Representatives of the Tea Association of India (TAI) highlighted the major challenges facing the traditional tea industry in North Bengal, including the burgeoning small tea sector, stagnant auction prices, and rising production costs.
Speaking at the 52nd annual general meeting of the North Bengal branch of TAI, Sandeep Singhania, the TAI president, underscored the significant increase in tea production by small tea growers over the past two decades, rising from 18 to 64 per cent in North Bengal.
Singhania emphasised the dichotomy within the tea industry, as the emergence of the small tea sector with a different cost structure compared to established tea estates has led to market undercutting. He stressed the necessity for a level playing field to ensure the sustainability of tea estates, as the cost differential affects market dynamics.
Pointing out the disparity between rising production costs and tea prices, Singhania highlighted a 178 per cent increase in daily wage rates over the past 12 years, compared to a 67 per cent rise in tea prices during the same period. Additionally, Singhania noted the exponential increase in input costs such as fertilisers, coal, and pesticides over the past two years, further straining tea garden economics.
The tea industry, which employs over three lakh people in the region, is in need of incentives from central and state governments to navigate these challenges. Suggestions put forth by TAI members include interest subvention on capital borrowing, incentivising non-CTC tea varieties, and subsidies on power costs.
Chinmay Dhar, chairman of the North Bengal branch of TAI, highlighted the shifting production landscape, with tea estates contributing 34 per cent of Bengal's tea production in 2023, down from 41 per cent the previous year. The average tea price in North Bengal declined from Rs 175 per kilo in 2022 to Rs 164 per kilo in 2023, indicating the crisis faced by the organised tea sector amidst these challenges.
The TAI's call for government support underscores the urgency in addressing the structural issues plaguing the traditional tea industry in North Bengal, crucial for the livelihoods of thousands employed in the sector and the region's economy as a whole.