TEA & TEA prices ?

Mrs.Anitha Gokul has put the ills that are affecting the ‘TEA FRONT’ in a very clear and elobarate way [ given below] in the forum under ‘Nilgiri Issues’.I feel it needs our urgent attention and action. And hence I am reproducing it under Badaga Community should it escape the readers’ attention.The ‘brokers cartel’ with some gullible bought tea factory owners have ruined a generation now.Your views require the immediate attention of all those ’small’ tea growers - especialy Badagas whose lives have been very closely linked to tea and tea prices.It is high time, we TAKE SOME ACTION AT ONCE !!

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Anitha Gokul writes in badaga.org

RIGHT TO INFORMATION ACT, 2005 FOR BETTER TEA PRICING

Dear members,

I am opening up an old issue of tea price vis-a vis the official apathy of the Tea Board of India for allowing tea prices to be quoted at low prices artificially due to the unholy nexus between the tea brokers and the Tea Board officials; nexus between the tea brokers and the tea buyers; thereby inflicting pain and hardship to lakhs of tea growers and tea manufacturers. So please spare a few moments to read the following for the cause of our people.We all accept that the tea price is affecting the livelihood of the people of Nilgiris and Badagas in particular. We have been channeling our energy against the Government of TamilNadu and were happy if the State Government gave us a paltry sum in the name of subsidy. It is high time we think beyond such short-term measures and analyze the real cause of low tea price.Lakhs of tea growers are dependent upon about 170 tea factories in Nilgiris. The tea manufactured in the factories is being sold through only 7 or 8 tea brokerage firms. Numerous buyers purchase the tea, which are distributed within India and are also exported. Thus one could see that the tea brokers hold the key to the tea industry.The retail price of tea is in the range from Rs120- 200/kg or more. The auction price of tea at Coonoor is below Rs.50/kg. So what has happened to the remaining hundred Rupees? This is because of the nexus between buyers and tea brokers.Almost all the tea factories have borrowed few lakhs of Rupees from the tea brokers to start the factory without understanding the consequences of the exorbitant interest charged. The compounded interest charged is about 36% per annum. Thus tea factories have been forced into a debt trap and have become mute spectators as the tea brokers decide the price of tea. About 100 factories are shut down in Nilgiris as they are not able to withstand the high interest rate. The tea growers are the real sufferers in this whole process as they depend upon the factories for tealeaf rate. Since tea factories get less value for the tea sold, they are forced to reduce the rate of tealeaf. Thus about 8 tea brokers through a hundred and odd factories are exploiting lakhs of tea growers.

Thus the crux of the issue of low tea price lies in the fact that tea factories are in a debt trap of the tea brokers.

The Tea Board of India is the licensing authority for the tea brokers. As per the licensing norms, no tea broker is supposed to lend money to any tea manufacturer. In violation of this, the tea brokers have been charging exorbitant interest from the tea factories. The Tea Board officials have been showing a blind eye to this social evil, which needs to be questioned by each one of us. Unless this violation is set right, the price of tea is not going to improve.

The important tool available with each one of us to make the Tea Board officials take action against the tea brokers is the Right to Information Act, 2005.

Some questions that could be asked are:

1) Are tea brokers entitled to lend money to tea manufacturers? If yes, under which norm/rule/act. Please furnish a copy of the same.
2) Are tea brokers lending money to tea manufacturers?
3) Is Tea Board aware that tea brokers are lending money to tea manufacturers at exorbitant rate of interest?
4) If tea brokers are not entitled to lend money to tea manufacturers, what is the action taken by Tea Board against tea brokers.
5) If the Tea Board officials against the tea brokers do not take action, please furnish the names of the erring Tea Board officials.
6) What action has been taken against the erring Tea Board officials?

By seeking information under RTI, we can activate the whole Government machinery, as they are supposed to furnish information within 30 days from the date of application. Many applications should be sent to Tea Board so that the issue will not die and we can accomplish many things, which we cannot achieve through courts, etc.

My only wish is that there should be more discussion on this subject so as to take it to a logical end, as I believe that as learned members of our community we can achieve justice. A lot of things have been happening in the scene where the Central Bureau of Investigation, National Human Rights Commission, Chief Vigilance Commissioner have been alerted, which will be elaborated during our course of discussion.

As per licensing norms of the Tea Board of India, tea brokers are not supposed to lend money to tea factories. In violation of these norms, money is lent. This violation is going unabated because the tea board officials are not taking action against the tea brokers. By questioning the officials, we can force them to take action on tea brokers. Once that happens, then tea brokers will not have the guts to harass tea factories and pull them to courts. By this we can liberate the tea industry from the clutches of the brokers and see bouyancy in the tea leaf rates for sure.

Tea brokers have very deep pockets to overcome any hurdle that might come in their way. So the only option left with us is to hold officials responsible for their negligence of duty. I have sent three seperate applications under RTI today. A copy of these are as follows. I would appreciate if more members would send similar letters or better versions so as to put pressure on the officials concerned, which would cost a mere ten Rupees.

To
1.Shri. Basudeb Banerjee I.A.S., Chairman, Tea Board of India, 14, B.T.M. Sarani ( Brabourne Road), Kolkota 700 001.
2.Shri. R.D.Nazeem, Executive Director, Tea Board of India Zonal Office, Post Box No: 6, Coonoor 643 101 Nilgiris, Tamil Nadu.
3.Sri. Raj Singh, Director, Room No: 225, Udyog Bhavan, Dept of Commerce, Ministry of Commerce and Industries, New Delhi 110 011.
Sir,
Sub: Application under Right to Information Act, 2005
Please find enclosed a Postal Order for Rs 10/- with a request to furnish the following information under Right to Information Act, 2005.
1) Are Tea brokerage firms entitled to lend money to tea manufacturers? If yes, under which norm/rule/act? Please furnish a copy of the same.
2) Are tea brokerage firms lending money to tea manufacturers?
3) Is the Ministry/Tea Board of India aware that tea brokerage firms are lending money to tea manufacturers at exorbitant rate of interest?
4) If tea brokerage firms are not entitled to lend money to tea manufacturers, what action the Ministry/Tea Board of India against tea brokerage firms has taken?
5) If the Ministry/Tea Board officials against the tea brokerage firms do not take action, please furnish the names of the erring Ministry/Tea Board official or officials.
6) What action has been taken against the erring Ministry/Tea Board official or officials?
7) Who is the authority responsible to take action on the erring official/officials?

If no action has been taken, what action has been taken against the authority responsible to take action?
9) Please furnish a copy of the licensing norms for Tea brokers.
10) What is the action taken by the Ministry/Tea Board of India to improve the system of getting better price for made tea?

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Central Bureau Of Investigation requesting to investigate into the fraudulent activities of Tea Board.

To
The Superintendent of Police,Economic Offence Wing, Central Bureau of Investigation, Rajaji Bhavan,Besant Nagar,Chennai-600 090.
Sir,
Sub: Large-scale economic offence in tea industry –regarding.
Ref: 1) My application under RTI Act, 2005 to Secretary & CPIO, Tea Board of India dated 11-02-2008.
2) Secretary & CPIO, Tea Board of India’s reply letter No. MISC/LC/2007/1315 dated 27th February 2008.
3) My application under RTI Act, 2005 to Secretary & CPIO, Tea Board of India dated 06-03-2008.
4) Secretary & CPIO, Tea Board of India’s reply letter No. MISC/LC/2007/108 dated 17th April 2008.

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With regard to the above subject and references, I would like to bring the following for your kind information and necessary action.
The Tea Board of India is a regulatory body for the tea industry like the Securities and Exchange Board of India (SEBI) for the stock market. Unlike SEBI which does not allow Stock Brokers to advance money to sellers of shares, bonds, etc and charge interest from them till its realization, the Secretary of Tea Board of India has openly declared that claiming of interest by Tea Brokers from tea manufacturers is not a violation. This trade practice is one of the main reasons for huge difference between the auction rate and market rate for tea in India. Thus Tea Board has allowed Tea Brokers to earn by means of both commission and interest. Neither the tea growers nor the consumers are benefited. There is a loss of crores of Rupees in terms of evasion of sale tax, income tax, etc to exchequer in the trade of tea. The Tea Board of India has not taken any action. However, in the case of stock market, the buyer and the seller buy and sell shares at the same rates and the Stock Brokers only take commission for the transaction. The information obtained by applying under RTI Act, 2005 has exposed the role of Tea Board of India in this illegal trade practice, which has completely ruined the tea industry in India.

In reply to my application under ref (1), copy of which is enclosed as Annexure-1, the Secretary & CPIO, Tea Board of India under ref (2), enclosed as Annexure-2, has informed that no Tea Brokerage Firms are entitled to lend money to any tea producing company or tea estate in accordance with the clause 21 of the Norms for licensing of Brokers in Public Tea Auctions. He has further informed that Tea Brokerage Firms may make advance payments to tea manufacturers against tea for sale in the relevant Auction Center and/or against sold tea-awaiting payment of prompt in accordance with the clause 21 of the Norms for Licensing of Brokers in Public Tea Auctions.
Vide ref (3), copy of which is enclosed as Annexure-3, it was requested to provide information as to whether Tea Brokerage Firms can charge interest on the advance payments made to tea manufacturers against tea for sale in the relevant auction center and/or against sold tea awaiting payment of prompt in accordance with the clause 21 of the Norms for Licensing of Brokers in Public Tea Auctions.
Vide ref (4), copy of which is enclosed as Annexure-4, the Secretary & CPIO, Tea Board of India has replied that claiming of interest by the Tea Brokerage Firms on advance payments made to tea manufacturers is not a violation of the norm stipulated for broker by Tea Board since such norms do not specify that advance should be interest free.
The reply given by the Secretary & CPIO, Tea Board of India, vide ref (4) is contradictory to the reply given vide ref (2). While vide ref (2), it is mentioned that Tea Brokerage Firms cannot lend money to tea manufacturers as per Clause 21 of the Norms for Licensing of Brokers in Public Tea Auctions; vide ref (4), it is mentioned that claiming of interest by the Tea Brokerage Firms on advance payments made to tea manufacturer is not a violation of the norm stipulated for broker by Tea Board since such norms do not specify that advance should be interest free.

The reply given by the Secretary & CPIO, Tea Board of India is misleading. Under the circumstances, the following questions arise:
1. If Tea Brokerage Firms are not entitled to lend money to tea manufacturers, but can claim interest on advance payments made to them, what is the difference between lending and advance payments in clause 21 of the Norms for Licensing of Brokers in Public Tea Auctions?
2. If the norms do not specify that advances made to the tea manufacturers by the Tea Brokerage Firms should be interest free (as replied by the CPIO vide ref (4)) and the clause 21of the norms clearly specifies that Tea Brokerage Firms cannot lend money to tea manufacturers but can only advance against the tea to be sold in the relevant Auction Center and/or awaiting payment of prompt, why is the Tea Board not interpreting the norm that Tea Brokerage Firms should not charge interest on the advance payments to the tea manufactures?
3. Is Tea Board of India abetting the Tea Brokerage Firms in circumventing the clause 21 of the Norms for Licensing of Brokers in Public Tea Auctions and allowing the Tea Brokerage Firms to extract exorbitant rates of interest from the tea manufacturers?
4. If no, Have Tea Brokerage firms registered under Money Lender’s Act or Pawn Brokers Act? Is the income by way of interest been reflected in the annual turn over of the brokers, while submitting for renewal of their licenses up to 31st December of every year? Does Tea Board of India have the authority to accept the Tea Broker’s income by way of interest, while giving renewal for Tea Broker’s license every year?
These applications submitted under RTI and the replies furnished under the above said references are being keenly watched by thousands of tea growers and tea manufacturers on the Internet who are hoping for some respite. Hence, Lakhs of small tea growers are indirectly affected because of the existing trade practice. The regulatory body namely the Tea Board of India has completely failed in its duty to protect the industry for its own personal gains. Hence I request that suitable investigation may be taken in the interest of lakhs of tea growers and the industry.
Thanking you,
Yours faithfully,

(D.ANITHA) Haveri 22/04/2008

Copy submitted to:
1. The Director, Central Bureau of Investigation, Block No.3, 4th Floor, CGO complex, New Delhi-110 003.
2.The Superintendent of Police, Anti Corruption Bureau, Central Bureau of Investigation, Shastri Bhawan, 3rd Floor, 26 Haddows Road, Chennai 600 006.
3. The Chairman, Tea Board of India, 14, B.T.M. Sarani (Brabourne Road), Kolkota-700 001.

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