Tea Industry: CCPA appeals for urgent intervention

TheConsultative Committee of Plantation Associations (CCPA), a joint forum of teaplanters, tea growers, tea sellers and tea brokers, came together on Tuesday inGuwahati to deliberate on the problems faced by the tea industry and theirpossible solution.

Addressingthe media, the CCPA informed that the Indian tea industry is confronted withseveral challenges which are threatening the long term viability of theindustry.

"Thesector is reeling under cost pressures due to price stagnation in the backdropof perpetually increasing cost of production, mismatch between demand-supplyleading to oversupply, high transaction costs and fair price discovery changesat the auctions, climate change adversities etc," read a press release by CCPA.

Challenges:

Tea prices have remained stagnant over the last few years, resulting in severe stress to the tea sector.

TeaPrices have grown at a CAGR of around 1% over the last few years, but cost ofvital inputs like coal, gas, Sulphur etc have increased at a CAGR of 6-7%during the same period.

Wagesof Tea Garden Workers increased by around 22% in 2018 in Assam, resulting infinancial stress of the industry further.

TheCCPA further stated that per capita consumption of tea in India at 286 gramsper year is low when compared to some other tea consuming countries. The bodyurged the government to set up a dedicated fund for undertaking vigorousgeneric promotion campaigns in the domestic market to boost consumption.

Itfurther asked the government to consider immediate imposition of a ban onexpansion of Tea Area for a period of at least 5 years to check oversupply. Theforum added that there must be a sustainable Minimum Benchmark Price (MBP) forGreen Leaf which would cover the cost of production of the Small Tea Growers(STGs) since they contribute 50% in Indian Tea Production.