Guwahati: The Union government has ruled out any proposal to introduce a minimum sustainable price (MSuP) for tea or green leaf, despite persistent demands from the tea industry and small growers’ associations seeking price protection amid rising production costs and volatile auction rates.
A minimum sustainable price is viewed as a cost-linked floor price designed to prevent distress selling without involving direct government procurement. Until recently, the tea industry had been advocating for a Minimum Support Price (MSP), which applies only to commodities that the government directly procures.
Responding to an unstarred question in the Lok Sabha recently, Minister of State for Commerce and Industry Jitin Prasada said that “presently, no such proposal is under consideration” to fix a minimum sustainable price for tea or green leaf. The question was raised by Congress MP from Assam, Pradyut Bordoloi.
Reacting to the reply, Bordoloi said the government’s stand ignores the vulnerability of small growers. “Tea leaf prices fluctuate sharply, leaving small tea growers anxious and exposed. Despite alarming price crashes, the government does not plan to establish a minimum sustainable price,” he posted on X.
The reply comes at a time when industry bodies, particularly from Assam, North Bengal and the Nilgiris, have repeatedly flagged a widening cost–price mismatch, arguing that unchecked market volatility has severely impacted the livelihoods of small tea growers, who now account for over half of India’s tea production.
Instead of a minimum sustainable price, the government said it has put in place a Price Sharing Formula (PSF) through the Tea Board of India to ensure fair price realisation, especially for small growers. Under the PSF, the sale proceeds from made tea are shared between growers and manufacturers in a fixed ratio, calculated on the cost of producing green leaf and made tea.
To operationalise this mechanism, district-wise green leaf prices are fixed based on average auction rates and notified periodically. Payment compliance is monitored by District Green Leaf Price Monitoring Committees, headed by District Magistrates.
On the question of shifting tea from the ambit of the Ministry of Commerce and Industry to the Ministry of Agriculture and Farmers’ Welfare—a key demand linked to extending MSP coverage—the government said no such proposal is under consideration.
However, the Centre highlighted existing financial support under the Tea Development and Promotion Scheme (TDPS), which provides assistance for replantation, nursery development, organic certification, formation of SHGs and FPOs, and training programmes to improve productivity and quality.
For value addition, the Tea Board offers capital subsidies for SHGs and FPOs to set up mini tea factories. Financial assistance covers 40% of machinery and civil works, capped at ₹33 lakh per unit (excluding land cost). For SC/ST applicants, the subsidy rises to 50%, with a ceiling of ₹50 lakh.
Industry stakeholders, however, maintain that while such schemes offer partial relief, the absence of a minimum sustainable price framework continues to expose growers—particularly smallholders—to market shocks, reinforcing calls for deeper structural reforms in tea pricing.
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