News & Information From Northeast India

Tea industry urges for multiple interventions from govt for survival

With the over 170-year-old tea industry reeling under crisis, the Consultative Committee of Plantation Associations (CCPA) on August 20 appealed the ministry of industry and commerce and the Assam government for urgent intervention for the survival of the industry.

“The Indian tea industry is confronted with several challenges which are threatening the long term viability of the industry. The sector is reeling under cost pressures due to price stagnation in the backdrop of perpetually increasing the cost of production, the mismatch between demand-supply leading to oversupply, high transaction costs and fair price discovery challenges at the auctions, climate change adversities etc.” Vivek Goenka, chairman of CCPA, said.

He was addressing a press conference to reveal details of a meeting of Tea Industry stakeholders at New Delhi on August 14, convened by the ministry of commerce and industry to deliberate on the problems and possible solutions.

Goenka emphasised that restoring demand-supply equilibrium was essential for the revival of the industry and boosting exports is important for it.

Boosting domestic consumption, which at 786 gms is low compared to some other tea consuming countries, is another way to revive the industry, he said.

Among other interventions sought from the governments are reviews of the policy for expansion of Tea areas, fixation of the minimum benchmark price for Green Leaf, and auction reforms, Goenka added.

The CCPA has also sought cost optimisation through application of Social Welfare schemes of the government for resident workers and non-workers of tea estates covering medical, education, sanitation, which are currently borne by the Tea garden managements.

The CCPA has urged the state government to take over tea garden hospitals and schools and implement MNREGA scheme in tea estates for developmental work.

“Creation of a financial aid package for the tea industry providing working capital loans with interest subvention along with provision for a 2-year moratorium has been sought,” Goenka said, adding,

“The government may consider taking over of employers’ portion of contribution to provident fund for at least 3 years. This would be in line with the spirit of the Pradhan Mantri Rojgar Protsahan Yojana Scheme.”

Among other interventions sought are review of the land utilization policy, all in-kind benefits provided to tea garden workers should be included within the definition of ‘wage’ in the Code on Wages 2019, Power subsidy, expeditious disbursement of pending subsidies by tea board and extending the green climate fund for introduction of zero budget natural.

Highlighting the challenges faced by the tea industry, Goenka pointed that while tea prices have grown at around 1 percent over the last few years, cost of vital inputs like coal, gas, MOP and sulphur among others have increased at 6-7 percent during the same period.

Wages for tea garden workers increased by around 22 percent in 2018 in Assam thereby increasing the financial stress of the industry further, he added.

India produced 1339 ml kgs of tea in 2018, with Assam accounting for nearly half of it. Tea export was 256 ml kg.

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