India's Tea Producers Welcome Minimum Price Proposal

A committee of the Tea Board of India has recommended a proposal to implement a minimum sustainable price for tea, a move welcomed by industry stakeholders as it could help increase wages for tea garden workers and ensure the industry's long-term sustainability. The proposal has been made to the Ministry of Commerce, which is yet to take a decision.

The tea industry in India is significant, with the country being the world's second-largest tea producer, accounting for an annual output of about 1,350-1,400 million kg. Small growers account for roughly 55 per cent of the production, and the industry employs millions of workers in about 270 large tea gardens and hundreds of small tea gardens across the country.

The proposal for a minimum sustainable price comes as the industry faces mounting cost pressures, with tea prices growing at a compound annual rate of about 2-3 per cent, while input costs have risen by an estimated 10-14 per cent a year. The daily wage for a tea garden worker in West Bengal is ₹250 per day, and industry stakeholders believe that a minimum sustainable price would help producers absorb wage increases and support returns for small growers and registered gardens.

The 10-member committee has proposed a benchmark price linked to a composite index of wage movements and the consumer price index, with periodic reviews to keep it aligned with costs and inflation. Industry bodies, including the Tea Association of India and the Confederation of Indian Small Tea Growers Associations, have urged the Ministry of Commerce to notify the minimum sustainable price at the earliest.

## Why it matters The proposal for a minimum sustainable price is crucial for the long-term sustainability of the tea industry in India. With the industry facing significant cost pressures, a minimum sustainable price would help ensure that tea producers can absorb wage increases and support returns for small growers and registered gardens. This, in turn, would encourage investment in replanting and quality, ultimately benefiting the millions of workers employed in the industry.

The implementation of a minimum sustainable price would also have a positive impact on the livelihoods of tea garden workers, who are currently struggling with low wages. The daily wage of ₹250 per day for a tea garden worker in West Bengal is a testament to the need for a minimum sustainable price to ensure that workers are paid a fair wage for their labor.

## What happens next The Ministry of Commerce is yet to take a decision on the proposal, and industry stakeholders are eagerly awaiting the outcome. If implemented, the minimum sustainable price would be a significant step towards ensuring the long-term sustainability of the tea industry in India. The industry bodies have urged the Ministry to notify the minimum sustainable price at the earliest, and it remains to be seen how the proposal will be received by the government.