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Guwahati Tea Auction Buyers Association moves Centre for review of 'Tea Act-1953'

The GTABA (Guwahati Tea Auction Buyers Association) on Thursday submitted a list of suggestions to Anupriya Patel

Guwahati Tea Auction Buyers Association

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  1 Oct 2021 1:59 AM GMT

GUWAHATI: The GTABA (Guwahati Tea Auction Buyers Association) on Thursday submitted a list of suggestions to Anupriya Patel, Minister of State for Commerce & Industry, giving suggestions for review of the 'Tea Act-1953'.

The GTABA recommendations were elaborated by GTABA in the virtual meeting held on September 22.

The GTABA added, "With regard to the specific queries posed regarding the Tea Act, 1953, we submit that 'The Tea Board of India' has been formed under the Tea Act. This Act gives the Tea Board draconian powers to control the Tea Industry and enact legislation as it deems fit. Under the 'Tea Act', the Tea Board has enacted various licensing requirements such as: Tea Marketing Control order, 2003, and the Tea Distribution and Export Control order, 2005,which are heavily control oriented and place unnecessary controls and burden on buyers and exporters.

The 'Tea Act-1953' was introduced when it was a different India, with a more socialist economy and Government seeking to control a fledgling economy. Tea itself was a major foreign exchange earner and an essential commodity. The India of 2021 is a modern vibrant economy led by a Government which espouses policies of 'atmanirbhar' and 'ease of doing business'. The Tea Act in its opening paragraph speaks of the Act being introduced with a view to controlling the Tea Industry. Given the current Government's policies, we submit that the tea industry would be better off without these 'controls' and exercise of the draconian powers by the Tea Board that the Tea Act, 1953, entrusts it.

Turning to ground realities in implementation of Tea act, we find that the powers vested in Tea Boardhave been virtually arbitrarily applied over the years, without accountability. Tea Board is not a bodyof experts and neither have, nor can be expected to have an understanding of market mechanisms. Due to its vast powers, it has opened itself to being a fertile lobbying ground by various stakeholders to suit their own agenda and perception, irrespective of its effect on the industry. Tea Board has eitherused its powers and taken a decision based on the argument that sways it more, or as is typical, a costly consultant is appointed who anyway turn to the industry for input, and then submits an expensive report. Having spent the money, Tea Board has no option but to implement the recommendation to justifr the expense, irrespective of whether stakeholders highlight its flaws.

It is our submission that it is largely due to such lobbying that licensing requirements were introduced such as TMCO with the intent to exercise control over buyers and uncover confidential trading positions, such as stocks. All buyers were required to submit quarterly returns with details about their purchases, sales and stock even as the extra compliance requirement added time and cost to buyers even though the purchase figures of auction buyers is already in their database . Clearly, even the Board had no use for this data. When all the tea traders are under the GST Act then what is the need of duplicity of data. The TMCO provisions are dictatorial, arbitrary and contravene any policy with regard to 'Ease of doing Business'.

It is shocking that under the powers vested by the Tea Act, the Tea Board without any knowledge of market mechanisms has chosen to dictate every aspect of tea marketing, to the detriment of the trade. The public auction is an important tool for sale of tea and sets benchmark pricing for tea. This has been taken over, and totally governed and over regulated by the Tea Board of India, despite their being dedicated auction committees in each auction centre, with all stakeholders represented. Tea Board has made itself an e-commerce operator and every small amendment or permission requires each auction centers to spend days liaising with Tea Board. This includes simple matters like getting a prompt postponed with unanimous consensus or just any matter that the trade considers expedient.

It is very unfortunate that producers are not obeying the rules and directives under the Tea Act. The directives of the Tea Board are never implemented. We the buyers are never given any choice and are forced to accept these directives. Producers sell most of their good quality teas in private sale and whatever is left is then sold in the Tea Auction. Hence the auction prices are seen to be deteriorating and thus the small growers are paid lower prices for their green leaves and are forced to pay lower wages to their labor.

"The Public auction is an important tool for sale of tea and for benchmarking pricing of tea but this is actually not a perfect picture given by the tea industry. In the end season Tea sold by the producers in Public Auction is very low in quality. The image of Indian Tea is deteriorating. The various committee recommendations regarding standardization of packing/quality is never implemented by the Tea Board. We cannot understand why they always have a selective approach towards implementation.

Please Note that in the History of Tea we Guwahati Tea Auction Buyers Association the second largest CTC tea buyers in the World are never represented in the Tea Board. The Auction Centers which is selling 35-40% of the Indian Tea produce where Buyers Association is never included in the Tea Board decision making. Whatever suits the Tea Board is forcefully implemented on us.

TYhe GTABA recommends a complete overhaul of the Tea Act, 1953 if not its repeal, and replacement by a simple set of guidance. What is important for tea today are aspects relating to food safety which comes under FSSAI. There are routine violations by producers even of basic FSSAI standards and this has not been addressed, as the Tea Board has hardly ever used its vast powers to take such violators to task. This should be monitored and strengthened under FSSAI.

We believe that the Tea Board has become redundant today, and recommend that Tea Board should be replaced with a sleek 'Tea Promotion and Development Council' working under the Ministry of Commerce & Industry. The need is to move the Tea Board from its current role as a regulator and controller to a body which is an enabler and facilitator in helping the Tea Industry be 'atmanirbhar' and survive. Dilution of controlling powers will also remove vested lobbying interest that try to influence decision making and have contributed to the ill-health of the tea industry.

GTABA feels Tea Board Role should be that of Development of Tea Industry and promoting the Consumption of tea which is very low compared to the other countries. If the consumption grows prices will automatically increase.

"The Tea Board should not intervene in the day to day business but facilitate ease of doing business. Some recent decisions of the Tea Board have already affected lakhs of small and medium tea traders across India and further they are imposing a new system where only the big players will be benefitted.

"Therefore, we request you to please look into this matter and examine the facts and ask the Tea Board about such orders which are removing the small and medium tea traders from the auction system.

"GTABA remains committed in playing a positive role in keeping the Indian tea flag flying high, and we remain availablefor any further discussions, or queries that the Government of India may have."

Also Read: Assam's Speciality tea auctions for a whopping Rs 75,000 kg at GTAC

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