The Hindu Business Line : Falling tea prices

You need not go too far to find the reasons for the fall in tea prices. In 1992 the Tea Board proudly announced that by 2000, India would be a net importer of tea and the need of the hour was to increase production to 1,000 million kg by that year. The industry responded positively and production went up to 900 million kg by 2000. But a glut and the fall in prices ensued.

The Tea Board blamed auctioneers, buyers and manufacturers for the sector's ills. The small grower was left out of the picture.

The fall in prices is mainly due to over-supply coupled with the poor plucking standards of small growers. Instead of the traditional two leaves and a bud, the small grower in the Nilgiris plucks five leaves and a bud with a big stalk to go with it.

Being the largest section, it is perhaps politically incorrect to point a finger at the small grower.

In 2000, a subsidy of Rs 2 per kg was given to the small grower. Instead) of rewarding those who follow good practices, the Government is encouraging the production of poor quality teas and further depressing the prices.

J. T. Chellam

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