Chandra Kumar Dhanuka (centre) at an event to launch his book entitled “Minimum price for tea‘ in Guwahati on Wednesday (14 August 2024). | Photo credit: SPECIAL ARRANGEMENT

GUWAHATI

A new book about the tea business calls for a minimum price for the beverage to ensure the sustainability of growers and the industry.

Titled “Minimum price for tea”the book by plantation owner 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 legally sold. When set above the equilibrium price, it contributes significantly to the welfare of producers, say tea farmers.

“The stakeholders in the industry are the small tea growers who hold about 52% of the market share and produce about 702 million kg of tea. The large tea growers hold about 48% of the market share and produce about 648 million kg of tea,” said Mr Dhanuka.

The tea buyers, sellers or traders, brokers and transporters are merely intermediaries, he explained.

“The stakeholders who provide livelihoods to around 3 million people are suffering a lot. The middlemen who employ only 5% (of the people involved in tea production) are suffering even more,” he said.

Mr Dhanuka said the industry was unbalanced with about 10 major buyers controlling the market and thousands of sellers involved. “There is a global oversupply of tea, which is expected to continue until at least 2030, according to a report by the Food and Agriculture Organization,” he added.

Higher production costs

He said Prime Minister Narendra Modi had targeted a 50% margin on the total cost of farm produce during his first term. “But tea farmers are struggling to cover their production costs while other farmers are doing much better due to the protection of the minimum price (MSP),” he said.

The production cost of tea was in the loss-making range of Rs 250-300 per kg this year, but this is an improvement over the average price of Rs 210 per kg in 2023.

“The minimum price means that the government buys agricultural produce from farmers at the minimum price. A minimum price does not require any financial support from the state or central government, nor is the government obliged to buy tea,” said Mr. Dhanuka.

A guaranteed minimum price will help both large and small tea farmers, who are suffering from low prices and severe pest infestations, possibly as a result of climate change, to maintain a minimum standard of living, he said.

Hemant Bangur, Chairman, Indian Tea Association, and his counterpart Sandeep Singhania of Tea Association of India attended the event. Other participants were Bijoy Gopal Chakraborty, President, Confederation of Small Tea Growers’ Association, Rajen Bora, President, All Assam Small Tea Growers’ Association, and Rajeeb Gohain, Member, Tea Board of India.