Indian Tea Association holds 138th AGM: Reviews challenges faced by the Industry and propounds solutions

3 Feb 2022 , 09:57 AM

The Indian Tea Association (ITA) held its 138th Annual General Meeting under the chairmanship of Shri Vivek Goenka. In keeping with COVID safety protocols, the meeting was conducted on virtual platform. Dr. Himanta Biswa Sarma, Hon’ble Chief Minister of Assam graced the occasion as the Chief Guest. Other dignitaries present were Shri Sunil Barthwal, IAS Secretary to the Govt of India, Ministry of Labour and Employment and Dr K N Raghavan, Deputy Chairman, Tea Board of India.

Over the past two years, the 1.2 million strong workforce of the Indian Tea Industry has shown tremendous resilience in the face of the COVID-19 pandemic. Despite India’s distinguished status on the global tea map of being the largest black tea producer in the world, Indian tea remains stressed owing to factors such as fall in production of the organized tea sector, decline in exports, surge in imports, prices not compensating high cost of production etc.

Speaking to the media, Shri Vivek Goenka, Chairman, Indian Tea Association (ITA) said, “Indian tea prices after remaining stagnant for almost a decade showed some promise in 2020 due to shortfall in production. However, in 2021 average prices have declined by 6%”

Majority of teas are selling below Rs 200/- per kg which is below the cost of production of the organized sector.

Interventions like Generic promotion, incentivizing orthodox production, Auction reforms and value addition are critical for boosting domestic demand and exports.”

Shri Goenka also added, “mitigation of the high cost of production through takeover of social welfare amenities through Government schemes as envisaged in the Occupational Safety, Health and Working Conditions Code, 2020 is a necessity for the future.”

Input costs have increased at a CAGR of 9% to 12% outpacing the growth in prices.

The Darjeeling tea sector has witnessed a fall by around 50% in the last decade from 13 mkgs to 6.5 mkgs. The Darjeeling tea sector which is experiencing lower crop and lower prices over the years needs special attention.

Summary of recommendations made by the ITA

Establish floor price for tea

• To protect the long-term sustainability of the tea sector, ITA is in the process of finalizing a proposal for a Minimum Floor Price for Tea.
• The detailed proposal will be submitted to the Central Government shortly.

Boosting Domestic and Export Demand

• Enhancing the orthodox production base through incentives would enable availability of a larger volume of exportable teas. This is necessary to meet the export target of 350 million kgs by 2025.
• Generic promotion is a necessity for boosting domestic consumption.

New Labour Laws

• The Code of Wages 2019 provides that value of in-kind benefits are to be limited to 15% of the total wage. This would adversely impact the tea plantation sector as a significant component of wage of a tea garden worker comprises of in-kind benefits.
• The Occupational Safety, Health and Working Conditions Code, 2020 mandates maintenance of welfare facilities in plantations either on management’s cost or through Govt. sponsored schemes.
• Pending takeover of all welfare amenities by the State in terms of the Occupational Safety Code, full adjustment of the value of in-kind benefits provided by the managements to workers should be recognized / adjusted under the Code on Wages, 2019 while determining national minimum wage for the tea sector.

Tea (Promotion and Development) Bill 2022

• The Tea Board of India has circulated a draft Tea (Promotion and Development) Bill 2022 that will replace the age-old Tea Act to promote and develop the Tea Industry. This is an important matter which will have impact for years to come.
• The ITA has requested the Board for some time for deliberations with members and other stakeholders pursuant to which submissions will be made to Tea Board.

Sustainability

• ITA’s Sustainability cell, with its twin objective to achieve the Sustainable Developmental Goals of the United Nations as well as pursuing family friendly policies in the estates has strengthened its partnerships with eminent global NGOs. Interventions by UNICEF to improve health, hygiene, nutrition and sanitation as well as promoting child rights and protection have helped the estates to improve the quality of life of workers and their families.
• The TRINITEA program in partnership with Solidaridad has further strengthened the small holder initiative in West Bengal and Assam.  Emphasis continues to be laid on good agricultural practices and harvest of quality leaf.  ITA firmly believes that the STG sector would benefit greatly from this integrated approach.