Chandra Kumar Dhanuka (centre) at an event to launch his book titled ‘Minimum Floor Price for Tea’ in Guwahati on Wednesday (August 14, 2024).
| Photo Credit: SPECIAL ARRANGEMENT
GUWAHATI
A new book on the business of tea has advocated a minimum floor price for the beverage to ensure the sustainability of the growers and the industry.
Titled ‘Minimum Floor Price for Tea’, the book penned by planter Chandra Kumar Dhanuka of the Dhunseri Group, was released in Guwahati on Wednesday (August 14, 2024).
A floor price is the minimum price at which a commodity can be sold legally. If fixed above the equilibrium price, a floor price goes a long way in ensuring the welfare of the producers, tea growers say.
“The stakeholders in the industry are the small tea growers who hold about 52% of the market share, producing about 702 million kg of tea. Large tea growers hold about 48% of the market share, producing around 648 million kg of tea,” Mr. Dhanuka said.
The tea buyers, sellers or merchants, brokers, and transporters are only intermediaries, he explained.
“The stakeholders, providing livelihood to around 3 million people, are suffering badly. The intermediaries, employing only 5% (of the people associated with tea), are suffering much,” he said.
Mr. Dhanuka said the industry has been lopsided with about 10 main buyers controlling the market involving thousands of sellers. “There is an oversupply of tea worldwide, which a Food and Agriculture Organisation report said is expected to continue till at least 2030,” he added.
Higher cost of production
He said Prime Minister Narendra Modi, during his first term, envisioned a margin of 50% on the total cost of agricultural produce. “But tea farmers are struggling to achieve their cost of production while other farmers are much better off given the protection of minimum support price (MSP),” he said.
The cost of production of tea this year has been in the loss-making range of ₹250-300 per kg, although an improvement on the average price of ₹210 per kg in 2023.
“MSP for the government entails buying agricultural products from farmers at the minimum price. A minimum floor price neither requires any financial support from the State or Central government nor does it require the government to buy tea,” Mr. Dhanuka said.
An assured floor price will help both big and small tea growers, hit by low prices and severe pest attacks possibly as an impact of climate change, maintain a minimum standard of living, he said.
Hemant Bangur, the chairman of the Indian Tea Association and his Tea Association of India counterpart Sandeep Singhania attended the event. Other participants included Bijoy Gopal Chakraborty, president of the Confederation of Small Tea Growers’ Association, Rajen Bora, president of the All Assam Small Tea Growers’ Association, and Rajeeb Gohain, member of the Tea Board of India.
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