Tea Board appoints consultant to study price sharing formula

BDO India will carry out field visits to gather data relevant to the study from farmers and factories
Tea Board of India has appointed BDO India LLP for conducting a study on determining a price sharing formula (PSF) in all tea-growing districts in the country, except Tamil Nadu’s Gudalur-Pandalur region and Kerala’s Wayanad district. The entire study including submission of final report is scheduled to be completed within six months from June 2023, the Board said in a recent circular.
The selection was made through an open tender. As per the contract, BDO India will carry out field visits to gather data relevant to the study from farmers (small tea growers and small tea growers’ associations) and factories (both bought-leaf and estate factories).
“In this regard, the consultant team shall physically visit Assam, West Bengal, Tamil Nadu, Kerala and Tripura, where the concentration of small tea growers is more for conducting primary research including discussion with Tea Board officials, Tea Research Associations, STGs and BLF associations, all producers’ associations across India (estate factories) as well as individual surveys with growers and factories,” it said in its June 19 circular.
Virtual interaction
For other tea-growing States like Himachal Pradesh, Karnataka, Uttarakhand, Bihar, Odisha, Arunachal Pradesh, Meghalaya, Mizoram, Nagaland and Sikkim, the study will be carried out through virtual interaction with stakeholders.
According to present Tea Board norms, bought leaf factories and estate tea factories buy green leaf from small tea growers in accordance with the price sharing formula. As per the formula, STGs and BLF in West Bengal follow a 58:42 price sharing while in Assam it is 60:40. The formula, which was introduced in 2004, was last reviewed in 2013. The association for small tea growers have been repeatedly urging for a revision in PSF given the steep rise in cost of production and inflation.
“We have been urging for a revision in PSF for many years now. The last review was done in 2013 and the cost of production has changed substantially in the last ten years. Our PSF was based on the Sri Lanka model which has been very successful there because 100 per cent of their teas are routed through auctions. But in India only around 40-42 per cent sales happen through auction route. We feel PSF will only be popularised when 100 per cent of tea is sold via auction,” Bijoy Gopal Chakraborty, President of CISTA (Confederation of Indian Small Tea Growers Association), told businessline.