Tea Board will hold a meeting with planters for selling 100 per cent Darjeeling tea through auctions with the view to discover real price and stop unhealthy trade practices, an official said on Wednesday.
Spread across 87-odd estates in Darjeeling district of West Bengal, the region produces around nine million kilograms of tea and the majority of its annual production is exported.
"We will sit with the Darjeeling Tea Association (DTA) after Diwali and discuss the possibility of selling 100 per cent of Darjeeling tea through the auctions", Tea Board deputy chairman Arun Kr Ray said.
The main purpose behind this is to discover the real price of Darjeeling tea which has geographical indication (GI) tag, he told reporters here.
"There are mainly ten producers in Darjeeling. The move will help the garden owners to look after their labourers well as better prices will be discovered", Ray said.
Subsidies for orthodox tea production will continue, he said adding that the proposed arrangement is also aimed at stopping unhealthy trade practices in the form of traceability.
"Traceability of Darjeeling tea is a cause of concern and some doubts have been raised by Indian Tea Association (ITA)", he said.
Tea from a neighbouring country is being brought in and sold as Darjeeling being its origin, he said.
The Tea (Marketing) Control Order (TMCO) stipulates that 50 per cent of the crop should mandatorily be routed through the auctions though it is 100 per cent in Sri Lanka, he said.
"Quite a few tea gardens have agreed to the idea", he said.
Meanwhile, the board has made arrangements with e- auctions settlement bank- ICICI Bank- for providing 45-days credit to the buyers and also to facilitate bill discounting by the sellers.
Ray said this will help the tea industry to tide over the liquidity crunch, faced by it at present.
In a financial year, normally transactions worth Rs 6000 crore to Rs 7000 crore are being carried out through the e-auction route with default rate of four to five per cent, the industry sources said.
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