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Tea Board plans to revamp auction system 

Anupama Airy  
Wellington (Nilgiris), Oct 21: In order to improve the tea auction system in the country, the Tea Board of India is planning to undertake a study on the existing auction rules of different tea auction centres in the country.

In addition to this, the tea board has also planned to undertake another study on the patterns and trends of consumption and distribution channels for tea in the country. Both the studies will be carried out by the Indian Institute of Management, Calcutta (IIMC) at a total estimated cost of around Rs 15 lakhs.

Giving details, a member of the Tea Board said that the board, being the licensing authority, has been receiving representations from auction organisers, auction brokers, auction sellers and buyers seeking changes in the existing rules of different tea auction centres. The study would be completed within three months from the date of assignment of the work to IIMC, which may begin December, 1, 1999.

The terms of reference of the study includes looking at the existing rules of the six major tea auction centres in the country including Calcutta, Guwahati, Siliguri, Cochin, Coonoor and Coimbatore and to suggest changes wherever necessary to bring improvement in the auction system.

The study would also review the existing situation and suggest for improvement in the auction system based on specific points including auction date, catalogue, prompt date, brokers commission, size of lots, division of lots, withdrawal of lots, sale of outlots, distribution of samples, closing of catalogue, warehouse rent and insurance and jurisdiction of auction organiser on the location of warehouse, size of free trade samples, purchase sample-brokers sample, free sample distribution norms, buying of samples, responsibility of brokers, responsibility of auction organiser, categorisation of buyers and sellers.

Earlier a similar study on auction rules was conducted during 1985-86 under the chairmanship of the now Chairman SS Ahuja. This report will become the basis for the fresh study being undertaken by IIMC, the member said.

On the basis for the other study, the member informed that during 1994, the IIMC was entrusted to undertake a study on the `Total consumption of Tea in India, per capita consumption and related parameters as also the projection of total consumption for the period 1995-2001.

In the study, the IIMC had projected the total consumption of tea in the country during 2001 initially at 713 million kgs. However in the perspective of overall economic growth of the country, IIMC subsequently revised their projection of total consumption of tea during 2001 at 735 million kgs on the basis of per capital annual consumption of tea during the said year at 701 mkgs.

However, while one section of the tea industry consider the said projected per capita consumption is too high, other section of the tea industry is considering the said level as low. It is due to this confusion prevailing in the industry that the board has decided to undertake a further study to assess the internal consumption of tea besides studying the patterns and trends of consumption and distribution channels for tea in the country.

Not only on the basis of the reports received from the National Sample Survey Organisation (NSSO), but on the basis of field based sample surveys covering respondents from household consumer, institutional consumer, tea producers, tea packers, blenders, distribution channel members and other categories spread over different states.

This study would be completed within six months from the date of assignment. A draft report would be submitted based on the findings following which the final report would be submitted within three months after the submission of this draft report.

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