Commodities

Tea Board should stay out of auctioning system: Chairman

PTI Kolkata | Updated on February 17, 2020 Published on February 17, 2020

 

Tea Board chairman PK Bezbaruah said on Sunday that the statutory body should disassociate itself from the functioning of the age-old auction system and usher in a liberalised regime where private parties can enter.

He said the Tea Board’s role should only be restricted to issuing licences for opening up the auction centres after duly checking their financial capabilities.

“It is the right time that the Tea Board disassociates itself from the functioning of the auctioning system and be just a licencing body,” Bezbaruah told PTI.

The present auction scenario in North India represents “a failure of the system” as the purpose of discovering a fair price has been defeated, he said.

Bezbaruah said that as per the Tea (Marketing) Control Order or TMCO, 50 per cent of the produce has to be mandatorily routed through the auctions.

Varieties of tea are being sold at ₹50 per kg or lower and even good quality primary tea fetches a price of ₹60 a kg at the auction centres.

“The same tea when offered outside the auction system is fetching prices which are higher by up to ₹30 per kg,” he said.

“What I am now suggesting is that Tea Board should withdraw itself from the process and bring in a competitive environment where anyone with adequate financial strength and experience can set up such centres,” he said.

The six auction centres in Kochi, Kolkata, Siliguri, Coimbatore, Guwahati and Coonoor are controlled and subsidised by the Tea Board, Bezbaruah said, adding that the software used by these units are also facilitated by it.

“If Tea Board denies technical support, these auction centres will immediately close down,” he said.

He asked why a system that is not benefiting the main stakeholders of the tea industry, the producers and the workers, should be subsidised by a government agency.

“Is it only to benefit a limited number of traders and brokers?” he asked.

Published on February 17, 2020
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