Small tea growers for clusters to achieve scale, submit status report to Commerce ministry

Small tea growers (STGs) have submitted a status report to the Union Commerce Ministry highlighting the issues faced by them and also sought assistance from the government to achieve scale in their operations by setting up clusters. In the status report prepared by engaging consultancy firm BDO India LLP, the apex body of STGs the Confederation of Indian Small Tea Growers Associations (CISTA) said that although their contribution to the overall tea production volume of the country is close to 52 per cent, they are not getting the remunerative price for green leaf produced by them while the costs of production is rising.

President of CISTA Bijoy Gopal Chakraborty said a delegation met the Union Commerce secretary Sunil Barthwal two days ago and submitted the status report to him seeking government’s interventions for the growth of the STGs in the country.

“In the report, we have said that cluster development will play a pivotal role in moving STGs up the value chain which will help them in getting remunerative prices. In this context, the government may consider development of clusters in the major tea producing regions of the country for quality production and brand building in domestic and export markets”, he added.

Out of the 1350 million kilogramme of tea produced in India in 2022, 52 per cent was contributed by the STGs, according to CISTA. The report also highlighted the cause for providing incentives to STGs who are trying to move into packeting for promotional activities, besides supporting start-ups in the tea trade which are expected to be formed in huge numbers.

Regarding bought leaf factories (BLFs) which process tea leaves without having any captive gardens, the CISTA status report stated that their modernisation of operations are integral for the development of STGs.

“The report said that BLFs are key to processing of green leaves which is key to ensuring good quality tea meeting accepted quality standards. We also highlighted that the government should also introduce production-linked incentive (PLI) scheme for the tea sector, especially the STGs which will incentivise them and go for value addition in their branding efforts. The report also cited the hurdles faced by the STGs in raising credit from the financial institutions. According to the report, lack of past financial history of the STGs has put the sector in high-risk profiles for which banks and other institutions are reluctant to advance credit to them. Besides, lack of crop insurance support to the tea sector when compared to other agricultural products is also a disadvantage faced by the producers, the report mentioned.

CISTA also called for assistance from the government in establishing market linkages by setting up effective marketing channels which are critical for price discovery and also making the STGs aware about the evolving requirements of the buyers, both individual and institutional. Currently, there are 2.4 lakh STGs in India whose combined production is around 690 million kilogramme.