The Hindu Business Line : Rival tea sector groups bury the hatchet

CRISES make the worst of foes turn into best of friends. This was witnessed last weekend when the warring groups of tea producers and tea buyers sat down for an informal but cordial discussion on the future of the industry.

In fact, there is no shortage of woes for the tea industry. On domestic front it is suffering from falling auction prices, huge labour cost, over production, value added tax (VAT) and cheap imports among others.

At the international level the industry's worst problem is declining exports. The only ray of hope, till a few weeks back, was offered by none other than Iraq, the tea trade with this country increasing by almost 180 per cent in 2002-03. But now war has erupted and things have turned decidedly gloomy.

All these crises are set against the backdrop of the controversial Tea Marketing Control Order (TMCO) 2003, formulated by the Union Government for bettering the industry's fortunes.

Though it welcomed immediately by the producers, still it was strongly opposed by the buyers and traders. Then followed the strikes, dharnas and litigations.

After witnessing such turbulent times for almost three to four months, different sections of the industry decided enough is enough.

Probably for the first time leading producers and buyers of tea carried out an informal but significant discussion among themselves on the different problems of the industry and ways of sorting them out.

Industry sources said representatives from Goodricke, J Thomas, Wagh Bakri and others were present at that meeting and talks mostly revolved around tea exports to Iraq, sales tax and VAT, quality of Indian tea, TMCO and over production.

"It was supposedly the first such discussion between the tea producers and buyers after all the hype and hoopla over TMCO. It appeared that the animosity that grew between the buyers and the producers over TMCO was no longer there,'' a leading tea buyer present in that meeting told Business Line.

All present in the meeting came to the conclusion that it is "high time to stop the infighting'' and every section of the industry should come together and "iron out their differences''.

Everyone accepted that this is the most positive development in the recent times.

According to sources, everyone felt the immediate concern of the industry is the Iraq War. Exports to Iraq in 2002-03 went up to 40 million kg against a meagre 14.4 million kg 2001-02. Everyone apprehended that the war would seriously jeopardise Indian tea exports.

"The common belief was that if exports to Iraq are hampered then the beleaguered South Indian tea industry will be in greater trouble and in turn it will affect the entire domestic tea sector,'' sources said.

Introduction of VAT and other problems relating to sales tax was also discussed. The role of bought leaf factories in the current crisis was debated too.

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