Normalcy has been restored in the Nilgiris which witnessed violent incidents on Monday last in the wake of a protest march at Uthagamandalam by small tea growers over the steep fall in the prices of green tea leaves.
Though there was still an undercurrent of tension in some pockets and majority of the small growers continued to abstain from plucking tea leaves the situation was well under control, according to Nilgiris district collector P Shivasankaran.
Even though tea auctions were held at Coonoor as scheduled amid tight security yesterday the refrain among the growers and the manufacturers was that brokers and buyers were reaping benefits at their cost.
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The agitating growers had stopped the auctions on the first day last week and they were cancelled on the second day.
As a direct fall-out of the violent incidents in which some police personnel were injured and several shops and vehicles were damaged in stone-throwing the district administration cancelled the much-awaited annual flower show scheduled for May 21 and 22. This is the first time that a flower show, a major attraction during the summer tourist season has been cancelled in the last 100 years.
Police reinforcements, including Rapid Action Force personnel, were rushed to Nilgiris from neighbouring Coimbatore and Erode districts to maintain law and order.
The small tea growers are demanding a minimum of Rs 15 per kg as support price against Rs 6 per kg which they are getting now, and a ban on cheaper imports.
Though the Tamil Nadu government has already slashed the sales tax from 8 to 4 per cent and finance minister Yaswant Sinha has hiked the import duty from 15 to 35 per cent, the moves have not brought any relief to the small growers.
The tea sector has welcomed the hike in import duty but said that the relief was still inadequate to save the industry from the present crisis.
According to industry sources the benefit from the hike on import duty would be negligible with preferential rate of duty on tea imports from Sri Lanka still in place.
Apart from the duty rates, cheap and inferior quality tea was being brought into the country at throwaway prices which is having an adverse impact on the prices in the domestic market.
Moreover, medium and small growers have been badly hit because of the shortfall in production and mounting input costs.
There was an estimated 70 million kg drop in production between January and November 1999, which should have resulted in a spurt in prices.
Paradoxically, the prices declined by Rs 11 indicating that there were large-scale imports during the period.
According to the industry sources, nobody in the government or Tea Board appeared to have any idea about the quantum, quality and source of the tea being imported.
The problems of the industry worsened with the decision of the government to allow free trade among Saarc countries which opened the floodgates for imports from Sri Lanka.
There was also no unity among the Tea Trade Association members in opposing imports. While seller-members were opposed to imports, buyer-members were in favour since tea was available for Rs 35 per kg in some centres against an average of Rs 50 per kg of domestic tea.
The industry admits that its overdependence on Russia for exports and its failure to establish itself in other parts of the globe was hurting it badly now.
Though some corporates have taken the initiative to market their brands abroad it was yet to make any impact What was worrying the industry was that the domestic consumption too has not risen as expected.