Tea experts urge industry to adapt to current situation

Guwahati: The tea industry needs to embrace emerging smart technologies and look for alternative models of revenue generation essential to stay afloat in an ecosystem where tea as a stand-alone crop may not be sustainable.

This was stated by Nayantara Palchoudhuri, Chairperson Indian Tea Association at its 140th annual general meeting in Calcutta yesterday. The ITA has elected Atul Asthana as the new chairman for 2023-24.

“Our journey ahead will need changes within the industry in order to adapt to the contemporary situation. Embracing the emerging smart technologies that factor in efficiency, productivity, cost mitigation and seeking alternative models of revenue generation are essential to stay afloat in an ecosystem where Tea as a stand-alone crop may not be sustainable,” she said.

She spoke of climate change-triggered adversities that threaten the very existence of the tea industry, successive years of financial stress, the dimensions and complexities of which stem from the increase in costs on all fronts including wages, while prices remain un-remunerative. “The deepening crisis – where large segments of the industry continue to record losses and see progressive erosion of net worth – calls for a unified approach in dealing with multifarious challenges,” she said.

She said the Assam Govt’s move to formulate a Tea Policy is laudable as such a policy would enable sustainable growth of the tea industry by way of thrusts on incentivization, modernization and tourism: thus aiding the stakeholders and the state’s rural economy while upholding the richness and uniqueness of our teas at the international level.

“The Assam Tea Policy 2022 proposes compensation of additional expenditure on transportation & terminal handling @ Rs 5 per kg of teas exported directly from Assam to overseas destinations. Its implementation will effectively address high handling costs and boost cost[1]competitiveness on the export front,” she said, adding that a similar policy in West Bengal would be a welcome step.

She commended the Govt of Assam for extending the Assam Tea Industries Special Incentive Scheme (ATISIS) to 2027. “This exemplary scheme has significantly boosted orthodox production and modernization of factories manufacturing orthodox/speciality teas which are much sought after overseas. Schemes of similar nature in other tea growing estates, suiting local requirements will be beneficial for the industry’s viability as well as exports,” she said.

She spoke of the perpetual increase in open market food-grains prices in Assam which is denting the industry’s viability. “The proposal of monetization needs serious consideration as also the Unions’ cooperation or the erstwhile model of distribution of PDS allocation through management, thereby mitigating costs needs to be restored” she suggested.

The Assam Renewable Energy Policy 2022 is a progressive step to leverage renewable energy potential which can be of benefit to members and I wish for similar interventions in other tea-growing states.

She said the increase in wages has made it imperative that the output per labour increases significantly if the industry is to survive. “It is now incumbent upon management and unions to address the productivity issues with renewed vigour and reiterate that productivity levels on all fronts have to rise significantly for sustaining the industry’s economic viability and enabling employers to meet their payment commitments with ease,” she said.

The Bharat Auction model hasn’t had the desired impact of aiding fair price discovery. “The Price Rediscovery Session (PRS) is hardly attracting participation and declaration of base price weeks in advance is impacting market trends. “Pursuant to our request for discontinuation, the Tea Board has modified the Rule and made it optional for sellers. Disclosure of the base price close to the sale date is another request that merits consideration. The suggestions of producers, if taken on board, will make the platform attractive for all stakeholders,” she said.

She said the recent coverage by the press and media on allegations of artificial colours in tea is disturbing as such reports have an adverse impact on the market stability of teas. “Our commitment to making teas which are ethical, sustainable and compliant with the laid down norms of food safety standards of India is unwavering. Utmost care is taken to ensure that the teas produced are safe for consumption and at the same time, the FSSAI and Tea Board are equally vigilant,” she said.

On the export front, said the ITA has been proactive on the Iran export issue given the importance of that market for Indian teas. Interactions at the Embassy of Iran and the Ministry of External Affairs were initiated to break the deadlock. Meanwhile, ITA has also requested the Tea Board to mount and lead a trade delegation to Iran with the hope of positive results. The Tea Board organized a virtual interaction with the Indian Ambassador to Iran on August 24 in which the Association participated. “Non-operationalization of Rupee-Rial trade and acute shortage of freely convertible currency are two crucial issues which were highlighted at this interaction,” she said.

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