Assam tea industry crisis: Bought leaf factories' ‘shut-down’ protest against auction rules
GUWAHATI: Over 350 bought leaf factories across Assam have shut down in protest against a Central government notification mandating the 100% auction of dust-grade tea.
The Tea Board of India has responded by directing tea planters to procure more green tea leaves from small tea growers.
The closure follows a recent order from the controller of licensing at the Tea Board of India, Rajanigandha Seal Naskar, advising estate producer associations to increase their procurement of green tea leaves from small growers, within the procurement limits set by the Tea (Marketing) Control Order.
The Assam Bought Leaf Tea Manufacturers Association (ABLTMA) has demanded the cancellation of the notification, arguing that it does not guarantee price realization or timely sales through auctions.
They insist that producers should be free to sell their produce through any preferred method.
The Tea (Marketing) Control (Amendment) Order, 2024, effective from April 1, 2024, requires that all dust-grade tea produced in certain states, including Assam, must be sold via public auctions.
ABLTMA president Chaand Kumar Gohain expressed concerns about the slower and more expensive auction process, which he said could cause a cash flow crisis for the tea industry, particularly for small growers who depend on quick sales.
“Direct sales can be completed within a week of production, whereas auctions can take 3 to 4 weeks or longer, causing financial strain,” Gohain explained.
He also pointed out that the Guwahati Tea Auction Centre (GTAC) lacks sufficient facilities and buyers for a 100% auction of made tea, potentially leading to lower prices for tea produced in bought-leaf factories.
Conversely, the All Assam Small Tea Growers Association (AASTGA) supports the notification, believing it will bring transparency to the price-sharing system and ensure fair prices for green leaves from bought-leaf factories.
Rajesh Kumar Dutta, AASTGA general secretary, stated that over 1,25,484 registered small tea growers and 20 lakh people involved in the industry would suffer due to the shutdown of bought leaf factories.
A high-level meeting with state chief secretary Ravi Kota failed to resolve the issue, with bought leaf factory owners standing firm on their demand for the notification's cancellation.
Small growers in Dibrugarh and Tinsukia districts of Assam have been hit hardest by the situation, although some factories in Central and Lower Assam remain operational and continue to procure green leaves.
Dutta emphasized that the mandatory auction would ensure transparency and fair pricing, countering claims that small growers use banned pesticides.
He called for the factories to resume operations and warned of potential protests, including a sit-in demonstration on June 3 and a road blockade on June 5, if their demands are not met.