Tea producers seek soft loans

HIMALAYAN NEWS SERVICE

KATHMANDU: Tea producers have asked the central bank to help protect the Nepali tea sector.

“The tea sector is hit hard by the high interest charged by banks and financial institutions,” Himalayan Orthodox Tea Producers Association’s president Uday Chapagain

told the central bank governor Dr Yubaraj Khatiwada today.

Unlike other sectors, the tea sector requires 80 per cent investment on labour, is a traditional agro-based sector and weather dependent produce, he said, adding they want soft loans at seven per cent interest which is a must to sustain the industry in the long run.

Apart from the lower interest rate, the tea producers also asked for simplified procedure to get cash incentives. “We want the cash incentives based on total exports earnings in foreign currency,” said Nepal Tea Producers Association president Binay Goel.

Both the associations apprised the governor of the problems and challenges the tea producers are currently facing. “We also need Indian currency to import machinery from India,” they said, adding that the central bank should introduce a policy that will facilitate them in exchanging some of the foreign currency they earn to Indian currency.

Answering the delegation, the governor said that the government is planning to bring a package for tea producers as it is one of the products that has competitive advantages. “But the government is discussing on whether to provide them incentives or subsidy,” he said, adding that the government has given priority to the agriculture sector.

However, the government cannot provide subsidy to all and is thus thinking of risk minimisation to give agro products a more competitive edge, said Khatiwada, adding the central bank recently brought interest serving period in line with crop cycle. “Similarly, from the next fiscal year, the interest rate will also come down,” the governor added.

Central bank data shows Nepal exported tea worth Rs 172.8 million to third countries in first eight months of current fiscal year.