Separate institutions to look after tea, coffee

The government is set to form separate entities to look after the tea and coffee sectors citing the need for focused institutions amid increased export prospects of these farm products. Currently, the National Tea and Coffee Development Board (NTCDB) deals with affairs related to both tea and coffee.

“The Ministry of Agricultural Development has decided to form separate institutions to look after tea and coffee and has sought the Cabinet’s go-ahead,” said Jay Mukunda Khanal, secretary at the ministry. “However, we are yet to decide whether to form two separate boards or committees for the purpose,” he said.

Khanal said the ministry was now preparing separate policies for the development of tea and coffee. “We will hold intensive discussions with the private sector to determine the structures of these two bodies.”

The ministry said it decided to form separate organizations following a rise in export potential in recent years. “A single body might not be able to regulate the sector effectively as both the production area and exports of the products have grown immensely,” said Khanal, highlighting the need for forming separate bodies.

Tea and coffee are two of the country’s major export items. The NTCDB’s records show that exports have swollen several-fold over the last decade. In 2012-13, Nepal earned Rs 2.04 billion by exporting 10,709 tonnes of tea compared to Rs 53.9 million from 193 tonnes in 2002-03.

Similarly, coffee exports jumped to Rs 27.6 million in 2005-06 from Rs 638,000 in 1995-06. With an increase in demand abroad, the area under cultivation has also been expanding at a rapid rate. Government statistics show that the area under tea cultivation increased to 19,100 hectares in 2013-14 from 12,647 hectares in 2002-03.

Likewise, the area under coffee cultivation expanded more than five-fold to 1,765 hectares in 2013-14 from 314 hectares in 2000.

The government established the NTCDB in 1993 with the aim of promoting these two farm products. Currently, the board, which has a staff of 97, has been monitoring the sector through two regional offices in Birtamod, Jhapa and Pokhara.

According to tea entrepreneurs, around 30 percent of the output is consumed locally while the remaining is exported.

Of the total shipments, CTC tea is mostly exported to India while the higher quality orthodox tea is exported to third countries.

Similarly, 56 percent of the coffee produced in Nepal is sold abroad. The main buyers are South Korea, Japan, Germany, the US, Taiwan and a number of European countries. As per coffee entrepreneurs, demand amounts to more than 1,000 tonnes while production is less than 400 tonnes.

- Courtesy of Kantipur Business