07 May

New law, the first step in ridding the tea sector of colonial, socialist past

The draft Tea (Promotion and Development) Bill, 2022, is supposed to exchange the 68-year-old Tea Act, 1953. The commerce ministry, which is piloting the Bill, says the new laws will take away colonial-era provisions and socialist-era governmental restrictions on the trade. Whether a mere change of regulatory framework will assist remedy the woes of the trade, nevertheless, is a moot query. Of course, there is no such thing as a gainsaying the urgent want for reforms in the sector. Consider this: At current, anyone wishing to start out rising tea wants the authorities’s permission to plant tea! Manufacturing tea requires a separate licence. Exports are managed and there are quotas and allotments. Colonial-era provisions embody the authorities’s proper to really take away or destroy any tea planted “without permission”. Under the present Act, the Centre has the energy to regulate the worth of tea and might repair a minimal or ceiling worth because it chooses. Under the Tea Cess Act, which dates again to 1903, the authorities levies a cess on all tea produced to fund the “promotion and advertising and marketing” of tea. There are much more draconian provisions. As the tea sector went into a gentle decline in the seventies, the authorities armed itself with powers to take over the administration of any property which stays closed for greater than three months with out investigation. This was achieved beneath stress from labour unions, throughout a part in India’s financial historical past when nationalisation was extensively seen as the remedy to the ills plaguing development. In truth, whether or not beneath colonial rulers or after independence, the central authorities has sought to take care of tight reins on tea, one of India’s most profitable money crops. Although rising tea is technically agriculture, which is a state topic, the Central Tea Board Act, handed shortly after independence in 1949, ensured that management over tea remained firmly in central arms. On the face of it, this has labored out nicely for India. India at the moment is the second-largest producer of tea in the world, accounting for a fifth of the world’s manufacturing with annual manufacturing in extra of 1.2 billion kgs. It can also be the fourth greatest exporter, behind China, Sri Lanka and Kenya. But these numbers don’t inform the full image. Production has been stagnant for years, whereas there was a pointy fall in the high quality of tea produced, as continual under-investment in plantations has led to a gentle decline in plant and leaf high quality. This additionally hits realisations, each in the home and export markets. While India consumes a bulk – over 85% – of the tea it produces, most of it’s in the kind of CTC and dirt tea, which makes use of poorer high quality leaves. In export worth phrases, India lags significantly – Kenya’s tea exports, at $1.2 billion in 2021, had been greater than double that of India’s, whereas the high exporter earned over $2 billion, greater than 3 times India’s whole exports. The bother is, that every one of the coverage interventions in the tea trade have didn’t stem the deep rot plaguing the sector. From monetary troubles to acute infrastructure challenges, together with continual energy shortages and outages, large labour issues which have led to an exodus of organised sector gamers from the plantation sector and the inflow of speculative buyers and land sharks, in addition to chronically underfunded, labour run gardens, rising transport prices and above all, the dramatic effect of local weather change have all mixed to the secular decline of the tea sector. For starters, tea output is dropping – from practically 1.4 billion kgs in 2019, it fell to 1.2 billion kgs final yr, due to local weather change affect, the affect of pests and falling realizations from inexperienced leaf gross sales which have led to a quantity of growers merely abandoning manufacturing. Rising wage prices, and interventions by state governments, have truly worsened and never helped remedy the downside. The West Bengal authorities, as an example, is a component of the tripartite wage deal between staff, house owners and the authorities. Wage prices have quadrupled over the past decade, in keeping with a research (Tea Industry at the Crossroads) carried out by ASSOCHAM and ICRA. Last month, Tripura introduced a welfare scheme for tea staff, together with housing subsidy, rations, healthcare and a minimal wage of ₹176 per day. For this, the state authorities would spend ₹85 crore since Tripura has solely 7,000 tea staff. But this has thrown neighbouring West Bengal and Assam – with half 1,000,000 and 1,000,000 direct staff, respectively – into turmoil, with related calls for being raised there which the financially pressured governments there are in no form to ship on. Labour unions, on the different hand, level out that the proposed draft Bill will solely formalise the present actuality. They allege that lakhs of hectares have been planted with out permission, and to the rise of stand-alone ‘bought tea’ factories, which supply leaf from small growers, who escape the regulatory provisions of the Plantation Act and the Tea Act. It can also be debatable whether or not mere legislative reform can handle deeper issues reminiscent of falling costs, lack of innovation and diversification, falling productiveness and local weather change affect. While the authorities’s belated reform efforts are nicely meant, India might have lengthy since missed the bus in tea. 

Source: Hindustan Times Mint