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Kohinoor Mandal

TO say that all is not brewing well for the Indian tea industry would be an understatement.

Briefly, during the last few years, the industry had been suffering from all sorts of problems be it falling prices, stagnant demand or a shrinking export market. Above all these, perennial problems such as high-cost labour, competition from cola majors, high interest rates and low output continue to disturb the industry as the late night spasms of a rheumatic.

The annual statistics available from the Indian Tea Association clearly portray that all is not well for the tea industry. In 2002, total production was 826.2 million kg, down by 27.5 per cent compared to 853.7 mkg in 2001. The average auction prices were Rs 55.42 per kg. Again it is down by 6.24 per cent compared to the average price of Rs 61.66 per kg in 2001.

The fall in global production, which could cause demand to increase, hardly cheered the spirits of the Indian tea producers. As a panacea, the Union Ministry of Commerce introduced the Tea Marketing Control Order 2003 (TMCO). The new rules were supposed to plug the loopholes of the existing auction system. It was supposed to ensure that the producers get a remunerative price of their teas. TMCO was, however, greeted by wide-scale protests by buyers from all sections of the trade. According to them, TMCO infringes on their basic and fundamental rights. They felt that they would lose their business secrecy to a large extent under the mandatory disclosures norms as prescribed by the TMCO. They were furious of the search and seizure clause mentioned in the new set rules. Top officials of Union Commerce Ministry felt the heat but they were not willing to bow under pressure. Mr Prabir Sengupta, Union Commerce Secretary, categorically told Business Line that buyers could not survive without the survival of the tea producers. The matter did not end with arguments and counter-arguments. It referred to the courts of laws. Several petitions were filed and currently all of them, barring one in Gujarat High Court, have been transferred to the Supreme Court.

The only good thing is that the trade is operating even as confusion prevails as to which set of rules to follow. It may not be smooth. Price may still not be remunerative for producers. Buyers may not be happy with regulations. But tea is moving out from the gardens to retailers through the auction houses.

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