Guwahati, Apr 17 (PTI) Four leading tea producers’ associations have urged Prime Minister Narendra Modi to withdraw or modify the rules that mandate the sale of at least 50 per cent of the total tea produced in a year through public auctions.
Urging the prime minister to give tea producers the freedom to choose the mode of sale of their produce in line with market dynamics, they contended that the extant rule puts tea producers at a significant disadvantage as it involves higher transaction costs and longer selling cycles compared to ex-factory sales.
The four groups — the Assam Bought Leaf Tea Manufacturers Association, North Eastern Tea Association, Bharatiya Cha Parishad, and North Bengal Tea Producers’ Welfare Association — based in Assam and West Bengal, claimed they collectively represent nearly 60 per cent of north India’s tea production.
It pointed out that out of the total annual tea production of about 1,350 million kilograms, north India produces nearly 1,120 million kilograms.
In the letter to the prime minister, which was made public on Friday, the four associations urged him to alternatively grant suitable relaxation or exemption to affected stakeholders under the Tea (Marketing) Control Second Amendment Order, 2003.
In 2015, the Ministry of Commerce and Industry mandated that all registered tea manufacturers must sell not less than 50 per cent of their total annual production through public tea auctions in India.
The notification also states that the registering authority may revise this percentage periodically with the approval of the Central government.
“The compulsory sale through public auctions places tea producers at a significant disadvantage as this system involves higher transaction costs and longer selling cycles compared to ex-factory sales,” the associations claimed in the letter.
They argued that several expert committees constituted by the Tea Board have examined the auction system, and though recommendations for improving efficiency have been made, none have advocated mandatory auction sales.
“Historically, attempts to enforce compulsory auction sales have not been successful. Multiple amendments to the Tea (Marketing) Control Order in this regard reflect the challenges associated with such mandates,” the letter stated.
This mandate is inconsistent with the Government of India’s policy of promoting ease of doing business, the four groups pointed out in the letter.
Producers should have the flexibility to choose the most efficient and viable mode of sale, and the current requirement imposes undue financial and operational burdens on the industry, the letter said.
The associations claimed the mandatory requirement to sell tea through public auctions infringes upon their fundamental rights, particularly the freedom to carry on trade and business. PTI DG DG NSD
This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.