Posted by: Sujoy Das | January 5, 2012

Tea board to relook price sharing formula

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Santanu Sanyal

KOLKATA, JAN. 4:

Tea Board of India has decided to take a fresh look at the prevailing price sharing formula which is supposed to ensure a remunerative price to small tea growers as well as a fair return to bought leaf factories. The present formula, modelled after the one at Sri Lanka, incorporated in Tea Market Control Order (TMCO) and introduced in 2004, has not yielded the desired results so far mainly to due the lack of transparency.

At a high-level meeting here on Wednesday, Mr M G V K Bhanu, Chairman of Tea Board, announced the formation of a study team to examine the relevant issues relating to the price sharing formula and publication of a report. Based on the findings of the report, unlikely to be ready before 2013 as a full season would be covered, it was indicated that the relevant provisions of the TMCO might be amended. The representatives of Indian Tea Association and Tea Association of India, among others, were also present. 

A total of seven districts, five in Assam and two in West Bengal, where the presence of small tea growers is substantial, have been identified for the purpose. The districts are Golaghat, Dibrugarh, Sonitpur, Tinsukia and Mongoldoi in Assam, and Jalpaiguri and Noth Dinajpur in West Bengal.

It might be noted that there are nearly 200,000 small tea growers in the country, accounting for more than 26 per cent of the country’s total tea production. Since they do not have processing factories of their own, they are required to supply green leaves to bought leaf factories for processing. It is complained that the factories would not often offer the remunerative prices for the green leaves supplied. The factories on the other hand complain of indifferent quality of the leaves produced by the small growers.

SRI LANKAN MODEL

One reason why the Sri Lankan model did not succeed here is that unlike India, in Sri Lanka more than 95 per cent of the tea produced is sold through auction. Thus, transparency in price realisation is guaranteed in that country.

Meanwhile, the representatives of Confederation of Indian Small Tea Growers Association (CISTA) has submitted a memorandum containing very suggestions for the development of small tea growers to the Tea Board Chairman. The suggestions include, among others, expediting the setting up of a separate directorate under Tea Board for small tea growers, launching special drive for promoting tea processing factories by primary producer societies, involving CISTA at all stages for finalisation of schemes for small growers during the 12{+t}{+h} Plan, monitoring the mechanism of quality control at the bought leaf factory level and ensuring supply of fertilisers at subsidised rates to small growers.

Inquiries with Tea Board reveal that the work on setting up the small tea growers’ directorate is progressing. The directorate will be located at Dibrugarh. A total of 95 people, mostly with technical knowledge, will be recruited for the directorate and the recruitment process is on. Hopefully, the directorate should start functioning from the next fiscal, it is indicated.

santanu@thehindu.co.in

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