Tea Board picks consultant to rejig price-sharing plan

Kolkata: After almost 10 years of wait and a series of appeals from the small tea growers (STGs), the Tea Board of India has decided to determine a new price-sharing formula (PSF) for green leaf sales and roped in BDO India LLP through an open tendering process for conducting a study on the same.

As per Tea Board norms, bought-leaf factories (BLF) buy green leaf from STGs in accordance with the PSF, which was introduced by the sector watchdog in 2004 and was reviewed later in September, 2013. STGs, which produce around 52% of the country’s total tea output, have been demanding a revision of the existing PSF considering rise in cost of production, inflation and lower share offered by the current formula. All STGs and BLFs in Bengal follow a 58:42 formula for green leaf trading. In Assam, STGs get 60% and BLFs 40%. Notably, around 4.6 kg green leaf is needed to prepare 1 kg of made tea (fit for drinking).

The study, including submission of the final report, to fix the new PSF with respect to all tea-growing districts of India, except Gudalur-Pandalur region of Tamil Nadu and Wayanad district of Kerala, is scheduled to be completed within a period of six months from June, 2023. Tea Board’s controller of licensing Rajanigandha Seal Naskar issued the new circular on Monday.

As per contract, BDO India LLP shall carry out field visits to gather data from farmers and factories. In this regard, the consultant team shall physically visit the state of Assam, Bengal, Tamil Nadu, Kerala and Tripura where the concentration of STGs is more for conducting primary research, including discussion with Tea Board officials, Tea Research Associations, STGs and BLF associations, all producers' associations (estate factories) as well as individual survey with growers and factories.

“The entire field survey, including collection of data through virtual interactions (for Himachal, Karnataka, Uttarakhand, Sikkim and Bihar and northeast, except Assam) shall commence tentatively from the week of June 26, 2023, and the same is proposed to be completed by August 31, 2023...,” the circular added.

Bijoygopal Chakraborty, president of STG body Cista, said: “We welcome this study. In this initiative, related cost of production should be included from the grassroot level. It is our long-pending demand. Our PSF was replicated from the benchmark Sri Lankan model and it is popular there because almost 100% of Sri Lankan tea is sold through auction. PSF will be popularised here when 100% tea produced by STGs will be sold via auction.” STG bodies such as Cista and the North Eastern Tea Association (NETA) have been urging the ministry of commerce and the Board to ensure optimal price realisation through a study, review of PSF and minimum benchmark price (MBP).