The Confederation of Indian Small Tea Growers Associations (CISTA), representing over 2.4 lakh small tea growers who produce 52% of India’s tea, has urged Commerce Minister Piyush Goyal to establish a transparent price discovery mechanism to ensure fair returns. In a letter, CISTA proposed a price protection scheme akin to the minimum support price (MSP) and a revised price-sharing ratio between growers and factories, modeled on Sri Lanka’s system where surplus auction earnings are split equally.

CISTA president Bijoy Gopal Chakraborty highlighted the sector’s chronic low price realization, with green leaf prices at Rs 22-25 per kg against a production cost of Rs 17-20, leaving growers with a mere Rs 5 margin. Agents’ Rs 2 per kg commission further cuts profits, prompting calls for direct factory sales.

A 2023 status paper submitted to the Commerce Ministry detailed these structural issues, urging a shift from the current minimum benchmark price to a sales-value-linked model.

The Tea Board’s 2004 Price Sharing Formula (60:40 ratio) has failed due to lack of transparency, with only 5% of India’s tea sold via auctions compared to Sri Lanka’s 95%. With 1.5 million livelihoods at stake, CISTA seeks urgent reforms to sustain the sector.

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