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Tea industry: Year-end review
Why is it in the news ?
- Indian tea industry in 2018 faced challenging times on account of several factors including climate change, non-viability of large growers and labour issues.
- Despite some setbacks, 2018 did have its bright spots.
- One among these were the efforts taken to genetically establish the uniqueness of Assam tea.
- The other was the signing of an agreement between two of the largest tea-growing and consuming countries — India and China — aimed at promoting sustainable development of the global tea sector.
- The Indian Tea Association (ITA) and China Tea Marketing Association (CTMA), have signed a MoU to promote green and black tea consumption.
- Both the countries together to promote consumption in major tea markets in Europe , the U.S., Russia and West Asia, besides India and China.
- The pact could also involve organisation of joint events.
Tea Industry in India
- Indian tea is among the finest in the world owing to strong geographical indications.
- The main tea-growing regions are in Northeast India (including Assam) and in north Bengal (Darjeeling district and the Dooars region).
- Tea is also grown on a large scale in the Nilgiris in south India.
- India is one of the world’s largest consumers of tea, with about three-fourths of the country’s total produce consumed locally.
- India stands fourth in terms of tea exports after Kenya (including neighbouring African countries), China and Sri Lanka respectively.
Performance in 2018
Supportive Factors:
- The emergence of the bought leaf factory (BLF) sector in creating a dual economic structure in the tea industry and the exploration of mechanisation and automation by large tea estates were two major trends that marked the year 2018.
- The BLF sector buys output from small growers, who cultivate tea in their backyard (holding less than 10 acres).
- The large tea estates supplement their output with the produce of the small growers.
Labour woes:
- The auction prices have stagnated at around Rs.132 per kg (50% of tea sold by the organised sector has to be auctioned) while all other input costs have increased in various bands.
- Most importantly, age and welfare costs, constituting 65% of the total production costs, have risen for the organised sector.
- Despite the recent wage hikes, labour is becoming scarce, with the younger generation choosing to migrate from the sector.
- The industry now claims to be paying a composite wage of Rs.350 per worker, which includes daily wages and the cash value of the amenities provided to them.
Productivity issues:
- In North India, where the tea season is around nine months, productivity remains at a third of the levels of South India which has a round-the-year season.
- Most estates now using the shear-plucking and mechanical harvesting to improve productivity and tackle absenteeism.
- The Tea Research Association, a Ministry-funded and industry-backed body, has begun working with a Japanese global leader in mechanised harvesting equipment to try them out in Indian conditions.
Tea Board Initiative:
- The year saw industry regulator Tea Board of India roll out various steps to help small growers improve their quality, which has been an area of concern.
- This included an app that would help STGs to tackle their real-time farm problems.
Source
The Hindu, Ibef.