Small tea growers urge Centre to introduce price protection scheme

Guwahati, July 12: Underlining the persistent challenges, including poor price realization, unregulated market intermediaries, and limited policy safeguards, faced by small tea growers, the Confederation of Indian Small Tea Growers Associations (CISTA) has moved the Commerce Minister Piyush Goyal seeking introduction of a price protection scheme.

The flawed price sharing formula (PSF) has failed to ensure fair and transparent price realization for small tea gardens (STG), the apex body of small growers associations of 12 states said, advocating a comprehensive study to determine an equitable price-sharing ratio between factories and STGs.

The confederation sought replacement of the concept of minimum benchmark price (MBP) with a pricing mechanism linked to the total sales value (auction and private sales), ensuring that growers receive a fair and remunerative price.

It also demanded adoption of the Sri Lanka model wherein surplus earnings over auction averages are shared equally between factories and growers, incentivizing quality leaf production.

“The Tea Board must establish a robust regulatory framework to ensure transparent data sharing from factories, besides monitoring and registration of leaf agents,” it said.

It said that following the initiative directing cent per cent auction of dust teas, the proportion of dust-grade teas offered through auctions increased from 41 per cent to 45 per cent of total production post-notification.

“The average price payable by factories to small tea growers (as per the PSF) rose from 17.59 per kg to 23.67 per kg, reflecting a significant increase of Rs 6. These early outcomes signal a positive shift in market dynamics-improved transparency, fairer pricing mechanisms, and a stronger institutional framework for PSF implementation,” the confederation said in the memorandum.

President of the confederation Bijoy Gopal Chakraborty said while the present PSF is modelled on the Sri Lankan system, there is limited monitoring or enforcement in India, allowing persistent non-compliance by many bought leaf factories (BLF).

“Several factors continue to erode STG confidence in the PSF mechanism like rising input costs which are not reflected in the green leaf price, seasonal price fluctuations that are not aligned with consistent production costs, lack of factory-wise realisation data which prevents accurate price calculation, non-compliance by BLFs with mandated auction sale percentages and non-transparent private sales, making it difficult to verify actual sale realisations,” the organisation said.

A well-designed price protection scheme will not only ensure fair and stable prices but also catalyze a shift towards direct market access, higher quality compliance, and sustainable income generation, it said.