Commodities

Centre moves to overhaul commodity boards

Shobha Roy | | Updated on: Jan 12, 2022
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Draft Bills moot doing away with archaic laws, turn focus on branding, promotion

In what could completely overhaul the current structure governing cash crops such as tea, coffee, rubber and spices, the Union government has come out with draft Bills that propose to recast bodies such as the Tea Board of India and the Coffee Board and turn them into entities for branding and promotion of respective commodities.

The draft proposals, which have been placed in the public domain for comments from stakeholders, seek to reconstitute the functions of the boards governing these commodities so as to enable them to act as facilitators for optimising the development and promotion of the industry.

Redundant provisions

After more than 68 years, some of the provisions of the Tea Act, 1953 have become redundant, it said. The proposed draft envisages deleting such archaic provisions and introducing new objectives/functions/powers so that the board scan act as the facilitator for optimising the development, promotion and research in the tea industry and help in improving production, export and quality of Indian tea, a notice on the Tea Board site said.

On similar lines were the proposal on the website of other commodity governing bodies such as the Coffee Board.

For example, the role of the Tea Board would move from being a licensor to a facilitator. Unlike earlier, setting up a tea factory, manufacturing and purchasing tea would no longer require a licence from the Board. Instead, they would require only a registration, which may call for reduced compliance, said an industry expert. Some of the punitive sections of the Tea Act are also being replaced, notably Section 16, which had empowered the Tea Board to take over any garden if the management was not up to the mark.

Downstream activities

KN Raghavan, Executive Director, Rubber Board, said the main thrust of the draft for his board is to replace periodic licensing with one-time registration and expand the responsibilities of the Rubber Board to cover downstream activities in the fields of research, training and marketing.

Sources in the plantation industry said the drafts, seen as another ease of doing business measure, also attempted to do away with multi-control orders, which forced stakeholders to report to too many authorities.

In the case of coffee, sources said the proposed Bill, considered to be a simplified version of the Coffee Act - enacted in 1942-, is more facilitative in nature with the objective of developing the coffee sector. It will also safeguard the interests of stakeholders, including plantation workers.

In the case of the Spices Board, a need has been felt to enable the authority to provide focussed attention across the entire supply chain of spices, if required for the purposes of export promotion.

Further, some of the never-used/ redundant provisions in the Act need to be removed and offences are to be decriminalized for facilitating ease of doing business in the spices sector, official sources said.

Key changes mooted

As per the draft Act, the Tea Board should work towards optimising the production, sale and consumption of tea by promoting exports and also encouraging the sale of tea through e-commerce platforms. It should also promote branding, diversification, value addition, packaging and furthering the interests of stakeholders involved in the tea industry.

One of the key highlights in the draft is that the Tea Board should encourage fair and remunerative prices for growers. This, industry experts said, would go a long way in ensuring tea growers get a fair price for their produce. It is to be noted that the tea industry has been reeling under the pressure of rising costs outstripping the realisation thereby impacting profitability.

This apart, the Tea Board should also promote economic, scientific, and technical research into the tea industry, by collecting, analysing, and disseminating economic, scientific, technical data, information, statistics, and studies relating to the industry in India. It should also encourage the adoption of the best available technologies so as to minimise the adverse impact of climate change.

The boards will be run by chief executive officers who will be aided by a chief financial officer.

The proposal is also aimed at improving the administrative apparatus of the boards to improve efficiency. The drafts also define the objectives of the boards and the means for achieving them. They will have more modern legislation in tune with the times, he said.

The Act has been redrafted to suit the current needs of the industry while aligning developments with global best practices. Industry associations are studying the proposals and are expected to make formal comments over the next few days.

According to PK Bezboruah, Chairman, Tea Board of India, the changes proposed highlight the Board’s role in enhancing demand and focusing on quality. If funded adequately, then it can augur well for the industry.

“Currently the Tea Board functions more like a watchdog for licensing now it will be a watchdog on quality. The Act seems okay now the rules will determine whether it will work or not,” Bezboruah told BusinessLine.

With inputs from Sajeev Kumar V, Kochi, and Vishwanath Kulkarni, Bengaluru

Published on January 12, 2022

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