Saturday, June 6

Tea board eyes e-auction of entire Darjeeling produce

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The Tea Board of India will meet the producers of Darjeeling tea to propose 100% mandatory sales of the iconic brew via auction, which, according to it, would make each gram of the India’s first Geographical Indication (GI)-tagged product count in terms of traceability or authenticity and real price realisation.

Tea Board deputy chairman Arun Kumar Ray on Wednesday said: “There is a need to intervene for proper logo administration through 100% e-sales. Post-Diwali, we shall meet the Darjeeling Tea Association (DTA) – which controls its 66 member gardens in the Hills – so that the full value of the GI tag is exploited via fair price realisation…we would like to ensure this to happen.”

Reacting to the proposal, Binod Mohan, chairman, DTA, told TOI: “Practically speaking, this may result in price crash of Hills tea and most of the members may not agree with this proposal. But, before making a comment, we need to see the modalities in detail. The meeting is crucial.”

Currently, just 3-3.5 million kg (mkg) – less than 50% of total 8 mkg Hills tea produced in a year across 87 gardens – is put on the block and over 2 mkg produced in a neighbouring country is unlawfully imported and mixed to be passed on as Darjeeling tea, said a Board official. The Tea (Marketing) Control Order (TMCO) stipulates that 50% of the crop must be routed through the auctions, though it is 100% in Sri Lanka.

“However, an amendment of TMCO is not necessary to change the rule. Only a commerce ministry nod to this new proposal is required here,” said Tea Board controller of licensing Rajnigandha Seal Naskar. “If strictly implemented, this will practically end the era of private sales of tea.”

The Tea Board deputy chairman rued the fact that Darjeeling tea on average fetches a lesser price ($3-3.5/kg) than that ($4-5 a kg) of Sri Lanka.

On the probable furore against this proposal, Ray added that quite a few Darjeeling garden owners – almost 40% – are open to the new idea.

“Some doubts about the functioning of the system have been raised by Indian Tea Association (ITA), which has 18 member estates in Darjeeling. In fact, ITA has sent a letter to us about this,” he said.

On whether enforcing all the Hills gardens to go for 100% sales via auction would satisfy an open market economy, the Tea Board deputy chairman said: “There is a feeling in the Central government that the dues of the labourers are not being paid properly despite the good value realisation of Darjeeling tea. Here the problem is that only 10 owners run 87 Darjeeling gardens undercutting each other. We want to make their business remunerative.”

Hills tea planters blamed it on last year’s 104-day strike along with erratic weather, manpower fall and low subsidy.

However, Ray reasoned, “It is question of transparency. It appears that despite selling tea at Rs 2000 a kg, you are unable to offer a 20% bonus. In Assam, producers have paid 18.5% bonus, but they could fetch just one-third of the prices sold by the Darjeeling tea planters.”

On whether this will end the private sales regime, the Tea Board top official clarified that a producer can buy back his own tea and then re-sell it to a particular buyer on one-on-one basis via negotiation. “However, there will be a little chance of undervaluing own tea in the auction,” he said.

Meanwhile, the board has made arrangements with ICICI Bank for providing 45-day credit to the buyers and also to facilitate bill discount to tide over the liquidity crunch and payment defaults.


Source: Times of India

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