Small tea growers urge proper implementation of price-sharing formula

The Federation of Small Indian Tea Growers (CISTA) has urged the Ministry of Commerce to expand the Small Tea Growers (STG) benefits available to small farmers who grow other crops. He also urged the ministry to help ensure the optimal price is achieved for STG categories through the proper implementation of the price-sharing formula.

Bijoy Gopal Chakraborty, Chairman of CISTA, said in a letter to the Commerce Minister that the lack of access to schemes available to other small farmers, coupled with sub-optimal price realization, may prompt STG to abandon tea cultivation, affecting supply.

Highlighting the challenges involved, he said that STG has limited negotiating power due to its small land holdings and productivity. Moreover, they have limited access to the financing needed to build the infrastructure for processing, storage, and value addition, among other things.

There are approximately 2.4 thousand liters in India producing over 691 million kg of tea from more than 2 hectares across Assam, West Bengal, Tamil Nadu and Kerala; They account for approximately 54 percent of the country’s tea production.

The most serious problem is price distortion by brokers. The Indian Tea Board ordered that the tea mills share the proceeds on the basis of an average auction price in a ratio of 65:35, whereby 65 percent of the proceeds are to be shared with the growers and the remaining 35 percent with the mills; However, due to various shortcomings in monitoring and implementation, it leads to suboptimal realization of small tea growers,” Chakraborty said in the letter.

The Tea Board called for a study to find the optimal price-sharing ratio. A monitoring system is needed to ensure data is shared by factories to set prices, and partitioned between factories and farmers.

There is a need to strengthen extension services to guide farmers in adopting good agricultural and processing practices.