Thousands of tea small growers will get ₹5.13 less per kg for the green leaf they supplied as raw material to leaf factories last month compared to February last year.
This follows the fixation of ₹16.52 per kg as the district average price by Tea Board in the Commerce Ministry.
Tea Board Executive Director Dr M Balaji said that this price was fixed as per Section 30A(5)(a) of Tea Marketing Control (2nd Amendment) Order, 2021 (TMCO).
He said that this price was arrived at based on the consolidated average price fetched by the relevant tea in the public auction in February.
He asked all factories to adhere to this price for the green leaf they bought as raw material from the small growers last month.
He also instructed all field officials of the Board to ensure that no factory in their jurisdiction paid less than this price.
The price was 47 paise more than the price fixed for January but as much as ₹5.13 less in comparison to the price fixed for February 2021.
For that matter, the price of ₹21.65 a kg fixed for February 2021 was the highest price in 2021. .
That means, growers will get about ₹20 less for every kg of manufactured tea because four kgs of green leaf are generally bought to manufacture one kg of made tea.
“We have been pointing out to the government that this method of price fixation does not do justice to the small growers. The TMCO has been amended almost ten times so far and still, it does not ensure fair price to the growers through reasonable Price Sharing Formula (PSF).
The net sale average is taken into account while fixing the green leaf price and not the price fetched by each factory with the green leaf it manufactured. So, we have urged the Tea Board to ensure that it collects from each factory details regarding the source of the green leaf, volume produced, volume sold through auctions and private sales, and the value realised so that the actual price is shared with the growers,” D S Ramu, President, Small Tea Growers Association of Southern India (STASI) told BusinessLine.
“We have also urged the Board to fix a floor price at the auctions for the made tea as done in Kenya so that factories are able to pay the green leaf price announced by the Board,” he noted.
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