GOVERNMENT PLANS A PACKAGE OF MEASURES TO BOLSTER THE PRICES OF TEA AT AUCTION CENTRES
Date : 03 Jun 2002
Location : New Delhi
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.