Archive · 7 Nov 2025
Tea Industry Divided Over Minimum Price Proposal for Green Leaves
Imagine farmers who grow tea leaves want to make sure they get a fair price for them.
Some big tea groups are asking the government to set a minimum price, like a rule saying buyers can't pay less than a certain amount for the leaves.
This would help the farmers earn a better living.
However, some people in the tea business think this might not work.
They say the companies asking for this rule are sometimes buying leaves for less money already.
They also worry that if the price of leaves goes up, the price of the tea we buy will also go up a lot.
Some suggest focusing more on getting people to drink more tea and making sure the tea is good quality, instead of just changing the price.
Leading Indian tea associations and grower bodies have jointly appealed to the Prime Minister to notify a minimum sustainable price (MSP) for green tea leaves.
The proposal aims to safeguard the interests of tea growers without requiring additional government financial support.
The tea industry is divided, with some welcoming the MSP proposal and others questioning its practicality and sincerity.
Critics point to instances where factories belonging to proponent associations are purchasing leaves at significantly lower prices than proposed.
Alternative suggestions include increasing domestic tea consumption and focusing on quality compliance rather than solely on pricing interventions.
- Who
- Leading tea associations and grower bodies in India, along with tea manufacturers and stakeholders in the tea industry.
- What
- A proposal for a Minimum Sustainable Price (MSP) for green tea leaves has been put forth by tea bodies, leading to division within the industry regarding its feasibility and effectiveness.
- When
- November 7 (appeal issued)
- Where
- Dibrugarh, Assam, India
- Why
- To safeguard the interests of tea growers and ensure fair prices for their produce.
Proponents of MSP
Critics of MSP
Ensuring Fair Prices for Growers
Proponents of MSP
Advocates argue that a Minimum Sustainable Price (MSP) for green tea leaves is necessary to safeguard the interests of tea growers and ensure they receive fair compensation for their produce.
Critics of MSP
Critics question the practicality and sincerity of the MSP proposal, pointing out that some member factories of the associations pushing for it are currently purchasing leaves at much lower prices. They suggest that these associations should ensure fair payment first.
Addressing Industry Challenges
Proponents of MSP
The appeal suggests that once an MSP is declared, no additional government support would be required, implying it's a self-sustaining solution for growers' welfare.
Critics of MSP
Critics argue that focusing solely on pricing interventions without addressing the demand side is not a viable solution. They advocate for increasing domestic tea consumption and improving quality compliance as more effective strategies.
Feasibility of Proposed Price
Proponents of MSP
A benchmark of Rs 35 per kg for green leaves has been suggested.
Critics of MSP
Critics contend that a Rs 35 per kg MSP for green leaves would lead to a finished tea price of around Rs 225 per kg, which is significantly higher than the current market prices of Rs 120-140 per kg for bulk teas. They warn this could cause market disruption.
- Appealing Bodies
- Indian Tea Association (ITA), Tea Association of India (TAI), Assam Tea Planters Association (ATPA), Confederation of Indian Small Tea Growers Association (CISTA), All Assam Small Tea Growers Association (AASTGA), All Bodoland Small Tea Growers Association (ABSTGA)
- Proposed MSP Benchmark
- Rs 35 per kg for green leaves
- Current Purchase Prices by Some Factories
- Rs 12-16 per kg
- Estimated Finished Tea Price with MSP
- Around Rs 225 per kg
- Current Market Price for Bulk Tea
- Rs 120-140 per kg
- Current Per Capita Tea Consumption
- 860 grams