Senior officials of the Union Commerce Ministry held a meeting of the stakeholders of the tea industry, especially those pertaining to the tea auction segment and the small tea growers (STG) here.
Among the main items on the agenda was a discussion on the contentious issue of evolving a transparent pricing mechanism for the small tea growers sector, who have alleged that they do not get a fair price for their produce.
About two lakh small tea growers, who account for over 35 per cent of India’s tea crop, are dependent on bought leaf factories (BLF) and estate factories for selling the green tea leaves, as they do not have tea factories.
The vulnerability of the STG often result in middlemen and agents buying the green leaves for Rs.3 a kilo in peak season which the Confederation of Indian Small Tea Growers’ Association (CISTA) see as far below the cost of cultivation. The sector has been asking for selling the teas via auction through some pre-set formula so that a transparent process of price-discovery is available to the STG.
The Tea Board has now mandated, through an amendment of the Tea Marketing Control Order, that 70 per cent of the teas sourced from the small growers by the bought leaf segment be sold through auction. The Tea Board is trying to implement this, directing all tea manufacturers to fill in e-forms declaring their sale as well as price obtained through all the channels — auctions and private sales.
The CISTA, however, in a representation submitted at the meeting, said that this measure lacked teeth unless adequate monitoring mechanisms were put in place. Tea Board has no mechanism relating to verification of the e-forms, said Bijoy Gopal Chakraborty, CISTA President. He also wanted government intervention to ensure proper functioning of the auction system.
Aman Baid, Secretary of the North Bengal Tea Producers Welfare Association, maintained that while the BLF sector was ready to abide by the law of the land, infrastructure for handling the volume of teas through auction was lacking. “The BLF buys some 200 million kg of teas annually in cash, where is the infrastructure for handling this volume through public auctions?” he quizzed.
He also dismissed the low prices saying that average prices of green leaves bought form the STG was higher and in tune with quality.
