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Sunday, Apr 21, 2002

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`Lower auction prices' hurting Nilgiris tea

G. Srinivasan

NEW DELHI, April 20

A DELEGATION of tea growers led by the Nilgiris Member of Parliament, Master Mathan, met the Prime Minister, Mr .A. B. Vajpayee, for immediate intervention to help the small tea growers of this region.

Delegation representatives told Business Line here that tea growers of this Southern tea producing zone suffer from persistently lower prices prevailing at the auction centres of Coonoor, Coimbatore and Kochi, the vital auction centres for marketing Nilgiris tea.

Among the important steps the delegation sought from the Prime Minister include, minimum support price for tea, subsidy for small growers, marketing support and a general directive to big tea companies to stop exploiting the growers and ensure remunerative price to their private sale as also for auction centres.

One of the delegates later complained that the Tea Marketing Control Order which was relaxed last year giving freedom to growers to sell their produce either through the private channel or auction centres has been grossly "abused'' by major tea companies. The majors collude with brokers to ensure that the private channel sale of tea growers do not fetch even any reasonable price or a higher margin so that whatever is sold in distress by the growers can be "siphoned off'' by the tea majors. This way, the same tea is being marketed under a brand name with a margin of as high as 500 per cent. The delegate asked how is it that a cup of tea is sold at Rs 100 in fashionable kiosks whereas the tea grower at the bottom end of the value chain is not even getting Rs 50 per kg in which several cups of tea could be made.

They said that even as the average auction prices have fallen affecting the returns to the growers, retail prices paid by the consumers have not displayed any softening trend. Even as the cost of production of tea is estimated around Rs 65 per kg, the average auction price has been ruling at Rs 46 in recent months, making the cultivation of the commercial crop unviable to a larger band of small and marginal tea growers in the Nilgiris region.

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