Indian Tea Association urges Centre for floor price

 STAFF REPORTER

GUWAHATI: The Assam tea industry has been passing through a period of acute financial crisis over the last few years, with tea prices not being able to keep pace with the rising cost of production.

To enable the industry to overcome the present crisis, the Indian Tea Association (ITA) urged the Government of India to introduce a floor price to address the liquidity crisis in the industry. It said that the Assam and West Bengal governments have already extended their support to the floor price proposal and requested the Union Ministry of Commerce's in principle approval of the proposal.

The prices of Assam tea have grown at a compound annual growth rate (CAGR) of around 4.44 percent only since 2014, while the cost of inputs like coal, gas, sulphur, etc. has grown at a CAGR of 9-12 percent during the period. In addition to the increase in input costs, wages have also increased substantially in the past few years. The wage was Rs 94 per day in the Brahmaputra Valley in 2014, and it increased to Rs 232 per day in 2022. It is an increase of 146 percent. Likewise, the increase in wages in the Barak Valley during the period was 180 percent.

ITA said, "There is an urgent necessity for mitigating the escalating cost to ensure continued sustenance of the tea industry. If the government introduces the floor price, it does not have to bear any additional costs. The floor price has already been introduced in the sugar industry by the Government of India."

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