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Bidyananda Barkakoty
Date of Publish: 2015-07-08

Challenges and opportunities in the tea sector


The cup that cheers has seldom cheered tea planters, big and small in Assam. In 190 years, the industry has battled many a challenge, but opportunities prevent it from being pessimistic.


Climate change: From an effective nine-month operation period, the seasonal tea industry in North India now functions for eight months or lower annually. Reason: a flood-and-drought scenario due to shorter bursts of high-intensity rainfall and longer dry spells, affecting crop and yield. Irrigation and drip irrigation, rainwater harvesting, drought and flood-resistant planting materials, avoiding blocking of natural water flow routes, etc., are a few solutions. Plantations in Upper Assam never needed irrigation before, but are critically dependent on it today.

Labour shortage & Absenteeism: Big, medium and small plantations suffer from labour shortage primarily of the MGNREGA-induced absenteeism him. The job guarantee scheme keeps 30% workers away from many plantations every day. Since MGNREGA is meant for the unemployed, permanent workers of tea estates provided with housing, medical and other amenities should be accommodated only during the off-season so that genuine unemployed youth are not robbed of jobs. Counselling, training and automation are some solutions to this problem faced by large, medium and small estates.

Costs: Almost 80% of the total cost of tea production has little scope for reduction, and the wage component constitute over 60% of total cost of production. Increase in input costs of electricity, fuel, pesticides and chemicals and irrigation is making Assam teas uncompetitive compared to African teas. Even a kilo of South Indian tea costs Rs 35.92 less to produce.

Fair price realisation: The average auction price of Assam tea in 2014 was Rs.153.70. Slim margins have seen planters cut costs by postponing their uprooting, replanting and modernization programmes, risking long term viability. Inconsistent investment is not ideal for an agriculture-based industry. Overhaul of the present e-auction system at tea auction centres, essentially the computerisation of the old manual system, with the help of experts will help in fair price realisation.

Quality: The perceived fall in quality of tea can be attributed to poor quality of purchased green leaf. In Assam, more than 33% of teas are produced from purchased green leaf. Some growers harvest tea leaves by using sickles due to shortage of workers. One of the reasons for poor quality of green leaf is harvesting of tea leaves with sickles. But shears may be a better option than sickles.

Bandhs: Frequent bandhs have begun to affect tea gardens in Assam. Managements are feeling the pinch since green leaf, a perishable commodity, needs to be plucked within a certain period for maintaining quality.

Wages: Various legislations and agreements went into the wage structure – divided into cash and perquisites – the tea industry follows. The tea industry pays a major portion of wages in kind but only the cash component is brought up to accuse it of paying low wages to workers.

Labour & land productivity: The tea Industry in Assam is the largest employer with 50% of the workforce being women, but output value per employee is one of the lowest unlike in South India. Moreover, the average yield in Assam is 1800 kg/hectare compared to 2500 kg/hectare in South India. Sustainability of tea industry is linked to ‘land and labour productivity’. Low land productivity is a national loss. Land productivity beyond a certain point depends upon factors not in the hands of management and hence productivity is different for different regions.

Reform in PLA 1951: The Plantation Labour Act needs to have simpler rules, fewer forms, annual returns, etc. It should be a step towards "ease of doing business" as envisaged by the Prime Minister.

Flagship programmes: Central Government schemes such as Indira Awas Yojana, Sarva Shiksha Abhiyan, Swajal Dhara, NRHM and Sanitation should be effectively implemented in tea gardens.


The industry is lucky to have a huge domestic market that annually consumes 1,000 million kg or 80% of teas produced in India, the largest producer of black tea in the world. This domestic market is growing @3.3% per annum, thus keeping our dependence on exports to a minimum. But Kenya and Sri Lanka tea industries largely depend upon exports.

Tea is the cheapest beverage in the world, next only to water. In India, tea is widely consumed by all sections of people – rich and poor, young and old, men and women – across all religions and communities and in all the states.

There is ample scope to increase the domestic tea consumption. Tea Board should focus on the domestic market besides foreign countries. Tea Cafe, Chai Bar, and Coffee House-like Tea Room will boost consumption.

Tea is both a health and lifestyle drink served with variety. Green tea is becoming popular among all age groups while youngsters are taking to iced tea. We need to promote flavours such as cardamom, masala, pepper, clove, cinnamon, mixed fruits, etc., to cater to the cola-addicted young generation.

The future also belongs to organic-certified handmade tea, green tea, white tea, purple tea and other specialty teas. Small tea growers have started establishing their own processing units to produce green tea. Today, it is also viable for them to establish CTC tea processing units that yield 100,000 kg made tea per annum.

The demand for a variety of teas has opened up job opportunities in big, medium and mini tea factories. There is a requirement for fitter, electrician, tea maker, executives etc. in all sizes of tea factories. A tea auction centre at Jorhat will also generate jobs and widen business opportunities.

This brings us to tea entrepreneurship. Unemployed educated youths can start a business with single-user plucking machines and harvest green leaf in any tea garden by charging by the hour or per kilo of leaf harvested. A similar professional service with pruning machines can be added.

Other areas of opportunity include value-addition; packaging of teas with indigenous items such as bamboo, cane, jute and Assam silk; small cold storages where green leaf can be kept for three weeks without quality deterioration (during peak cropping months when factories cannot receive excess green leaf) and solar-powered irrigation system.

(Bidyananda Barkakoty is the Chairman, North Eastern Tea Association and can be contacted at barkakoty@yahoo.co.in)


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