In line with the relief package for tea growers announced in the Interim Budget, Commerce Minister Arun Jaitley on Friday sought a three-point package including two per cent reduction in interest rate on Special Coffee Term Loans.
In a letter to Finance Minister Jaswant Singh, Jaitley suggested reduction in interest rate of SCLT from 11 per cent to nine per cent as part of steps to enable small growers overcome crisis in the wake of severe drought in a major coffee growing state of Karnataka.
Jaitley also suggested deferment of interest payment on SCLT from the current year, which could be collected over the next three years.
He also suggested conversion of coffee loans into External Commercial Borrowings as 80 per cent of coffee produce was exported. This would help in reducing the interest burden of the growers, he said.
The minister said he was making the suggestions as the plantation sector was facing severe difficulties affecting small growers of both tea and coffee.
The government had provided Rs 8 per kg subsidy to small tea growers in the Interim Budget and had announced a special tea term loan, repayable in five years with a one year moratorium to revive this ailing sector.
Jaitley pointed out that a similar relief package should be provided immediately to help the small coffee growers tide over their difficulties arising out of severe drought in the state.