Tea Act, 1953 and DGLPMC: Whether Farm Gate Prices of Small Tea Growers (STGs) are monitored by agencies of State?

Dr. Abdul Hannan*

Geography and Size of Tea Economy

The tea economy today is mix bag of organized and unorganized sub-sectors and deviated from its classic characteristics of Estate Farming which was initiated by the colonial rulers in India. This sub-sectors within tea economy contribute 696.49 M.Kgs (51.59 percent) and 653.55 M.kgs (48.41 percent) respectively out of total of 1350.04 M.kgs (Tea Board, 2018-19). The 1990s has witnessed structural changes in tea economy and many small-scale farmers popularly known as Small Tea Growers (STGs) entered into tea cultivation. Earlier tea cultivation was confined to Assam, West Bengal, Tripura, Tamil Nadu, Karnataka and Kerala only and known as traditional tea growing states. This geography of plantations is changed now and one may find it in all hilly and mountainous states of North-East India and farmers are engaged in small-scale tea cultivation. Besides, the states like Bihar, Uttarakhand, Himachal Pradesh etc. also grow tea in the farming sector. The table-1 below demonstrates the distribution 15 tea producing states today. It is evident that in unorganized sector there are 210,225 STGs having tea area of 215,886.40 hectares. The average farm size is 1.03 hectares in India as a whole and highest size of farms exist in Nagaland with 6.79 hectares.. The highest numbers of STGs are found in Assam, Tamil Nadu and West Bengal in descending order. More than fifty percent STGs are situated in North-East India. There are 571 Bought-Leaf Factories (BLFs) situated all over the country and purchase green leaf from STGs (CISTA, 2019). The organized sector has 1569 tea estates with tea area of 420,670.60 hectares and average size of estates in 268.11 hectares in India. The average size of tea estates in hill states is relatively small particularly Himachal Pradesh, Uttarakhand, Meghalaya, Mizoram and Sikkim.

Table-1: Geography and Size of Tea Economy in India (2018-19)

Source: Computed from Tea Statistics, 2019

Tea Marketing Control Order (TMCO), 2013 and 2015 (Amended)

The expanded geography and changing structure has invited series of new policies and programmes and the Tea Board of India has responded such performance of the industry over time. Similarly, the newly entrant states are also trying to develop new institutions to look after the STGs in the respective states. In exercise of the power conferred by sub-sections (3) and (5) of section 30 of the Tea Act, 1953 (29 0f 1953), the Central Government modified the Tea (Marketing) Control Order (TMCO), 2003 and the Department of Commerce, Ministry of Commerce and Industry, Government of India has notified the TMCO, 2015 (Amended) vide S.O. 1012 (E) dated 15.04.2015 ordered the Tea Board of India to implement it and to form the District Green Leaf Price Monitoring Committee (DGLPMC) in each tea growing districts of the country to monitor the farm gate prices and green leaf being paid to the STGs on real-time basis. Consequently, the Tea Board of India has notified and implemented vide Ref. Law/08/2013 dated 21.05.2015. In the amended TMCO vide notification of S.O. 1012 (E) dated 15.04.2015 under section (9)30A is added in the principal order (TMCO, 2003) after paragraph 30 states as follows:

30A. District Green Leaf Price Monitoring Committee. – (1) There shall be a green leaf price monitoring committee in each tea growing district comprising of two representatives each from Bought-Leaf Factories, small tea growers and estate factories and one officer of the Board not below the rank of Assistant Director and the Collector or Deputy Commissioner of such tea growing district  shall be the ex-officio Chairman. The officer of the Board shall be the member secretary of the committee.

(2) The Registering Authority shall notify the constitution of the committee and the tenure of the committee shall be for three years from the date of such notification and the committee shall be reconstituted after the expiry of every three years.

(3) Upon the death or resignation of any member of the committee, other than the Chairman and officer of the Board, the Registering Authority can re-nominate new member from such category that the deceased or, as the case may be, resigned member represented and the tenure of such re-nominated member shall be for the remaining period, as if such death or resignation of the committee members has not happened.

(4) No member of the committee representing Bought leaf factories, small growers or estate factories shall be a member of two consecutive terms.

(5) The committee shall undertake the following functions, namely:-

(a) to monitor the average green leaf price payable to the small tea growers for each succeeding month based on the last month average auction price of Bought leaf factories of such district by applying price sharing formula as notified by the Registering Authority under the provision of paragraph 30;

(b) to oversee the compliance of payment of such average price to the small tea growers and bring to the notice of the Registering Authority about the errant Bought leaf manufacturer.

(6) The member secretary of the committee shall ensure to conduct at least one meeting of the committee in a month”.

As stated above in 30A, the primary responsibility of the DGLPMC is to ensure and monitor the green leaf price payable to the STGs for each succeeding month based on the last month average auction price of BLFs of such district by applying the price-sharing formula in existence notified by the Tea Board. The DGLPMC would also oversee the compliance of payment of such average price to the STGs and also to bring notice of Tea Board about errant BLFs. It has also been prescribed that the member-secretary of the DGLPMC shall ensure to conduct at least one meeting of the committee in a month. It is evident that all the 15 states where tea is grown and it pre-supposes that all these tea growing districts ideally should have formed DGLPMC and notified in each district as per the guidelines laid down in the above-mentioned order notified by Ministry of Commerce and Industry, Government of India. However, the field experience do not support such movement of Tea Board and its SROs which ensures fair leveling field to the STGs on the ground at district and sub-district level.

Implementation of Tea Marketing Control Order and DGLPMC

To understand the nature implementation the TMCO, 2015 (Amended) an application under the Right to Information Act, 2005 was filed to the Tea Board of India and reply was received on 30.12.2019. It has been transcribed that the DGLPMC are formed and notified in 28 districts of six states of India i.e. Assam, West Bengal, Tripura, Bihar, Kerala and Tamil Nadu (RTI dated 30.12.2019).  Out of 28 districts, 16 districts in Assam, three districts in Tripura, two districts in West Bengal and one in Bihar, the DGLPMC is constituted and notified in March 2016 and consequently their tenure expired  which is three years (RTI Appeal, dated 17.02.2020). In case of their reconstitution of DGLPMC the Tea Board is silent.  The districts are Baksa, Bongaigaon, Cachar, Charaideo, Dibrugarh, Goalpara, Golaghat, Jorhat, Karbi Anglong, Kokrajhar, Lakhimpur, Nagaon, Sivasagar, Sonitpur, Tinsukia, Udalguri in Assam, Dhalai, Unakoti and West Tripura in Tripura; Darjeeling and Uttar Dinajpur in West Bengal and Kishanganj in Bihar. As per the Tea Statistics (2019), there are 55 districts and 15 states where STGs are producing tea. Out of which 27 districts where there is no existence of DGLPMC and it is yet to be constituted and notified. The state-wise distribution of absence of DGLPMCs are found Arunachal Pradesh (8 districts), Assam (6 districts), Meghalaya (3 districts), Nagaland (2 districts), Tripura (3 districts), West Bengal (1 district), Himachal Pradesh (1 district), Kerala (1 district), Karnataka (1 district) and Tamil Nadu (1 district). As per records of Government of Assam, it has to be emphasized that the STGs are found in 27 districts in Assam (Hannan, 2019). But only 16 districts, DGLPMC are constituted and notified till date. All these have far reaching consequence to the labourers and laboring conditions engaged directly or indirectly Small-Scale Tea Economies in India which is estimated at 2.51 million people (Hannan, 2017). It has cascading impact to the local economy of the respective districts and regions in different states.

Table-2: Tea Production and Status of DGLPMC Constitution by the Tea Board (2018-19)

Source: Computed from Tea Statistics 2019 and RTI Reply of Tea Board dated 30.12.2019

Now if we look further down at district and sub-district level from field inputs, the situation is depressing. The Tea Board of India announces Minimum Benchmark Price (MBP) throughout India and it is more of ritualistic in nature. Since, the author was visiting field in different districts of West Bengal, had an opportunity to interact with the President of the Confederation of Indian Small Tea Growers Associations (CISTA) at Jalpaiguri. It has been understood that MBP of green leaf is announced based on auction price of CTC teas in a particular region. It is circulated over email to all the stakeholders in tea industry and bulk messages are sent to the STGs (who have smart card) over phone. However, this announcement does not confirm that the STGs are recipient of the prescribed price of Tea Board but it confirms the TMCO,2015 (Amended) vide notification of S.O. 1012 (E) dated 15.04.2015 under section (9)30A of clause 5 (a) which states that “to monitor the average green leaf price payable to the small tea growers for each succeeding month based on the last month average auction price of Bought leaf factories of such district by applying price sharing formula as notified by the Registering Authority under the provision of paragraph 30” . Here one prominent gap is identified that factory-wise price paid to the STGs is not notified or announced by the SROs of Tea Board in the concerned district which was in existences in 2005-06 (Hannan, 2019). As per mandatory provision of TMCO, 2013 under Clause (7), E-Form return is compulsory by each BLFs where actual price paid to the STGs is disclosed. This gives an opportunity to the Bought-Leaf Factory or Estate Factory an upper hand to hide the actual prices paid to the STGs in a particular month in a district and STGs are not aware of such provisions. Whereas the TMCO, 2015 (Amended) vide notification of S.O. 1012 (E) dated 15.04.2015 under section (9)30A of clause 5 (b) which clearly states that “to oversee the compliance of payment of such average price to the small tea growers and bring to the notice of the Registering Authority about the errant Bought Leaf Manufacturer”.Source: Computed from Tea Statistics 2019 and RTI Reply of Tea Board dated 30.12.2019

It has been reported in media time and again that the STGs are paid less than MBP of green leaf in North Bengal, particularly the district Uttar Dinajpur, therefore it is chosen to study by the Author. As per the Secretary, Uttar Dinajpur Small Tea Growers Association, the DLPMC is failed to deliver its responsibility and STGs are paid Rs.3-4 per kg green leaf and lower than production cost (Uttarbanga Sambad, October 2017). In May 2018, the MBP of green leaf was Rs. 14.36 (Darjeeling), Rs.15.31 (Jalpaiguri), Rs.14.20 (Uttar Dinajpur) and Rs. 9.40 (Cooch Behar) in West Bengal (Uttarbanga Sambad, May 2018). During the said month, STGs were receiving Rs.12-13 per kg green leaf in Jalpaiguri and Rs.6-9 per kg green leaf in Uttar Dinajpur. Again in August 2018, the MBP of green leaf was Rs. 13.58 per kg in Uttar Dinajpur but the STGs were receiving Rs.8-10 per kg green leaf (Uttarbanga Sambad, August 2018). To have deeper understanding the impact of DGLPMC, the author made an attempt to visit the Collector’s Office headquartered at Raiganj, Uttar Dinajpur. The concerned officials of District Collector were met and interacted (2018). It is transcribed that very few meetings were held since the formation of the DGLPMC and even do not have monthly MBP notifications in their records. Only one monthly meeting minutes and proceedings dated 22.07.2016 of DGLPMC were found on records that it was mentioned that STGs were paid less than price-sharing formula and leaf trade occurs through middlemen (FAO-Islampur, Tea Board dated 22.07.2016). It is further stated that Factory-wise Green Leaf price paid to the STGs are not notified in the district and are not kept on record. Whereas the TMCO vide notification of S.O. 1012 (E) dated 15.04.2015 under section (9)30A of clause (6) states that “the member secretary of the committee shall ensure to conduct at least one meeting of the committee in a month”. While interacting with the STGs in different parts of the district Uttar Dinajpur, it was noticed that they have not heard of DGLPMC though there is a sub-regional office of the Tea Board situated at Islampur Town of Uttar Dinajpur. It gives an impression that the TMCO makes mandatory provisions to oversee the farm gate prices in every tea growing districts of the country yet its implementation is doubtful. The SROs of Tea Board should be accountable to convene monthly meetings compulsorily, records of minutes of the said meeting under the Chairmanship of the Collector or Deputy Commissioner and should create district-level database and report to various authorities of Tea Board. The SROs and Officers of Tea Board as Member-Secretary should ensure to notify and publish the Factory-wise monthly green leaf as per E-Form under the provision of TMCO in the districts and maintain the records of such notifications at Collector or Deputy Commissioners Office and circulated to all stakeholders in the respective district on monthly basis. It is also found among the four districts in North Bengal the price realization of green leaf is lowest in Uttar Dinajpur in comparison to other districts of North Bengal. The adjacent district of Kishanganj in Bihar is the only tea growing district and recipient of lowest price of green leaf even after Uttar Dinajpur of West Bengal. There is a mismatch of top-down approach of monitoring the farm gate price and the ground information from below which is found in four districts in North Bengal and one in North Bihar. The field experiences also suggest that wherever there is an existence of active and functional Small Tea Growers Association, the price of green leaf is better in compare to counterpart of the same district.

In April 2013, the Tea Board of India constituted Small Growers Development Directorate (SGDD) headquartered at Dibrugarh and 12th Plan outlay of 200 crores was approved for Small Growers Development under Tea Development and Promotion Scheme (62nd Annual Report, Tea Board). There are 67 sub-regional offices (SRO) are established in all small tea growing districts in India under the SGDD with an objective to provide technical knowledge to the tea farmers, monitor green leaf prices, farm inputs and quality production. The SROs are situated Assam (39), Tripura (3), Mizoram (1), Arunachal Pradesh (1), Meghalaya (1), West Bengal (15), Bihar (2), Uttarakhand (1), Tamil Nadu (3) and Kerala (1). All the SROs are headed by Development Officers, Factory Advisors and Assistant Directors of Tea Development. It is reported that during 12th Plan, 400 SHGs are planned and 346 SHGs are formed in different states. It has been stated that a total of 174 STGs are benefitted and 6.12 crores of rupees are spent (63rd Annual Report, Tea Board). It is further stated that the Ministry of Commerce and Industry (PIB, 2019) that the Tea Board of India spent for the development of STGs under Tea Development and Promotion scheme of Rs. 8.05 crores (2016-17), 14.00 crores (2017-18) and 20.45 crores (2018-19). However, the desirable results and proactive role of the efforts is not evident and impact on farm gate price on ground. The fate of STGs did not change and they are still at the mercy of BLFs and Estate factories and trade relations are yet to bring expected results (Hannan 2019). It is also found that the SROs of Tea Board have casual approach of their extension services and factory-wise green leaf prices paid to/received by STGs are not notified on monthly basis. Even though SROs are established small tea growing districts and regions, they hardly disseminate the factory-wise list of actual price of green leaf paid to the STGs. This is authentic violation of Tea Act and TMCO and evidence of policy paralysis and regional inequalities exist in tea supply chain across districts. The role of Tea Board and its linkages with district administration to implement and monitor the farm gate price and to ensure better price to the STGs seems to be dismal. There are gaps in governance in each level beginning from district level monthly auction price (CTC) to MBP (Green Leaf) and effective decentralization of its implementation at the factory level actual green leaf price despite its mandatory provisions of 30A of TMCO, 2015 (Amended) under the Tea Act, 1953 (29 0f 1953). On contrary, the lowest unit of delivery of green leaf price in this case is the BLFs and Estate Factories situated in a particular district which is ultimately regulated by Tea Board of India. The SROs of Tea Board of India publish the list of BLFs and Estate Factories situated in a district which are engaged in green leaf trade and display it over the webpage of the Board. Hence, the Tea Board of India should ensure that factory-wise actual green leaf price paid to the STGs in a district are notified on monthly basis by SROs and all such records are kept in District Collector or Deputy Commissioners offices and disseminated among growers and other stakeholders in the district. This would make a meaningful attempt in monitoring the farm gate prices and differences can be identified between MBP and actual price as per E-Form under TMCO submitted to the Tea Board by the concerned BLFs or Estate Factory. Lastly, there are 27 small tea growing districts spread over 10 states where DGLPMCs are yet to be notified and the Tea Board should take proactive role to constitute the committee and notify as per provisions.

 * The Author is working as Assistant Professor, Department of Geography Central University of Sikkim Gangtok. The comments and suggestions may be sent at [email protected] / [email protected] .

References:

Anonymous, 2017. Farmers warn of Suicides: Lowest Green Leaf Price in North Bengal (Translated from Bengali), Uttarbanga Sambad dated 10.11.2017, p.11.

Biswas, T. 2018. Farmers are receiving Green Leaf Price (Translated from Bengali), Uttarbanga Sambad dated 28.08.2018, p.11.

Datta, S. 2018. Lowest Green Leaf Price in North Bengal (Translated from Bengali), Uttarbanga Sambad dated 09.05.2018, p. 8.

Government of India, 2003. Tea Marketing Control Order, dated 01.01.2003, Department of Commerce, Ministry of Commerce and Industry, New Delhi, pp. 1-31.

Government of India. 2015. Notification No. S.O. 1012 (E), dated 15.04.2015, Department of Commerce, Ministry of Commerce and Industry, New Delhi, pp. 5-7.

Government of India, 2019. Tea Gardens posted on 10.07.2019 by PIB Delhi, Ministry of Commerce and Industry, New Delhi. [Online available at https://pib.gov.in/PressReleasePage.aspx?PRID=1578137 accessed on 28.07.2020]

Hannan,  A. 2017. Livelihoods, Labour Market and Skill Development in Small Tea Growers (STGs) gardens in India with special reference to India’s North-East, Transactions, Vol. 39, No. 1, pp. 91-104.

Hannan, A. 2019. Farm Size and Trade Relations of Small Tea Growers (STGs) in Assam and North Bengal, Social Change and Development, Vol. XVI, No. 2, pp. 78-99.

Hannan,  A. 2019, The Place of Small Tea Growers (STGs) in Tea Production in India: Policy, Practice or Success, North Eastern Geographer, Vol. 40 No. 1 & 2, pp. 16-28.

Tea Board of India, 2015. Circular Ref. Law/08/2013 dated 21.05.2015, Tea Board, Kolkata.

Tea Board of India, 2016. Ref. No. SRO(FAO)/ISP/OC/08 dated 20.07.2016 & 22.07.2016, FAO-Islampur, Tea Board. Uttar Dinajpur.

Tea Board of India, 2016.  62nd Annual Report (2015-16), Kolkata.

Tea Board of India, 2017. 63rd Annual Report (2016-17), Kolkata.

Tea Board of India, 2019.  Ref. No. Law/RTI/APP/D.Hannan/92/2019/2032 dated 30.12.2019, RTI Reply of Tea Board, Kolkata.

Tea Board of India, 2020.  Ref. No. Law/RTI/App/A.Hannan/92/2019 dated 17.02.2020, RTI First Appeal Reply of Tea Board, Kolkata.