The Consultative Committee of Plantation Associations (CCPA) today said that the tea industry, which is in deep crisis at present, is in need of fresh funding to meet ‘developmental expenses,’ including tea workers’ welfare. CCPA officials, including office bearers of its four constituents–Indian Tea Association (ITA), Tea Association of India ( TAI), Terai Indian Planters’ Association (TIPA) and Indian Tea Planters’ Association (ITPA)–held a meeting here and reviewed the present situation of tea plantations and the industry as a whole.
Addressing reporters, vicechairperson the ITA, Nayantara Pal Chowdhury, said: “Sustainability is in question due to the severe cost pressure, high cost of production, and tea price stagnancy over the past few years and finally mismatch of demand and supply.”
CCPA secretary general Arijit Raha briefed the media on how the tea industry has been facing a crisis due to oversupply in the global tea production.
“Oversupply is one of the factors adversely impacting tea prices globally,” Mr Raha said, adding, “Increase in production contributed by Small Tea Growers (STG) is accounting for almost 50 per cent of production in India.”
According to him, the total production in 2018 was 1338 million kgm but the export was only 249 million kg, and the auction price was Rs 138 per kg. The CCPA officials also claimed that in the whole of India the auction price was Rs 130.91 per kg in 2014 and Rs 138.83 per kg in 2018.
In West Bengal, the auction price was Rs 129.98 per kg in 2014 and Rs 139.75 in 2018. Comparatively, the rate of increase was better for Darjeeling tea. It was Rs 294.46 per kg in 2014 and Rs 452.16 per kg in 2018.
CCPA officials claimed that sustainable prices and profits are imperative for enabling investments and long-term viability of the industry, given the increasing demand for tea below Rs 150 range, which is much below the cost of production of the Registered Tea Garden (RTG). According to them, a majority of the tea sold in auctions do not cover the cost of production.
Notably, the spurt in Small Tea Growers (STG) production came during 2014-2018 when their production increased by 223 million kg, an increase of 56 percent. The Estate Factory Crop has declined by over 100 million kg–a decline by 13 per cent. At present, the contribution of STG to Indian production is close to 50 percent, it is learnt.
As a result, planters admitted that one of the challenges of the industry was dual economic structure between RTG and STG.
CCPA officials concluded that the tea industry was in need of fresh funding to meet developmental expenses, including workers’ welfare, creation of a financial aid package providing working capital loans with interest subvention, along with provision for a two-year moratorium.
Significantly, plantation associations have sought relief from the government and asked it to bear the employers’ portion of the contribution to provident fund for a period of at least three years.