Even as tea production in Assam reached an all-time high in 2019, this has only added to the troubles of the state’s 180-year-old tea industry by creating a situation of oversupply.
In fact, as reported by The Telegraph, the Northeast office of the Tea Board of India has issued show cause notices to 101 tea manufacturing units that have produced tea in excess of the permitted capacity. Each manufacturing unit has a permitted capacity that is mentioned or fixed against its registration certificate issued under the Tea (Marketing) Control Order (TMCO).
The 101 manufacturing units under the scanner—of which 56 are bought leaf factories while 45 are estate factories—have to explain the reason for producing more tea than permitted by the Board and to show cause of action for suspension of registration should not be initiated against them (as provided under the Tea Act 1953 and TMCO 2003).
As per the TMCO 2015, no registered manufacturer is supposed to increase production capacity of the existing factory without prior intimation and obtaining a ‘no objection certificate’ from the Board.
In 2019, Assam produced a whopping 715.79 million kg of tea—which is 51.5% of the all-India tea production that year. In 2018, Assam had produced 691.91 million kg of tea.
The total tea produced in the country in 2019 was 1389.7 million kg (big growers contributed 704.62 million kg and small growers 685.08 million kg, as per the news report). In 2018, the countrywide production was 1,338.63 million kg.
While tea production in Bengal too rose by 30.06 million kg in 2019 (from 394 million kg in 2018), in Southern India, production decreased by 5.83 million kg in 2019 (from 224.87 million kg produced in 2018).
“In one case, a unit had produced 50,000 kg tea in excess of its permitted capacity. Another had produced 6 lakh kg in excess while yet another produced more than 20 lakh kg excess tea,” a source from the state’s tea board told The Telegraph.
“We capture the data of annual production figure from return records and compare it with the permitted capacity,” the source said.
The show cause notices were issued over the past month and are still continuing.
A senior official of the Tea Board told The Telegraph, “The Tea Board has taken various initiatives to ensure quality tea production by tea manufacturing units of the Northeast, including monitoring whether the tea manufacturing units are complying with its orders. As a follow up, we have asked various factories to explain the reason for manufacturing more tea than permitted by the Tea Board.”
The huge production has led to a severe imbalance between demand and supply and the prices have crashed—some teas are selling for as low as Rs 60 in the Guwahati Tea Auction Centre.
This oversupply is one of the reasons for such low realisation of prices at the farm-gate level this year. But the state’s tea industry—which employs lakhs of people— has been severely stressed for a while due to rising costs of production, decline in exports and price stagnation over the past many years.