The Hindu Business Line : Coffee bonds soon to settle trade debt

THE Union Ministry of Commerce is mulls floating of long-term Government guaranteed bonds to raise funds for liquidating the liabilities of the coffee and tea industries.

This was announced by Mr L.V. Saptarishi, Additional Secretary, Union Commerce Ministry, at the 39th annual general meeting of Tea Association of India (TAI).

According to him, the money will be raised by the individual commodity boards and thereafter given to the industry.

The tenure of the bonds would in the range of five to seven years.

Mr Saptarishi estimated Rs 500 crore as the total long-term liability of these two industries. Initial discussions with the Reserve Bank of India have already been carried out.

``The concept of bonds has been mooted because the industry needs money and the government wants to help them in raising it'', Mr Saptarishi told reporters after the meeting.

In his address, he touched upon a number of key issues, including the burden of social cost borne by tea producers.

He asked entrepreneurs to start talks with the State Governments and local bodies, as the panchayats, to share some of their expenses.

The Union Government, he said, was eager to reduce the burden, but for this cooperation of the State Governments and amendments in the existing Plantation Act were necessary.

The Government has also decided to shift all six tea auction centres into the electronic mode of operation by December 2003. The total project cost would be Rs 15 crore and much of it would be borne by the Government.

Meanwhile, the Union Commerce Ministry has requested NABARD to route money from their Rural Infrastructure Development Fund (RIDF) through the Tea Board for development of the road network in tea producing districts.

Currently, the Tea Board has a similar corpus for infrastructure development the performance of which was ``good''. If NABARD agreed to this proposal, the money would be added to the existing Tea Board corpus.

In another development, the Union Government is contemplating to introduce an incentive scheme for the tea exporters who meet their export targets set at the beginning of the year. The idea was suggested by the TAI members. Tea Board has been asked to work out the scheme.

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