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C. Raja Rajeshwari
Kohinoor Mandal

Mr C. K. Dhanuka, Vice-Chairman, Indian Tea Association

Mr C. K. Dhanuka, Vice-Chairman, Indian Tea Association, and Chairman, Dhunseri Group of Industries, shares his views with Business Line on the outlook and issues ailing the tea industry and the industry's expectations from the Government.

Excerpts from the interview:

The Indian Tea Association status report shows a rosy picture for 2003 with imports declining, production increasing marginally and consumption increasing substantially. How do you think the year would turn out to be?

It is difficult to assess how 2003 would turn out to be for the industry, as exports have fallen in the first few months. Once exports pick up, the industry would do better. As the crop output is high, we do not know where to sell the teas. Now we are offering more varieties of tea. North India, for instance, offers 14 varieties. So, going forward, we think the enquiries would increase and end-2003 will be better.

The tea industry continues to function as it did about 30 years ago. Do you think a reluctance to embrace change is one of the key problems ailing the industry?

Yes, we are ready to change. We have been talking about changing our product offerings for the past two years. But for that we need greater help from the Government.

What are the expectations from the Government?

The Government has to look at the industry's problem seriously. In the last four years, nothing much has come from the Government. Excise duty of Rs 2 was imposed, of which, Re1 has been removed. But an additional duty has been imposed. No efforts have been made by the government as far as the industry is concerned. With 45-lakh people directly and indirectly involved in the industry, we are looking at much greater help from the Government. Tea industry has never asked for help in the past. The planters are unable to finance the total costs.

On what fronts are you seeking financial support?

Social cost is one. We are saying that it should be shared 50:50, by the Government and the plantation owners. The amount is high and so the Government is shying away from taking up the responsibility. In India, basic wages have increased. New plantations in Vietnam, Indonesia, Africa, and so on, have low wages. As far as the tea workers are concerned, there is no means of surviving, except in the tea plantations. There is greater responsibility on everyone, especially the grower and the Government, to take care of them. We have submitted proposals on all these issues, but the Government has not addressed them so far.

Tea auctions and private sales have existed together. Going forward, do you see changes in this?

Price has nothing to do with any system of sale — be it auction or private sales. The only thing is that if you sell through auction your costs are high. If you are producing tea that is worth selling to 100-200 people, then go for auction. If you do not produce good quality tea and the same is offered in auctions, then the prices would get take a further beating. If you are producing tea that cannot be sold to everyone, then sell it dispose it of quietly in private salesas this would fetch you a better price.

What are the steps the industry is taking regarding quality of teas?

Quality norms are governed by certain parameters. The re-processed tea manufactured in some places do not conform to quality norms. This has to be stopped. Re-processing is the process by which tea waste decreases and teas get more colour. As far as the quality is concerned, these teas are very much within the acceptable quality norms. It is a misconception that Indian tea is of inferior quality. Where 870 million kg is being produced, if 100 million kg is below quality norms, it does not mean that all Indian teas are so.

It is tea, which is purchased and exported as Indian tea, which is not of good quality. While there is so much tea being imported, there are no parameters in export-oriented units (EOUs) regarding the origin of the tea. The bad name is because of poor quality tea re-exported as Indian tea. We have already talked to the Commerce Ministry regarding this. One suggestion is that exported teas have a nameplate of origin. The Ministry is looking into the quality issue as well.

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