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‘Wage hike, import duty cut might sound death knell of Assam tea industry’

“The tea industry is struggling to survive. The stark reality for the producers today is that the increase in cost of production has far outpaced the increase in price, making it progressively difficult for us to survive,"said Manoj Jallan, chairman of the North East Tea Association (NETA).

Written by Samudra Gupta Kashyap | Guwahati |
November 18, 2017 7:54:27 pm
'Wage hike, import duty cut might sound death knell of Assam tea industry' Women plucking tea leaves in Assam

Any “unreasonable” hike of wages of labourers, amending the Plantation Labourers Act and reducing import duty on tea could sound the death knell of the tea industry in Assam, Manoj Jallan, chairman of the North East Tea Association (NETA) said on Saturday.

Expressing apprehensions that the Assam government’s proposed move to revise wages of the tea workers, coupled with the Centre’s move to amend the Plantation Labour Act, Jallan also appealed to the state and central governments to give a closer look at the issues faced by the industry.

“The tea industry is struggling to survive. The stark reality for the producers today is that the increase in cost of production has far outpaced the increase in price, making it progressively difficult for us to survive. Any unreasonable hike in wages might sound the death knell of the tea industry in Assam, leading to closure of tea estates and throwing the industry into complete chaos, thereby jeopardizing the future of all stakeholders dependent on it,” Jallan said. He was speaking at the 18th biennial general meeting of the planters’ association in Golaghat, 300 kms from here.

Jallan also said that the reported move of the central government to reduce import duty on tea from the existing 110 per cent to 50 per cent by 2019 was yet another cause of worry for the Indian tea industry. “Reports appearing in the media regarding reduction of import duty on tea from 110 per cent to 50 per cent in 2019 is another cause of worry. The Tea Board is  humbly requested to impress upon the ministry to reconsider this decision in the interest of the Indian tea industry,” Jallan said.

Jallan also described the increasing contribution of the small tea growers segment to the overall Indian tea production as “intimidating”. “There has been a galloping increase in the contribution of the small tea growers segment to the Indian tea production. At the current pace, the so-called unorganized segment is soon likely to overtake the production of the organized sector. Their contribution, which stands at 44 per cent of the total production of the country, is already quite intimidating,” he said.

“When the small growers movement was in its infancy in the late 1980s and early 1990s, the organized sector did not even bother to visualize what was in store for it 2-3 decades hence. Neither did the regulating authority realize the enormity of what was likely to unfold necessitating appropriate monitoring of quality and quantity,” he added.

Pointing out that the unorganised segment had a “distinct advantage” over the organized sector in respect to their cost of production, especially in that the former did not have a massive wage burden, the NETA chairman also called for integrating the small tea growers segment for a win-win situation for all.

“The unorganised segment is at a distinct advantage over the organized sector with respect to their cost of production. While the organized sector often speaks of a level playing field, it is too late in the day for this level to be established. On the contrary, I would implore the organized sector to integrate this sector in their scheme of things and leverage it to rationalize and optimise their operational viability. Ingenuity and improvisation can only prove to be the mantras for survival,” Jallan said.

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