Press Information Bureau

Government of India

Ministry of Commerce & Industry

12-December-2012 17:41 IST

Base price has not been fixed for selling tea in Assam. Tea being a perennial crop, green leaf is harvested in Assam for nearly 9 months in a year from March-December. During this period, because of the seasonal variations, quality of the green leaf would vary from month to month. Keeping this variation in view, a Price Sharing Formula (PSF) has been notified by the Tea Board as per the provisions of the Tea (Marketing) Control Order, 2003 for ensuring equitable sharing of sale price of made tea between the suppliers of green leaf and the manufacturers. This formula takes into account the cost of production of Green Tea leaf by the small growers, cost of manufacturing made tea by the bought leaf factories, and the out-turn percentage (i.e. the ratio of conversion of ‘Green Tea leaf’ into ‘made tea’). Thus the green leaf price payable to the growers would be depending upon the market situation and the quality of the end produce and would vary from month to month. As per the notified formula for Assam, the net sale proceeds need to be shared in the ratio of 65: 35 between the growers and the factories when the price fetched by the individual factory remains either at par or lower than the state average. When the price fetched by the individual factory exceeds the state average, the differential is to be shared in the ratio of 50:50. This scientific formula is more helpful for the growers in realizing remunerative price for the green leaf in lieu of fixed base price.

This information was given by the Minister of State for Commerce & Industry Dr. D. Purandeswari in written reply to a question in Rajya Sabha today.

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DS/RK

Price sharing formula ensures equitable distribution of tea sale proceeds between green leaf suppliers and manufacturers. A fixed base price for green tea leaf in Assam is not prescribed; instead a Price Sharing Formula under the marketing control framework apportions net sale proceeds between growers and factories. The formula accounts for growers' cost of production, factories' manufacturing cost and the out-turn percentage, allowing monthly variation in green-leaf prices tied to quality and market conditions. When an individual factory's price is at or below the state average growers receive a larger share; any premium above the state average is shared equally between grower and factory.