PRICE STABILISATION FUND FOR TEA – TOWARDS AN ALTERNATIVE APPROACH

Abstract

To assist the Small Tea Growers (STGs) during unrealistic price fall, the Ministry of Commerce and Industry has initiated Price Stabilization Fund (PSF), a participatory scheme where a price band is constructed around the average domestic auction price of made-tea, based on seven years, moving average of prices in international market. Though this scheme is in operation for the last 7-8 years, it has neither been able to reach the targeted number of STGs, nor to get popularity among STGs. To understand such poor penetration and low impact of PSF scheme, primary survey in major tea growing states in north east/ east India (Assam, West Bengal and Tripura) has been done. Based on the output of the survey and from the understanding of STG ecosystem and their need/ aspiration for a more dynamic PSF, a model has been designed that could have wider reach and acceptance among the small tea growers.