GOVERNMENT PLANS A PACKAGE OF MEASURES TO BOLSTER THE PRICES OF
TEA AT AUCTION CENTRES
The government plans a package of measures to
bolster the prices of tea at auction centres. This emerged from
a high-level meeting chaired by Shri Dipak Chatterjee, Commerce
Secretary, here on May 28 with leading representatives of the
tea industry as well as representatives of the major tea producing
States of Assam, West Bengal and Tamil Nadu in the context of
the problems faced by the tea industry due to steep fall in prices
of the commodity 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 fortunes of the industry
in the coming days.
The meeting reviewed the measures already taken
by the Government for the healthy growth of the tea industry,
which include measures like the exemption granted under Section
33AB of the Central 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 incentives to arrest
the decline in the export of tea and measures relating to increased
domestic consumption of tea in an extremely competitive market.
Since despite these measures the overall tea
price situation in important auction centres like Guwahati, Calcutta
and Coonoor has not been encouraging, the meeting was of the view
that there is the need for revamping the auction system taking
into account the balanced interests of the producers, the buyers
and the brokers. The efficacy of the present auction system as
a fair price discovery mechanism in the light of a Tea Board sponsored
study by M/s A. F. Ferguson was discussed and the industry agreed
that certain crucial changes need to be made in the present system
to ensure transparency in transactions so that interests of the
various stakeholders are duly protected.
One of the reasons attributed to the fall in
prices of tea being related to the issue of quality, Commerce
Secretary urged upon the industry to make all out efforts to upgrade
the quality of Indian tea and assured all assistance from the
Government in this regard. Considering the enormous role that
the small tea growers and the bought leaf factories have 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 automatically help in the improvement of the prices of tea
in the auction centres as well as outside the system.
In view of the decline in tea exports in recent
years, the Government had appointed M/s Accenture, the leading
international consultant, to prepare a medium term export strategy.
The Tea Board in close collaboration with the industry has already
taken up implementation of the recommendations contained in the
Report submitted by the consultant. Commerce Secretary emphasised
that though all support and assistance will be made available
through the Tea Board, it is the industry which has to take various
initiatives to make the strategy a success and achieve higher
levels of export performance, including increased unit-value realisation.
The industry assured the Government of its wholehearted
involvement and support for the success of the various measures
initiated by the Government and doing their best to ensure reasonable
prices to the producers within the overall scheme of market forces.
