In news The United Planters’ Association of Southern India (UPASI) has termed as ‘retrograde’ the recent circular issued by Tea Board India.
The Association said the mode of sale of tea should be left to the choice of the producers.
About the circular
The circular had directed manufacturers to comply with the order of mandatory sale of 50% of the total output through public auctions.
In 2001, the government repealed the mandatory routing of tea through auctions in line with the policy of economic liberalisation and free trade. However, this was again amended in 2015.
Tea producers have, during this period, developed a domestic market where they get better prices.
According to the Tea Board, its order will make the auction system robust and bring stability to prices.
But, tea auctions in India have a finite load- handling capacity.
Also, there is no guarantee that the manufacturers will get fair prices to cover even the cost of production.
Routing of teas through auction increases the transaction cost too.
About Tea Board
It is a statutory body under the Ministry of Commerce.
The Board is constituted of 31 members (including Chairman) drawn from Members of Parliament, tea producers, tea traders, tea brokers, consumers, and representatives of Governments from the principal tea producing states, and trade unions.
The Board is reconstituted every three years.
Functions:
Rendering financial and technical assistance for cultivation, manufacture and marketing of tea.
Export promotion
Research and Development activities
Extend financial assistance in a limited way to the plantation workers and their wards through labour welfare schemes.
Collection and maintenance of Statistical data and publication.
