Jorhat, Aug. 30: The tea industry in Assam is facing one of its worst crises this fiscal with prices of made tea declining, exports and production falling and cost of production increasing.

Prabhat Bezboruah, vice-chairman of Tea Research Association, said the industry "is passing through yet another crisis due to a decline in both price and crop in the current year. This is coupled with increase in labour costs and practically all other input prices".

He said in the absence of restructuring, the tea industry was becoming unsustainable and the best option was to nationalise the set-up.

Painting a grim scenario, Bezboruah said climate change had distorted the rainfall pattern in Assam with the entire year's quota being deposited in the first seven months while August onwards it becomes unseasonably dry.

"Temperature of 39 degrees Celsius, at which level the tea bush shuts down, is common nowadays. If the weather continues in this line, tea yields will show a dramatic decline," he added.

He further said major blenders and packers were resorting to blend rationalisation, which means buying cheaper teas for the blend to bring its average cost down.

"Hence we see a scenario where low-priced teas, such as those from south India and Cachar, are up in price by Rs 10 to Rs 22 per kg whereas high quality Assam teas are down by Rs 30 to Rs 50. This trend does not augur well for the industry, as it sends a signal that quality does not pay," he said.

Amitabh Barooah, who runs Kolakota tea estate near Sonari in Sivasagar district and is a member of the Assam Tea Planters' Association, said with the increase in wages of labourers, staff and sub-staff, there is simultaneous increase in bonus and leave wage, which increases cost of production.

Besides, he said, tea estates now have to give ration, which was earlier subsidised by the government, increasing cost of production.

"Earlier, we used to pay about Rs 8 for a kg of rice and Rs 10-12 for a kg of flour but now we pay about Rs 20 and Rs 23 respectively when buying from the open market. This has increased costs tremendously." Labourers buy this rice and flour for 50 paise each.

In West Bengal, Bezboruah said, the government supplies foodgrain to each garden at Rs 3 per kilo and designates the manager to distribute the agreed quantum to workers.

"When the industry visited former chief minister of Assam Tarun Gogoi to cite this glaring inequality between Assam and Bengal, he dismissed it," Bezboruah said.

The TRA vice-chairman said it was proving difficult to get sufficient workers at the current wage level.

"Unless wages increase is linked with productivity, the industry can hardly bear any further load, as each rupee increase in wages results in a 60 paise increase in cost of production in a typical garden. At the current productivity level of 2.2kg per manday, the industry is clearly unsustainable unless drastic restructuring is done," he added.

North Eastern Tea Association adviser Bidyanand Barkakoty, affirming that the industry was in dire straits this year, said most buyers and packagers of tea had not maintained a stock this year and there was a possibility of prices rising in September as the overall shortfall in production in August could be 20-25 per cent.

A supplier of green leaf said its prices had come down to Rs 17-18 compared to last year when it was Rs 19-20.

"In the absence of coordinated steps to revamp the industry from within, by the labour unions and the government, perhaps the best solution would be for the government to nationalise the entire industry. This will solve the problems that the industry constantly faces in Assam," Bezboruah said.