The Hindu Business Line : Pep-up package soon for tea

THE Union Government proposes a package of measures to bolster the declining tea prices at major auction centres, following a recent consultative meeting that the Commerce Secretary, Mr Dipak Chatterjee, held with representatives and producers of the domestic tea industry.

An official release said here that in the wake of steep fall in prices of the tea in recent years, the meeting addressed a number of problems currently affecting the tea sector and broadly agreed upon a plan of action to improve the lot of the industry in the coming days.

The meeting reviewed the extant measures by the Government for the salubrious growth of the tea industry which cover steps as the exemption granted under Section 33 AB of the Income Tax Act for the developmental activities of the plantations, freedom and flexibility available to the producers to sell their produce at the auction centres or through private sales, grant of export-specific financial spurs to arrest the decline in the export of tea and measures relating to increased domestic consumption of tea in an extremely competitive market.

In spite of these measures, the overall tea price situation in important auction centres as Guwahati, Kolkata and Coonoor has not been encouraging. Hence the meeting underscored the need for revamping the auction system taking into account the balanced interests of the producers, buyers and brokers. The efficacy of the present auction system as a fair price discovery mechanism in the light of a Tea Board-sponsored study by A.F. Ferguson was discussed the industry agreed that certain crucial changes need to be made in the existing system to ensure transparency in transactions so that interests of the various stakeholders are duly safeguarded.

As one of the reasons to the fall in price of tea being pertaining to the issue of quality, the Commerce Secretary urged upon the industry to make all-out efforts to upgrade the quality of Indian tea and assured all assistance from the Centre in this regard.

Considering the significantly large role that the small tea growers and the bought leaf factories had come to play in both North and South India, it was decided that their activities should be streamlined to be integrated with the organised sector and their problems tackled to ensure production of quality tea. The meeting was of the view that such an approach and strategy would help in the improvement of the prices of tea in the auction centres as well as outside the system.

The Commerce Secretary also stressed that though all support and assistance would be made available through the Tea Board, it is the industry which must tackle various initiatives to make the medium-term export strategy for tea prepared by the Accenture, the leading global consultant and achieve higher levels of export performance, including increased unit value realisation.

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