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Tea Board rethink over auctions

The present auction scenario in north India represents 'a failure of the system' as the purpose of discovering a fair price has been defeated

By PTI in Calcutta
  • Published 17.02.20, 12:16 AM
  • Updated 17.02.20, 12:16 AM
  • a min read
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The Tea Board's role should only be restricted to issuing licences for opening up the auction centres after duly checking their financial capabilities. (Shutterstock)

Tea Board chairman P. K. Bezbaruah said on Sunday that the statutory body should disassociate itself from the functioning of the age-old auction system and usher in a liberalised regime where private parties can enter.

He said that the Tea Board's role should only be restricted to issuing licences for opening up the auction centres after duly checking their financial capabilities.

“It is the right time that the Tea Board disassociates itself from the functioning of the auctioning system and be just a licencing body,” Bezbaruah said.

The present auction scenario in north India represents “a failure of the system” as the purpose of discovering a fair price has been defeated, he said.

Bezbaruah said according to the Tea (Marketing) Control Order, or TMCO, 50 per cent of the produce has to be mandatorily routed through the auctions.

A variety of tea is being sold at Rs 50 per kg or lower and even good quality primary tea fetches a price of Rs 60 a kg at the auction centres.

“The same tea when offered outside the auction is fetching prices that are higher by up to Rs 30 per kg,” he said.

“What I am now suggesting is that Tea Board should withdraw itself from the process and bring in a competitive environment where anyone with adequate financial strength and experience can set up such centres,” he said.

He asked why a system that is not benefiting the main stakeholders of the tea industry, the producers and the workers, should be subsidised by a government agency. “Is it only to benefit a limited number of traders and brokers?” he asked.