ECONOMIC IMPORTANCE OF THE PLANTATION SECTOR IN KERALA pdf

CHAPTER IV ECONOMIC IMPORTANCE OF THE PLANTATION SECTOR I N KERALA With nearly half the plantation area in the country and a major interest in all the four crops-tea, coffee, rubber and

CHAPTER IV

PLANTATION SECTOR IN KERALA

CHAPTER IV

ECONOMIC IMPORTANCE OF THE PLANTATION SECTOR I N KERALA

With nearly half the plantation area in the country and a major interest

in all the four crops-tea, coffee, rubber and cardamom-Kerala is undoubtedly India's most important plantation state.' These plantations ensure

a better return to growers, higher revenue to the Govenunent, improved income

to workers and above all the overall development of the Kerala economy Arnong the various categories under the non-food grain sector, plantation crops have recorded the maximum growth in area during the period 1976-'77 to 1995-'96 as revealed by the enormous increase in their area index from 95.04

to 181.26.' Plantations are ago-industrial undertakings regularly employing a large number of workers and are mainly concerned with production for comnercial purposes With one third of Kerala's State Domestic Product (SDP) coming from the agricultural sector, the role of plantation crops in its

;rgricultural economy may be viewed in ternls of

(i) share in cultivated area;

(ii) contribution to state agricultural income;

(iii) share of foreign exchange earnings;

(iv) contribution to the state's tax revenue; and

(v) employment potential

I IJPASI, The Plarrtr~s' ('hrotiicle (Coonoor AugustISeptember 1992) p.362

2 UPASI, Plarller :s /);rectory (Coonoor, September 1996) p 1

F'lpre 4 I Kerala-The Important State in the Plantation Map of India

Source: UPASI

4.1 Share in Cultivated Area

Kerala accounts for about 4 6 per cent of the total area under plantations

in ~ n d i a ~ The crop-wise break up in terms of area and production is shown in Table 4.1

Table 4.1

Place of Kerala in India's Plantation Map (1995-'96)

Type of Area (Hectares) Production (Tonnes)

Tea 34,656 4,30,888 64,794 7,49,888

Rubber 4,43,300 5,15,572 4.76,495 5,06,910

Source: (a) State Planning Board, Government of Kerala, Thiruvananthapuram

(b) Directorate of Economics and Statistics, Thiruvananthapuram

It is evident from the table that rubber cultivation in Kerala forms b5.98 per cent of the total area under rubber in the country Kerala's rubber production is

94 per cent of the total rubber production in India Cardamom also occupies a prominent place in the matter of area and production Kerala accounts for 5 1.76 per cent of the area and 6 6 per cent of the production of cardamom in the country

Based on Table 4.1, Figures 4.2 and 4.3 give a diagrammatic representation of the area and production of plantation crops in Kerala respectively

3 Economic Review, op cit., 1997, p 48

Figure 4 2 Area Under Plantation Crops in India and Kerala (1995-'96)

Type of crop

Source: Table 4.1

Figure 3.3 Production of Plantation Crops in India and Kerala (1995-'96)

Kerala

Tea Coffee Rubber Cardamom

Type of crop

Source: Table 4.1

4.1.1 Share in Net Cultivated Area

Plantation crops account for about 27 per cent of the net cultivated area

in eral la.^ The details are shown in Table 4.2

Table 4.2

Area under plantation crops vis-a-vis total cultivated area

in Kerala (area in '000 hect.)

Plantations Cultivated Tea Coffee Rubber Cardamom m Kerala area in Kerala

Source: Directorate of Economics and Statistics, Thi~vananthapuram

Figure 4.4 shows the area under plantation crops during the period 1990-'91 to 1995-'96

F~gure X -I Area Under Plantution Crops - in Kerala (1990-'91 tg 1995'94)

-

Type of Crop

Source: Table 4.2

Among the four crops, lubber accounts for the largest share in the net cultivated area in Kerala

4.2 Contribution to State Agricultural Income

The State's Income fiom all the sectors in 1995-'96 is Rs 7,018 crores The contribution of agricultural sector to the state income is Rs 2,365 crores The plantation crops account for Rs 723.69 ~ r o r e s ~

Table 4.3 shows the share of tea, coffee, rubber and cardamom in State Agricultural Income

Source: UPASI Coonoor

Crop-wise, rubber accounts for 18.7 per cent followed by tea (6.4

per cent), coffee (3 per cent) and cardamom (2.5 per cent) in the agricultural income of the state Figure 4.5 provides a diagrammatic illus!~%tion of Table 4.3

5 Ibid., compliled from various tables

Figure 4.5 Share of Plantations in State Agricultural Income (1995-'96)

Type of crop

Source: Table 4.3

4.3 Share of Foreign Exchange Earnings

All the plantation crops, except rubber, earn remarkable foreign exchange Rubber, on the other hand, is an important import substitute State's export earnings from different crops are shown in Table 4.4

Table 4.4

Contribution of Plantation Crops to the State's Foreign Exchange

Earnings (1991-'92 to 1995-'96)

Year Quantity Value (Rs Quantity Value(in Quantity Value

(Tomes) lakhs) (Tomes) Rs lakhs) (Tomes) (Rs

l u )

Source: (a) Tea Board, Calcutta

(b) Coffee Board, Bangalore

(c) Spices Board, Kochi

Refer Figure 4.6 for a diagrammatic representation of the contribution of plantation crops to the foreign exchange earnings of the state in 1995.96

r e 6 Contribution qf Plantation Crops to the Foreign Exclrunge

4.4 Contribution to the State's Tax Revenue

Contribution of plantation crops to the state's tax revenue is an important indicator of the economic significance of this sector

Table 4.5 shows the details of the Centre-State break up of the various taxes from the Plantation sector to the State Govenunent I

,A varlety of taxes ;inti duties to the Central and State Ciovcrnlnents are being paid by the plantation sector The Central Sales Tax is levied under the Central Act and collected by the State Government The entire amount comes

to the State Treasury A portion of the Central Income Tax and Excise duty also goes to the State Revenue The most important areas of taxation of Kerala Government are (i) State Sales T d P u r c h a s e Tax (ii) Agricultural Income Tax and (iii) Plantation Tax

Table 4.5

Duties and Taxes Paid by Plantations

1 Central income tax 1 Agricultural income tax

2 Cess under Commodity Acts 2 Land tax

3 Excise duty 3 Plantation tax

4 Central sales tax 4 State sales tax/Purchase tax

5 Factory license fee 5 Building tax

6 Land cess

7 Machinery license fee

8 Professional tax

9 Service tax Source: (a) Directorate of Economics and Statistics, op cit

(b) UPASI, op cil

4.5 Employment in the Pla~itation Sector

A striking characteristic of plantation agriculture is that it is labour intensive The four crops account for about 21 per cent of the agricultural employment in the state.' Table 4.6 shows that plantations in Kerala provide permanent employment to over 3.6 lakh workers throughout the year.7

Table 4.6 Average daily employment in plantations in Kerala

Fibures in parenthesis indicate the percentage of workers in each plantation

Based on this table, Figure 4.7 shows the percentage of average daily employment in the four crops

6 PInn!er 's 1)irector): 011 ci!., 7

7 Ibid

I*'/gzrre 4.7 Average Dailq' l?mployment in Plantations in Kerala (1995-'96)

23.00%

64.00%

Source Table 4.6

In Kerala, rubber plantations employ the largest number of workers followed by tea, coffee and cardaniom

4.6 Plantation Crops in Kerala's Economy

A study of the relative share of plantations in terms of the net cultivated area, state domestic product, foreign exchange earnings to the country, tax revenue and employment potential reveals the importance of this sector in Kerala Table 4.7 shows the sibpificance of this sector to the state's economy

Table 4.7 Plantation Crops in Kerala's Economy (1995-'96)

Type of Share in net Share in agric- Share in Share in

cultivated area ultural SDP country's

export earnings (Percentage)

Source (a) UPASI, op ci/

(b) Directorate of Economic and Statistics, op crl

Though export ea~nings from rubber is nil, its importance in our economy is evident from the share it occupies in net cultivated area, in agricultural SDP and in employment generation Export earnings to the country are the largest from cardamom, i.e., 80 per cent Coffee comes next to cardamom (13.2 per cent) Though the share of tea in net cultivated area is only 1.9 per cent, it contributes substantially to agricultural SDP (6.4 per cent), export earnings (6.9 per cent) and employment (4.6 per cent)

4.7 Growth of Plantations in Kerala

Tables 4.8, 4.9, 4.10 and 4.11 give details about the growth of tea, coffee, rubber and cardamom in telms of area and production in Kerala

Table 4.8 and Figure 4.8 provide statistics relating to the area and production of tea plantations in Kerala during the period 1950-1996

70

Growth of Tea Plantations in Kerala (1950-1996)

Source: Computed from the data published by

( I ) Hutidbook ofl'lru~la~ion I.uct.s, UPASI, Coonoor, 1990

( 2 ) Tea Board, Calcutta

Figure 4.8 Growth of Tea Plantations in Kmala (Area and Production)

It is evident that area under tea remains more or less static but output has increased during the same period

The growth of coffee plantations in Kerala is shown in Table 4.9 The same is shown diagramatically in Figure 4.9

Table 4.9

Growth of Coffee Plantations in Kerala (1950-1996) ,

Year Area ('000 Hectares) Production (Tonnes)

- ~ ~ - ~ ~~ -~

Source: Computed from the data published by

(a) Handbook of Plantat~on Facts, op cit

(b) Coffee Board, Bangalore

Figure 4.9 Growth of Coffee Plantations in Kerala (Area and Production)

(1 950-1 995)

Year

Source: Table 4.9

It is clear from the table and figure, that on the whole, area under coffee and output of coffee are on an increase in Kerala during the period 1950-1996,

though there are slight variations

Table 4.10 gives the iuea and production figures relating to rubber in Kerala during the period 1955'-'56 to 1995-'96

Table 4.10 Growth of Rubber Plantations in Kerala (1955-'56 to 1995-'96)

Year Area ('000 Hectares) Production ( T o m )

Source: Computed fiom the data published by

(a) Handbook ofPlantatron Facts, op cit

(b) Rubber Board, Kottaym

Area under rubber plantation has shown a tremendous increase from 78,457 hectares in 1955-'56 to 4,43,300 hectares in 1995-'96 resulting in an increase of 465 per cent Production also has increased from 21,680 tomes in

1955-'56 to 4,76,495 tomes in 1995-'96 leading to 2,098 per cent increase in output during the period

Figure 4.10 also presents the growth of area and production of rubber in

The growth of cardamom plantations in Kerala from 1960-'61 to 1995-'96 is shown in Table 4.1 1

Table 4.11 Growth of Cardamom Plantations in Kerala (1960-'61 to 1995'96)

Source: Computed from the data published by

(a) Ha?idhook of l'ltrtrlation Facts, op cit

(b) Spices Board, Kochi

It is clear from the table that area under cardamom cultivation has been increasing till 1988-'89 after which a decrease in area is taking place There are irregular variations in production figures also during the period 1960-'61 to 1995-'96 Figure 4.11 also reveals this

figure 4 11 Growth of Cardamom Plantations in Keralu

4.8 Small Growers in the Plantation Sector

There is predominance of small growers in the plantation sector Table 4.12 reveals the share of small growers in the production of plantation crops in South India

Table 4.12 Small Growers' Share in the Production of Plantation Crops

in South India (1995-'96)

-

No of small Total production Produrnon of Produdon of Crop

growers from South small growers small growers to

(Tomes) (Tomes) total (per cent)

Coffee 1,30,000 2,00,000 1,20,000 60.0 Rubber 8,00,000 5,07,000 4,05,600 80.0

Source: UPASI, op cit,

In cardamom and rubber, small growers predominate the production,

90 per cent and 80 per cent respectively Sixty per cent of the output of coffee

is contributed by small growers There is the predominance of large holdings in tea and hence share of production of small growers is only 22 per cent

Refer Figure 4.12 for a diagrammatic representation of the details shown

in Table 4.12

figure -1 I2 Share of Smull Growers in the Production of Pluntation Crops

in South India (1995-'96)

Tea Coffee Rubber Cardamom

Type of crop

Source: Table 4.12,

XO

4.9 Tea

Tea is of greater significance to Kerala because of the high land productivity, relative to other crops, export earnings and employment in rural and backward areas

4.9.1 Area

Among all the tea producing countries of the world, India has the largest acreage under the crop Major tea growing regions are located in Assam and West Bengal in North India and Tamil Nadu and Kerala in South India The total area under the crop is 4,30,888 hectares of which South India accounts for 85,100 hectares which constitutes 20 per cent.' In South India tea is mainly grown in Nilgiris, Anamallais, Kaman Devan Hills and over the slopes of mountains stretching down to the plains of Kerala Table 4.13 shows the State-wise distribution of tea planted areas in the South

Table 4.13 Tea Plantation Areas in the South (in hectares) (1995'96)

Tamil Nadu

Kerala

Karnataka

Source: UPASI, op cit

Fi y e 4.13 provides a visual presentation of the details in Table 4.13

8 Ibid., p.1

Figure 4.13 Tea Plantation Areas in South India (1995-'96)

Kerala Karnataka ~ a r n i l Nadu

Source: Table 4.13

Both the table and the figure show clearly that, of the three South Indian states, tea is concentrated in Tamil Nadu followed by Kerala and Kamataka

Between 1950 and 199:j, tea acreage went up by 5.5 per cent in Kerala, that is, fiom 32,849 hectares to 34,656 hectares

Between 1950 and 1995, there was an increase in yield from

900 to 1880 kg/hectare.'" In spite of the marked improvement in productivity in Kerala, it is still substantially lower than that in Tamil Nadu Partly this could

be attributed to agronomical factors such as soil erosion, heavy monsoon, periodic drought and frost

4.9.4 Structure of Tea Plantations

Most of the tea plantations in Kerala are in Idukki district Cultivation of tea is carried on by large and small growers

Although there are thousands of tea estates in India with a number of small growers, over the years tea plantations have emerged as a corporatised activity

-

9 Ibid

10 Ibid p 3

As a result, Kerala's share in the country's total coffee area has gone up from

The share of Kerda in the country's total coffee production is 20.2 per