers and all those who are interested in coffee brewing. Moreover, the Board’s Quality Control Division also conducts “Kaapi Shastra” courses in important cities in addition to video film shows such as “Kaapi Karma”, etc.

The Promotional Units sell special blends of coffee powder in the pure form. Specially designed coffee filters for domestic use are also made available to the public. India Coffee Houses serve pure (liquid) coffee in the cup brewed as per the standard laid down for making the best coffee. Coffee in the cup is also made available to the public through India Coffee Houses functioning in different parts of the country.

9. Publications and Journal

(a) Indian Coffee Journal

The journal of the Board viz “Indian Coffee” was released during the period under review as a monthly in Kannada and English and as a quarterly in Malayalam and Tamil. The English version is attached with a Hindi segment.

(b) Coffee Year Book

An elegant Annual Coffee Year Book cum Diary 2004 containing information on the Coffee Industry is printed and published.

10. Steps Taken for the Benefit of Coffee Growers

The Government of India through the Coffee Board, has also been providing necessary support in the form of agricultural research, extension, arrangement 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 the international markets. The Board is also encouraging the large growers to produce specialty coffees which fetch attractive premiums in developed countries like USA and European Union.

The following measures were also initiated for the benefit of coffee growers:

  • An interest relief scheme was extended for providing 5% interest relief to small coffee growers on working capital /crop loans availed by them from financial institutions, and in this connection, an expenditure of Rs 6.70 crores was incurred which benefited 77,257 growers covering an area of 83,000 ha.

  • A plan scheme was implemented viz. Support to Small Growers Sector wherein 25% subsidy for water augmentation and 20% subsidy for taking up quality up-gradation, replanting and pollution abatement was extended to small growers. During the year 2003-04, 435 units were covered involving an area of 21518 ha. and an expenditure of Rs 59.51 lakhs was incurred.

  • During 2001-02, 2002-03 and 2003-04, Coffee Board implemented a scheme under which financial assistance upto Rs.500 per tonne was provided to the Indian coffee exporters for off-setting the handling costs.

  • In order to improve productivity and quality of coffee and making it globally competitive, the custom duty on certain types of coffee processing and brewing machinery has been reduced to 5%.

  • Benefits of Section 33AB of the Income Tax Act, which were already available to tea sector, were extended to coffee sector.

EXPORT OF AGRICULTURAL PRODUCTS

Exports of agricultural products are dependant on several factors such as domestic production and consumption, exportable surpluses, consumer preferences, varieties traded, quality, domestic and international prices and availability of infrastructure facilities for storage, post harvest handling, etc. Having regard to the social and economic importance of the agricultural sector, the export strategy of the Government is based on the premise that foreign earnings from this sector should be enhanced thereby leading to higher income to farmers, while taking care to make agricultural products available at reasonable prices to the domestic consumers.

Agricultural exports to the total export of the country during the year 2003-04 constitute about 8.18%. Agricultural exports which were at US$ 4.6 billion during the year 2002-03 increased to US$ 5.1 billion for the year 2003-04 registering an increase of 10.87% as compared to previous year. The agro product exports can be divided into three broad categories i.e., raw products, semi processed products and export-specific and value added products. The raw products are of low value but high volume; semi processed products are of intermediate value and limited volume; and export-specific and value added products are of high value and low volume.

The major agricultural products exported from India during 2003-04 are foodgrains (US$ 1.5 billion), meat, poultry & dairy (US$ 0.44 billion), fresh fruits and vegetables (US$ 0.37 billion), processed foods (US$ 0.39 billion), nuts and seeds (US$ 0.65 billion), oilmeals (US$ 0.71 billion), tobacco (US$ 0.24 billion), spices (US$ 0.33 billion), sugar and molasses (US$ 0.27 billion).
In order to boost export of agro products, the Government provides various incentives through Commodity Boards/Council for infrastructure development, quality and quality control, market development and promotion, packaging, publicity, information dissemination etc.

The details of export of the major commodities for the last few years and for the period April-August 2003-04 are given in Annexure-I and II respectively. The Productwise performance is given in the succeeding paragraphse while list of major export markets and our main competitors is at Annexure-III .

RICE

The international trade in rice is dominated by Thailand, United States of America and Vietnam. Rice constitutes the bulk of the total food grains export basket and is freely exportable from India without any quantitative and price restrictions. However, the export contracts of Basmati rice are required to be registered with Agricultural and Processed Food Products Export Development Authority (APEDA). The major Basmati rice export markets are Saudi Arabia, United Kingdom, Kuwait, United States of America and United Arab Emirates while non-Basmati rice is directed to Bangladesh, Indonesia, Philippines, South Africa and Malayasia.

WHEAT AND WHEAT PRODUCTS

Exports of wheat and wheat products have been allowed freely with effect from 5.3.2002. During 2003-04 the export of wheat has been to Bangladesh, Philippines, Indonesia, United Arab Emirates, Yemen Republic, Sudan, Korea Republic, Sri Lanka, Malaysia, Korea Republic, Tanzania Republic, etc.

PULSES

Pulses production in the country has been stagnating at around 11 to 14 million tones as against domestic demand for around 20 million tonnes. As a result India is a net importer of pulses. The major buyers of Indian pulses during 2003-04 were Bangladesh, Nepal, United States of America Singapore, Japan, United Arab Emirates, United Kingdom, Sri Lanka, Saudi Arabia etc.

OIL MEALS

Soyabean meal accounts for more than 70% of the export turnover from this sector. The exports of oil meals during 2003-04 were 31.72 lakh metric tonnes valued at Rs. 3272 crore as compared to 17.76 lakh metric tonnes valued at Rs. 1487 crore for the corresponding period last year. The major importers of oil meals during 2003-04 were Indonesia, Vietnam Socialist Democratic Republic, Republic of Korea, Thailand, Democratic People’s Republic of Korea, Sri Lanka, Pakistan, Iran, etc.

TOBACCO

India produces about 600 million kgs. of tobacco annually. Thirty percent of it is FCV tobacco and the remainder is non-FCV tobacco such as Biddi, Natu, Burley, Chewing tobacco, Hukka, Cigar and Snuffs. About 5 million Indian farmers are engaged in cultivation of tobacco and about 30 million people are dependent on the tobacco industry, either directly or indirectly. On an average, approximately 50% of the FCV tobacco is used by the domestic cigarette industry while the remainder is exported.In 2003-04, the tobacco industry earned a sum of Rs 1176 crore in foreign exchange.

The Tobacco Board was constituted in 1976 with the objective of promoting a planned development of tobacco industry, under the overall control of the Union Government. The Board regulates production, curing and marketing of FCV tobacco. It also monitors fluctuations in market demand, both domestic and international, in order to help in devising an appropriate market strategy. In addition, the Board conducts extension and developmental programmes for the benefit of the growers. 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 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. For the 2003-04 season, the Board fixed the target of 53 million kgs. for Karnataka and 111.06 million kgs. for Andhra Pradesh, Orissa and Maharashtra. Of this share of Orissa & Maharashtra is less than 1 percent.

Exports

The Tobacco Board has initiated several measures to improve the quality and yield of tobacco through a package of improved practices at the farm level which includes better curing and grading facilities, transfer of technology to farmers and image promotion abroad. In this context, the Board has issued advertisements in the international print media about the positive attribute of Indian tobacco. The Board also participated in the Grand Tabck Expo, Moscow , Foodex, 2004 Japan and other exhibitions. The details of export of tobacco for the last few years and for the period April-August 2003-04 are given in Annexure-I and II.

SPICES

India has a long history of producing and exporting spices. The world trade in spices in 2003-04 was estimated around 6.70 lakh tons. of which India’s share was 37 per cent. In 2002-03 the total production of spices in the country is estimated around 28.20 lakh tonnes while the area under cultivation is estimated at 24.95 lakh ha. While almost all States produce spices, the states with sizeable area and production are Kerala, Karnataka, Tamil Nadu, Andhra Pradesh, Rajasthan and Maharashtra.

The 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 Cochin with facilities for surveying the quality of spices procured form different producing and marketing centres. It offers training in 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. Chillies, pepper, ginger, turmeric, seed spices, coriander, cumin, fenugreek, curry powders and spice oils and oleoresins are the main spices/spice products exported from India. The details of export of spices during the last few years and in 2003-04 (upto April-August) are given in Annexures I & II respectively.

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; 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 extend 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, include 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.

Board is also assisting tribal growers of cardamom by implementing various developmental programmes with enhanced financial assistance. Similarly, in case of large cardamom, assistance is given under 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. For vanilla, the Board is implementing programmes for supporting production and processing.

Spices 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.

CASHEW

Exports

Among the agricultural products exported from India during 2003-04, cashew ranked number three in position as a foreign exchange earner and contributed 0.58% of the total foreign exchange earnings of the country’s exports The export of cashew kernel from India during 2003-2004 was 1 lakh tonnes valued at Rs.1804.43 crore (US $ 393 Million). About half the exports were to the American Zone while the European Zone accounted for 30%, the West Asian Zone for 11.54%, the South East & Far East Asian Zone for 7.45%, the Oceanic Zone for 0.60% and the African Zone for 0.45%.

Export Promotion

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.

HORTICULTURE AND FLORICULTURE PRODUCTS, FRUITS AND VEGETABLES, PROCESSED FRUITS AND JUICES AND OTHER MISCELLANEOUS PRODUCTS

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

Floriculture and Seeds

Export of Floriculture has been identified as one of the thrust areas. Growers/exporters are provided assistance under various Schemes for improvement in packaging, quality upgradation, creation of infrastructure, etc. Export of floriculture and seeds has registered a significant increase over the years from Rs. 55 crore in 1994-95 to Rs.303.15 crore in 2003-04.

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 crores in 1994-95 to Rs. 1457.26 crores in 2003-04. The major fruits exported are mangoes, grapes, citrus fruits, dried nuts and fresh onions. Some new fruits introduced by Indian exporters in international markets are strawberries, pomegranates, lychees and custard apples. In order to improve quality of fruits and vegetables, pre-harvest manuals on Manadarin and Lychees have been prepared for dissemination to farmers and producers. Agricultural and Processed Food Products Export Development Authority(APEDA) have conducted programmes for an integrated training of horticulture producers for some identified fruits such as grapes, kesar mangoes, and pomegranates in the selected regions. APEDA encouraged the exporters of mangoes to use new technologies for transportation by which is expected to help in increasing the volume and price competitiveness of mangoes. To boost exports of Indian horticultural products APEDA is providing support in the form of Infrastructure, packaging, quality, commercializing research for purpose of export as well as providing transport subsidy. In order to promote Indian mangoes, a promotion campaign of Indian mangoes was undertaken in Shanghai and Beijing during July 2004 and also in UAE during June, 2004.

Processed Fruits and Vegetables

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 fruit industries with a thrust on exports. Some of the new products which have been introduced in the market are tomato paste in bulk aseptic packs, button mushrooms, freeze dried and Instant Quick Frozen fruits and vegetables and gherkins.Exports of processed fruits and vegetables increased from Rs. 348 crore in 1994-95 to Rs.1125.81 crore in 2003-04.

New Products introduced by APEDA

APEDA is a promotional agency and does not undertake direct exports of any products on its own account. However, it continued its efforts to promote new products and open up new markets. Through the efforts of APEDA many new products from India have been introduced in the last five years. These include grapes, mangoes, pomegranates, cut flowers, tomato prepared/preserved, canned button mushrooms, freeze dried mushrooms and other vegetables, gherkins preserved/fresh.

Schemes of APEDA

Government has provided financial assistance to eligible exporters for establishment of various facilities for export of Scheduled Products of APEDA during 2003-2004 under its various schemes. These schemes include Scheme for Infrastructure Development; Market Development; Quality Development; Research and Development; Transport Assistance.

Organic farms

APEDA had set up four model organic farms in the North East Region for Joha rice (Assam), Sugarcane (Assam), Passion fruit (Manipur) and Pineapple (Tripura). Progress in the farms was satisfactory in the second year of operation and APEDA facilitated exports of these products with the help of some of the leading organic exporters. To gain further impetus to organic farming in these States, APEDA proposed to transfer the model farms for maintaining them as demonstration farms. In this process, the model farm of Tripura has been transferred to the State Government. In this connection, a Memorandum of Understanding has been signed between Tripura and Agriculture and Processed Food Products Export Development Authority.

A data base has been created to facilitate information to the producers, exporters and others and is being placed on the APEDA web site.

Agri Export Zones

The concept of Agri Export Zones (AEZs) was introduced in Exim Policy announced for the year 2001-02 to take a look at an agriculture produce in a comprehensive manner – right from farm to palate –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 with an envisaged an investment of Rs. 1717.95 crore to generate export of Rs.11821.47 crore over a period of 5 years. Against these projections, these AEZs have so far attracted an investment of Rs. 309.26 crore and realized exports of Rs. 2107.40 crore over the last 3 years. During financial year 2004-05, 12 following AEZs have been approved by the Steering Committee. The state of Rajasthan has been added to the list of states with approval of AEZs for Cumin and Coriander.

Meat & Meat Preparations

Beef (i.e. meat of cow and its progeny) is banned for export. 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.2024.81 crore in 2003-04. As a result of initiatives such as exploring new markets, negotiating with importing countries for lifting ban on meat imports from India , along with a number of steps taken to improve its quality such as specifying internationally acceptable standards for raw meat (chilled and frozen) and processed meat, animal casings, upgrading of slaughter houses and increased efforts for control of animal diseases a growth of 15.2% is expected during the year 2004-05.

Agriculture and Processed Food Products Export Development Authority initiated steps to resolve the high import duty problem and the Thailand market for frozen buffalo meat was also opened.

EXPORT SCENARIO OF MARINE PRODUCTS

During 2003-04, export of marine products from the country amounted to Rs.6091.95 crore (US$ 1330.76 mn) as compared to Rs.6881.31 crore (US$ 1424.90 mn), reflecting a decline of 11.5% in Rupee terms and 6.6% in Dollar terms. The details of exports are given below:

Source: Marine Products Export Development Authority

The decline in export was mainly due to adverse market conditions prevailing in the major markets of the United States of America(USA), Japan and the European Union(EU) and fall in domestic production of fish from capture sources.

2. Major markets for our marine products

The main markets for Indian seafood products are the USA, Japan, the European Union and China. The USA continued to be the single largest market for our marine products during 2003-04. Export to USA declined by 13.9% in volume, 18% in Rupee terms and 13.8% in US dollar terms compared to the previous year. The share of USA in our overall marine exports declined from 13.2% in 2002-03 to 12.9% in 2003-04 in quantity, from 29.8% to 27.6% In Rupee terms, and from 29.8% to 27.5% in Dollar terms. Export to EU countries showed increase of 1.8% in value, 5.9% in Rupee terms and 11.2% in Dollar terms as compared to 2002-03. The member countries of EU together accounted for 23.4%, 24.2% and 24 % in quantity, Rupee value and in Dollar terms respectively during 2003-04. Export to Japan registered a decline of 8.9% in quantity, 24.2% in Rupee terms and 20% in Dolar terms during the year. The share of Japan during the year was only 12.4% in volume and 19.1% in value. Though China occupied the top position in volume terms contributing to 30 % of total exports, China’s share in value was only 11.1% in Rupee terms and 11.4% in Dollar terms. This was mainly due to the export of low valued items, especially finfish varieties like frozen Ribbonfish, frozen Croaker, etc. There was also a significant decrease in export to China in terms of quantity by 27.6% and value by 11.28% in Rupee terms and 4.2% in Dollar terms.

3. Major item-wise export of marine products

Shrimp, frozen finfish, frozen cuttle fish and frozen squid are the major items of marine export. Frozen Shrimp was the single largest item of exports, which amounted to Rs. 4013.07 crore (US $ 876.64 million) as compared to Rs. 4608.31 million( US $ 953.44 million), contributing to nearly 66% of the total exports. The decline in exports was due to the adverse market conditions in the major markets like USA, Japan. Frozen Fish continued to be a major item in terms of volume in our export basket with a share of 33.5%. The main component was Ribbonfish, majority of which was exported to China.

There was an increase of 5.9% in the overall unit value realization in Dollar terms. The unit value of all major items like frozen Fish, frozen Squid and frozen Cuttlefish showed an increasing trend except live items, which showed a decline of 9.42%.

4. Exports during the current year

Export of marine products during April-October 2004 amounted to Rs.3565.16 crore (US$ 785.43 million) against Rs.3623.18 crore (US$ 782.56 million) during the corresponding period of previous year, reflecting a decline of 1.6% in Rupee terms and a marginal growth of 0.37% in Dollar terms.

5. Thrust Areas

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

  1. Bringing more area under aquaculture.

  2. Increasing the share of value added products in the export basket.

  3. Modernisation of seafood plants and facilities relating thereto.

  4. Improving the conditions prevalent in the basic infrastructure like landing centres and fishing harbours, etc.

  5. Prevention of disease in the shrimp farms.

  6. Exploitation of the potential of Tuna, etc. in the deep sea areas.

  7. Production of quality seafood under proper hygienic conditions.

Appropriate schemes are devised and implemented by the Marine Products Export Development Authority (MPEDA), a body responsible for development of export of marine products from India, under the administrative control of this Department.

6. Steps taken to increase exports during 2004-05

Some of the important developmental and promotional activities undertaken by MPEDA during the year 2004-05 are as follows:

  1. Training camps were organized to train the crew of mechanized fishing vessels on the proper use of equipments such as fish finder, GPS, radiotelephone and fish hold which help locate large deep water marine resources.

  2.  Promotional schemes on development of aquaculture and augmenting fresh water shrimps have been taken up for increasing production for export .

  3. For the development of shrimp and scampi culture, Mission Mode document in respect of Gujarat and Orissa have been completed and presented to the respective State Governments.

  4. Training programmes on implementation of Hazard Analysis Critical Control Programme (HACCP) were organised.

  5. Subsidies were extended to exporters for setting up / modernizing / upgrading processing facilities with a view to achieve the level of international quality standards, such as EU/HACCP norms.

  6. MPEDA equipped three laboratories for testing various quality parameters of seafood meant for export – one in Kerala and two in Andhra Pradesh – to help the processors to adhere to norms specified by the European Union.

  7. State - of - the - art laboratories have been set up all over maritime states to meet the requirements of European Union.

  8. A Pilot Project on traceability of product through out the supply chain has been launched in the state of Andhra Pradesh, which is also being extended to other regions.

  9. Under the Scheme to promote setting up of infrastructure projects for processing/pre-processing of fishery products with the assistance of State Governments, a project for pre-processing has been commissioned in Kerala.

  10. Action has been initiated to upgrade/modernize various basic projects like fishing harbours/ fish-landing centers in various states under the ASIDE Scheme.

  11. Various schemes to promote value addition and diversification of marine products to facilitate higher unit /value realization have been implemented.

  12. Revised guidelines for issuing new certificate of registration to exporters were introduced.

  13. A two member delegation of Italian Health officials visited processing facilities and laboratories in Mumbai and Cochin.

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