Tea Yield Under-reported says India’s Commerce Ministry

NEW DELHI, India

India’s Commerce Ministry and the Tea Board of India are investigating a significant discrepancy in tea yield that has delayed release of the board’s tea production reports for August and September.

Over the past decade, India’s small tea growers have greatly increased overall planted tea acreage while land under cultivation on estates has increased by 2,224.72 hectares (5,500 acres) since 2007. Small growers now produce an estimated 26 percent of tea. Few of these growers are registered and many are not in compliance with reporting rules, say planters. They do, however, pay taxes.

How big is the discrepancy?

The Tea Board has estimated annual tea yields ranging from 950-990 million kilograms (kg) for the past decade. Last year’s harvest was estimated at 988 million kg.

A ministry official told India’s Daily News Analysis (DNA) that these figures may have undercounted actual yield by as much as a quarter bringing the tally closer to 1.2 billion kg, a calculation confirmed independently by World Tea News after consulting experienced planters.

Tea harvested by small growers and processed at bought-leaf factories “was not fully captured by the official figures all these years,” the industry insider told DNA. He said ministry staff chanced upon this anomaly while calculating the amount of tea produced backwards from the amount of taxes collected on made tea.

The Tea Act calls taxes of processed tea at 50 paisa per kg (there are 100 paise to the rupee which is currently valued at .02 cents USD making the tax about .01 cents per kilo). The sum collected by the central excise authorities is reportedly much higher than The Tea Board’s calculations which are based on plantation and bought-leaf factory reports.

Tea production rose from 949 million kg in 2005-06 to 976 million kg in 2011-12, riding on production efficiencies according to the Tea Board which estimated that 27,760 hectares (68,500 acres) were re-planted or rejuvenated.

DNA reported that once he learned of the discrepancy, Tea Board chairman M G V K Bhanu initiated a massive effort to arrive at the true picture by collating and cross-checking figures from multiple sources, including aggregating receipts of various taxes paid, apart from the tea cess, and even figures from various ports through which tea is exported.

To refine the country’s export figures the Tea Board recently notified 150 registered exporters that their license could be cancelled if they fail to send in monthly reports.

Improving the accuracy of export numbers and total yield will reveal a more accurate accounting of domestic consumption.

Source: DNA, the Tea Board of India

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