New ratio to share tea price in small sector

The Tea Board of India has announced a change in the price sharing formula for the small tea sector of the country.

According to the new notification, growers in north Bengal and Kerala will receive 58 per cent of the sale proceeds (a reduction of two per cent) while BLFs will receive 42 per cent (an increase of two per cent). The lowest percentage (44 per cent), fixed by the board, is applicable to Bihar and Himachal Pradesh while growers of Uttaranchal will get the highest percentage (69 per cent) of the sale proceeds.

So long, small growers across the country, around 1.50 lakhs of them, used to get 60 per cent of the price of a kg sold through BLFs while the factory owners used to get the remaining 40 per cent. The ratio was even throughout the country except in the Nilgiris, where it was changed to 65 and 35 per cent last year.

In the notification, which has become effective from February 16 this year, the new sharing percentage is different in each state. The move, tea board sources said, follows a study undertaken by experts from the Institute of Cost & Works Accountants of India (ICWAI).

“The ICWAI study had revealed that cost of production of growers and BLFs are different in different states. That is why the sharing percentages are also different,” H.N. Dwivedi, the adviser to the tea board, said over the phone from Calcutta today.

Tea growers of the region, who had been insisting on the change, however, have alleged that the board imposed the new ratio without consulting them. “The board should have held talks with us instead of taking the decision based on the survey results only,” said Bijoygopal Chakraborty, vice-president of the Confederation of Indian Small Tea Growers’ Associations, an all-India body of the growers.

BLF owners said they had expected more increase. “For small growers, the price was steady throughout last season. We earned less and had expected the board to make changes in the percentage to bring parity,” said Prabir Seal, the president of the North Bengal Tea Producers’ Association.