“Life is like a cup of tea, it’s all in how you make it…,” is how the saying goes. But, for those in the business of making tea – planters, bottlers and associate industries – the proposed move for making it taste just right is happening now. Though over 68 years late, the Union Government has come out with a draft Bill that seeks to replace the Tea Act, 1953, with Tea (Promotion and Development) Act, 2022.
In fact, it is not only the Tea Act, the government has proposed changes in law for other cash crops too including coffee. The intent is clear -- of doing away with redundant provisions in the Acts and decriminalising offences for facilitating ease of doing business in the spices sector.
The government’s latest move is something which the industry has been seeking. So, mostly it has been well received. But, there are concerns. The draft proposals of respective Acts, which have been placed in the public domain for comments from stakeholders, have elicited some carefully crafted responses.
The proposal envisages recasting the boards of such entities. The Boards, which had the powers of giving license for planters, will now be restricted to branding and promoting their respective commodities, if the draft proposals are accepted. The powers to give license would henceforth lie with the States. However, the Associations will need to get registered with the Board.
According to the draft, the Boards 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.
As PK Bezboruah, Chairman, Tea Board India, puts it “Such changes in law do take time, therefore, I would say, better late than never. However, the government should be careful that the new Act meets the expectations of all the stakeholders of the tea industry.”
He said that plantations are in most aspects just like any other industry and hence the many State level laws and regulations that exist to regulate industries should be adequate for plantations as well.
Loosening the bureaucratic grip
But the draft proposes to dilute the powers of the Board and restrict it only to promotional activities mainly. Will it mean doing away with the hold of bureaucracy from such Boards? And also will it mean making jobs at the Boards still attractive?
The regulatory and licensing powers being taken away from the Board will no doubt lessen its authority, but this may not be an undesirable development.
“The Boards have already undergone structural changes and are no longer the fiefdom of all powerful bureaucrats. Going forward, once the new Act is passed, the Board can remodel itself as a tea promotional and marketing body and a quality control watchdog that can supplement the efforts of the Food Safety and Standards Authority of India in ensuring that consumers get a safe and refreshing cuppa,” he said.
Bezboruah said, "there is a reason why tea and the Board are still part of the Ministry of Commerce and not Agriculture."
He added "Tea was once the largest export of the country, and though it lost its preeminence long back, and now accounts for less than half a per cent of total Indian exports, exports remain a key aspect of the tea industry, that determine its viability. Domestic demand being 83 per cent of production volume is definitely more important in today's scenario, but exports remain the balancing factor that shore up the already low price realisation that the tea farms get today."
There are many local and State acts which govern the industry. Besides, by empowering the States to give license the law will also ensure that forest land is not used for plantation.
The Confederation of Indian Small Tea Growers’ Association (CISTA), which demanding a greater say in the affairs of the sector, feel that name of Tea Board should not be changed, though the job profile should. They believe that the growers’ category should be split into three – Estate Grower, Big Grower and Small Grower -- and the manufacturing part should be split into four categories – Estate, Cooperative/SHG/FPC, Bought leaf and mini tea factory.
CISTA is also opposed to the concept of registration with the Board as the Associations are already registered under many different Acts and they have to comply with their norms. So, another registration is seen as an additional burden.
A key proposal in the draft is that the Board should encourage fair and remunerative prices for growers, which is said to be good for the tea industry that has been reeling under the pressure of rising costs which has been impacting profitability. According to CISTA, instead of encouraging fair and remunerative prices it should be said “ensuring fair and remunerative price of green tea leaf, for small/big tea growers and made tea for manufacturers.”
The Boards, according to the draft will also promote economic, scientific, and technical research in the 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 Act has been redrafted to suit the current needs of the industry while aligning it with global best practices. While the draft is a step in the right direction, the devil lies in detail, therefore how the final proposal shapes up will be the key indicator of how far the government is willing to go. Also, the recast of the Acts should not be delayed, as the industry has already waited for far too long.