The Tea Board on Thursday asked the industry to devise its own software for reforming the present auction system, saying that the regulator would not interfere in the process.
“Regarding the reform of the auction system, I would like to say that the Tea Board will not interfere in auction system and things like development of a new software would have to be done by you.. but we will assist you,” Tea Board deputy chairman Arun Kumar Ray told the industry at the 135th AGM of the Indian Tea Association.
Earlier outgoing ITA chairman Azam Monem had flagged the facilitation of auction reforms as one of the four issues for the Union Commerce Ministry and the Tea Board.
Mr. Ray advised the industry to go for product differentiation and rise in productivity to improve the industry’s sustainability.
Union Commerce Secretary Anup Wadhwan noted that tea producers were facing challenges due to financial viability issues. Stressing the need to brand and market itself, he said that quality interventions through value-addition, keeping the modern age in mind, was the need of the hour.
The industry also needed to benchmark itself against international standards.
Mr. Monem said that the auction system, which was digitised in 2007, needed to be reformed to increase efficiencies. He also said that the mandatory 50 % sale through auctions needs to revoked to enable the industry to derive maximum value for its product. He said that as part of the auction reform process, the Tea Board had recently tasked the ITA to engage an expert to work out solutions . He noted that while the retail market has nearly double by value, prices have remained flat at the farm-gate level for nearly five years.
He also sought increase in subsidy on production of orthodox saying that incentivisation and hand holding by government were crucial for increasing exports. Increased production of this high high-value tea will enable India to compete better with countries like Sri Lanka which has a major presence in Russia, Iraq, Libya and Syria. This, along with green tea, accounts for 50% of world tea demand. He was saying this in the perspective of increasing exports volume and value to at least 300 million kg valued at over ₹7,000 crore from around from 250 million kgs exports valued at around ₹5,000 crore