An iconic Indian product is losing its global currency, ironically as India is positioning itself as a supplier of the world’s goods. Away from the gimmicks of Make in India, tea, which has no less a brand ambassador in the Prime Minister of India, is today a completely chaotic industry.
Forget about Darjeeling tea as a unique GI-tag heritage product of India competing with coffee in the western markets- tea gardens in Darjeeling are mired in a deep crisis.
A recent Economic Times report said that nearly half of Darjeeling’s 87 tea estates in distress are up for sale. This requires remedial action through arbitration through Tea Board India.
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Tea employs one lakh workers, who form a large section of organized labor in the country, as tea gardens are regulated and offered to respect the right of workers to form unions and impose minimum wages and other welfare measures. is compelled to do. For example, the wages of tea workers in India are almost double their level in Bangladesh.
The tea industry is facing a structural problem. According to the Tea Board’s global data, the total tea production exceeds the apparent consumption. While global tea consumption has increased from 5,486 million kg in 2017 to 6,173 million kg in 2021, production remains on pace, with a surplus of 4-5% every year. And production is increasing in each of the major tea producing and tea exporting countries – China, India, Kenya, Sri Lanka, Vietnam and Indonesia – and some other smaller producers that account for about 14% of total production. This means that India must invest in quality improvement and better branding and marketing to sustain a healthy and growing tea industry. While some teas from Darjeeling and Assam fetch fancy prices at auction, the average price per kg of Indian tea is lower than that of Sri Lankan tea, according to the Tea Board.
The tea plant can live for about a century, but the quality of its leaves starts to fade after about 50 years. Major Indian plantations didn’t replant their shrubs until decades after they pushed past their prime. While Assam and Darjeeling had some hectic activity about a decade and a half ago, the replantation cycle is not complete. New plants will yield nothing until five years after repotting. It replicates a capital-intensive business. If the combination of falling quality, price and ever-increasing wages, which account for about 60% of the cost of a plantation, is already difficult, the prospect of no revenue from new shrubs can be overwhelming, especially for small growers. , which are defined as those plantations of 25 acres or less.
Many planters have given up on their business, fearing that they cannot afford to reinvest in their plantations, investing long hours and paying workers their wages, while earning no revenue from the transplanted fields. can go. This has resulted in labor hardship, and some creative solutions such as ‘bought leaf factories’, as the name suggests, are not appendages of an individual plantation but rather buy tea leaves from small growers. Small producers now account for a little over 50% of the total production.
Some large plantations may be torn down to re-emerge as small producer organizations, where the implementation of statutory worker benefits is less strictly enforced.
The industry needs a holistic solution. High quality saplings must be produced in large numbers to replant every old bush in the country. Producer companies should be formed to take over the abandoned plantations, where the workers are the owners of the plantations and share in both profit and loss. Small producers should be organized into unions to adopt quality improvement practices and gain pricing power. While all commercial investments should pay for themselves over time, the government may need to intervene to extend credit periods and make loans available in the first place. Investing in insecticides and weedicides that do not leave any harmful residues should be encouraged by the Tea Board in dialogue with the plant chemical industry. The same goes for investing in packaging that extends shelf life and branding to improve pricing.
The tea industry, like most crops, will face additional challenges from climate change. Technological solutions such as plant varieties adapted to warm climates should now be adopted.
Tea is rich in anti-oxidants, both green tea and the cured variety. With the advent of coffee chains like Starbucks, coffee drinking has acquired the brilliance of a lifestyle. It can also be beneficial to convert tea drinking into the habit of the interested classes. The Tea Board may offer seed funding for a set of business plans to promote aspiring tea. Subliminal boost coffee derived from a programming language called Java (a common synonym for coffee, thanks to the Dutch growing coffee in Indonesia and trading the beans globally) may be obtained.
Tea has been a traditional commodity of competitive advantage for India. That edge must be preserved and enhanced, not lost due to apathy or anemic, unimaginable interventions.
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