Tea industry lost in new budget proposal
The tea industry is facing uncertain times in the wake of the new budget proposal to limit the estates to 5000 acres per company that caught the sector by surprise.
Issues like the fact that the Regional Plantation Companies (RPCs) have entered into a 55-year lease agreement with the government and how this could be re-done with this kind of budget proposal to limit the acreage on the estates, are confronting plantations with no proper response from the authorities.
Another question that has come up for discussion is the concern on how these listed companies could be asked to change their structure if this proposal should be enacted.
A pressing problem is how the companies would be able to pay off the loans already taken against the estates for the development of these and whether the government is ready to pay off the net current asset value of the estates already developed.
In this regard, the industry stakeholders have met with some government higher ups to address some of their concerns on the running of the estates under the current situation on matters like the weedicide ban and other problems.
However, the government has only stated that they would discuss this problematic proposal on restricting acreage later and had in effect ‘passed the ball’.
The government also seems to be dilly dallying with the issue as the companies have not been able to obtain any clarity on the matter.
In fact the Plantation Ministry said they were unaware of the modalities of the budget proposal as it was still at that stage and no information was made available to them on how this could be implemented.