Assam seeks deferment in mandatory sale of dust tea through public auction

Apr 02, 2024

Guwahati (Assam) [India], April 2 : The Assam government has sought deferment in mandatory 100 per cent sale of dust tea through public auction system, which was set to kick in with effect from April 1, 2024.
On March 31, 2024, Assam's Chief Secretary Ravi Kota wrote a letter to Union Commerce Secretary Sunil Barthwal, requesting that the latter's Ministry consider deferring enforcement for a "reasonable period."
"As the tea industry in Assam comprises a large number of small tea growers and bought-leaf tea manufacturers, the implementation of this notification is likely to create significant challenges, inevitably impacting the livelihood of tea growers and other stakeholders," the Assam Chief Secretary wrote in the letter, seeking deference.
On the basis of directions from the Ministry of Commerce and Industry (Department of Commerce), the Tea Board of India has issued a set of directives to tea manufacturers in Assam and 10 other states regarding the auction of 100 per cent dust-grade tea through public tea auctions.
Through a gazette notification on February 26, 2024, the central government had mandated the sale of 100 per cent of dust grade tea through public auction from April 1, 2024, for dust grades tea manufactured in a calendar year in Arunachal Pradesh, Assam, Bihar, Himachal Pradesh, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, and West Bengal.
The tea community in Assam, which comprises a sizeable portion of the state's population, plays a critical role in dozens of Assembly constituencies.
Ravi Kota urged the commerce ministry to issue "appropriate orders on priority, keeping in mind the best interests of the tea industry in Assam and, more importantly, the welfare of small tea growers and associated stakeholders."
Renowned globally for its richly coloured and aromatic tea, Assam's tea industry, provides livelihoods to millions, with many others directly or indirectly dependent on the plantations. The state is famous for both Orthodox as well as the CTC (Crush, Tear, Curl) varieties of tea.
About 25 per cent of the teas that are produced in the state are of dust grade and the rest CTC and orthodox.
But, the tea plantation sector in Assam, which reached a crucial milestone of 200 years in 2023, is not in the best of health and has been struggling with issues such as rising production costs, relatively stagnant consumption, subdued prices and crop quality issues apparently due to climate change.
It also faces the challenge of holding its ground in a competitive global market. The tea business is cost-intensive, with an estimated 60-70 per cent of the total investment being fixed in cost terms.
Assam now produces nearly 700 million kg tea annually and accounts for around half of India's overall tea production. The state also generates annual foreign exchange equivalent to Rs 3,000 crore.