The Hindu Business Line : Tea marketing order amended to boost grower income

Coonoor, Jan. 9 Two amendments brought about by the Tea Board, effective from January 1, 2008, are claimed to be tools for augmenting the income of the small growers in the Nilgiris.

One relates to the sharing of the sale proceeds of the made tea by the factories with the small growers. “Hitherto, 60 per cent of the proceeds went to the growers. From now onwards, it would be 65 per cent,” said Mr R.D. Nazeem, Executive Director, Tea Board.

The other related to the out-turn percentage based on which the price of the made tea would be divided for the green leaf supplied by the growers. “Hitherto, this conversion rate was 23 per cent. From now onwards, it would be 25 per cent,” Mr Nazeem said.

These collectively mean that if the auction price for the made tea of a factory averaged Rs 50 a kg, the factory has to disburse 65 per of it, that is Rs 32.50, to the growers who supplied the green leaf. At 25 per cent conversion rate, it would work out to Rs 8.15 a kg for the green leaf for the growers. So far, for the same auction average of Rs 50 a kg, the growers were getting Rs 6.90.

“Thus, this would mean an increase of Rs 1.25 a kg for the green leaf for the small growers. Collectively, this would increase the revenue of the growers by Rs 25 crore in a year,” Mr Nazeem said.

Admitting that this has happened because of a court case initiated by the Nilgiri Tea Growers' Protection Committee (NTGPC) with the High Court of Madras, Mr Nazeem said that the increase has been effected under Para 30 of the Tea Marketing Control Order, 2003. The powers under the same order would be used to monitor that the above provisions are followed by all factories, he warned.

For this, a new strategy to file the returns under Form E pertaining to Item No: 25 through e-mail would be adopted. Factories would be required to file the return before 4th of every month. The sharing of the average price and the out-turn percentage would be strictly monitored for each factory.

"Wherever we discover shortcomings, we will ask the brokers to deduct the same from the sale proceeds and disburse to the growers. If necessary, we will even prevent the concerned players from participating in the auctions. The whole idea is to ensure that the growers' interests are protected," Mr Nazeem said.

The revision has been effected in the light of the recommendations of the Institute of Cost and Works Accountants of India (ICWAI) whom the Board engaged to study the production cost last year.

In its petition to the High Court, the NTPGC has pleaded for the fixation of a minimum support price for tea.

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