The country’s small tea growers, who contribute almost 54 per cent to the crop production of the country, are grappling with low green leaf price realization and a lack in fair price compensation to them, prompting them to urge the Centre to intervene.
The Confederation of Indian Small Tea Growers Association (CISTA), in its letter to the Union Minister of Commerce and Industry, Piyush Goyal, has asked that the Centre set up a fair and transparent price discovery mechanism on the lines of the minimum support price (MSP) in place for other crops.
CISTA president, Bijoy Gopal Chakraborty, said small tea growers are facing the persistent challenge of poor price realisation when selling leaves to factories, which is undermining the 200-year-old sector’s sustainability.
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Chakraborty added that the association had already submitted a detailed status paper to the commerce ministry in May 2023, which outlined the structural bottlenecks faced by the sector.
The concept of minimum benchmark price should be replaced by a new methodology linked to the total sales value so that growers receive a fair and remunerative price, he said.
Citing the Sri Lankan model, under which surplus earnings over auction averages are shared equally between factories and growers, Chakraborty said the Tea Board should undertake a detailed study to determine an equitable price-sharing ratio between small growers and factories.
Proposing a price protection scheme for small growers, CISTA stated that the average green leaf price currently ranges between ₹22 to ₹25 per kg, while the cost of production is hovering between ₹17 and ₹20 per kg.
The yield on a modest margin is ₹5 per kg for the growers, while agents typically charge ₹2 per kg.
The small tea growers body said it is a big disincentive, and that growers should be able to sell directly to factories to rid the sector of its chronic price realisation challenges.
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