The poor crop due to climate change and stagnating prices have led the Indian tea industry to urge the central government to declare a floor price for green leaf and other varieties. The Indian Tea Association (ITA) on Tuesday said that tea planters in West Bengal are facing stagnating prices and increasing financial stress and the introduction of a floor price would be an immediate solution to address the ‘unremunerative price’ of tea without any additional cost to the government.
As per ITA’s statement, “The industry has proposed to the Ministry of Commerce, Government of India for declaration of a floor price for green leaf (payable to small tea growers) and made tea (payable to tea producers) indexed to cost of production.” The Department of Industry, Commerce & Enterprises, Government of West Bengal has written to the Union Commerce Ministry to consider the floor price proposal favourably.
ITA further stated, “The government of Assam has also extended its support to the proposal and has requested the Union Commerce Ministry to grant in-principle approval to the proposal.”
According to the statement, the West Bengal tea industry, in particular the Darjeeling planters, has been experiencing a severe financial crisis as a result of tea prices that have been unable to keep up with the rising cost of production.
Since 2014, the price of West Bengal tea has increased at a CAGR (compound annual growth rate) of just about 4 per cent, but the cost of essential inputs like coal, gas and sulphur has increased at a CAGR of 9–12 per cent during the same time period.
According to a statement, poor weather conditions “adversely impacted crop in several tea growing pockets in Dooars and Darjeeling,” meaning that the new tea season has not started off well for the West Bengal tea industry.
The Darjeeling crop is predicted to have decreased by 39 per cent in March based on ITA data that is currently available. Numerous areas in the Dooars region have also noticed the drop.