Resurgence of the Tea Industry
1 July, 2020 | Ojasvi Chauhan
The total North Indian tea production in 2019 - 2020 went up to 1165 Million Kg from 1124 Million Kg. It constitutes 83% of Assam and West Bengal of the annual Indian tea production volume of 1400 ...
The governments of India, Assam and West Bengal have, despite unforeseen challenges, and without any historical perspectives on handling COVID, done their best to contain COVID and support our people. Indeed, this is a new challenge, and having embarked on supporting us, with the help of front line people – the police, healthcare workers, civil society and many leading private companies, who have been leaders in this field, by addressing the needs of the people first. As efforts continue to contain the pandemic, and de-stigmatize the issue, we, are standing shoulder-to-shoulder with the government and people for all necessary actions, and are embracing all our garden returnees, who have been such an integral part of our lives, and are serving us in different geographies and locations.
The total North Indian tea production in 2019 – 2020 went up to 1165 Million Kg from 1124 Million Kg. It constitutes 83% of Assam and West Bengal of the annual Indian tea production volume of 1400 Million kg. However, the prices remained almost stagnant at Rs. 149.80/- per kg. While the Regulated Tea Grower prices averaged around Rs. 170/- per Kg, the Small Tea Grower / Bought Leaf Factory prices averaged in the region of Rs. 120/- per Kg – these prices are not helping the overall tea industry profitability.
We must thank the government of Assam for providing Green Leaf cess exemption, orthodox production incentives, 3% interest subvention on Working Capital & Term Loans that would help boost industry profitability in the FY 2020. We are looking forward to these continuing support mechanisms by the government in 2020 – 2021.
Similarly, we must also thank government of West Bengal for cashing out the ration distributed by plantations to workers and merging it into their salary and providing rations under NFSA in FY 19. This is the logical way forward and we appeal to the Assam government to do the same. We believe that there is opportunity, and are cognizant of the trends of the world that are being reflected below, as we try and take a leadership position with pioneering actions.
Over the last 5 years, we have been very strongly advocating the resurgence of the tea industry, and highlighting issues pertaining to economic, social and environmental aspects. I sincerely believe and appeal to all concerned, that we have to create the resurgence of the Assam and West Bengal tea industry in some of the focus areas such as:
1. Creation of a Resurgent Tea Industry
- Unified Tea Policy (UTP): Alignment in Government, worker and investor thoughts, both in terms of material, emotional and social benefits. Harmonization of Industry Rules, Regulations and Business Practices with Business Requirements
- Life, Livelihood & Social Securitization: Moving towards a wage regime considering all the competitive forces at play, creating nutritional programs ensuring healthy diet & healthy planet and transference of infrastructural assets to workers
- Government / Stakeholder Participation to address following issues – Oversupply of tea, code of wages implementation, ease of doing business, promotion of bio-friendly agriculture, rationalize norm of worker deployment, promote upgrading of skills
We believe that the tea businesses will move towards creating asset light businesses for investors, especially in the regulated tea industry and pave the way for economic and ecological regeneration in the entire tea management framework.
2. Revenue Optimization – through creation of Asset Light Business
- Tea as a Rural & Agricultural Industry: Government recognition of the tea industry as an agriculture and rural industry, so as to equalize benefits for all population groups in rural areas. Extension of all business and social provisions for the rural agricultural industry to tea.
- Asset Segregation & Strategic Focus: Creation of 3 asset classes in the Tea Estate viz. manufacturing (with factory assets), plantation (with natural assets) & infrastructure (with basic amenities like housing, healthcare, education, water and electricity).
- Land Value Optimization: Mechanism to create housing, Industrial infrastructure and other value additions (agro forestry) on Plantation land, along with nature tourism with the Government in a Public Private Partnership, subject to very strict environmentally positive additions.
3. Digital Plantations
Going forward, this is going to be the single most important lever for the business. Digitization & modernization of the entire plantation value chain, from manufacturing to marketing is the core concept.
- Digital workstations, smart management information system (MIS) and decision support system (DSS) would digitally link all core and support functions to reduce cost of operation and improve value chain productivity.
- Digital plantation includes crop management, pest and disease control, irrigation management etc. through digital mapping and reporting and use of robotics in activities like plucking, pruning etc. Similarly, digitally controlled manufacturing would include process parameter optimization, quality standardization and remote operation.
- Digital marketplace will be driven by e-commerce platforms and Online Direct Delivery Systems from estates to consumers. This would support the establishing of each estate as a single brand source of origin, which can help transform our teas or commodity into individual products that can command a premium, which, in turn, can improve the quality of lives in tea-producing communities. Research shows us that a single origin approach is a viable model. We look forward to the day when the biggest fresh beverage suppliers to consumers through digital markets/e-commerce platforms like Amazon, Flipkart, BigBasket, Nature’s Basket etc. will become prevalent.
4. The Law of the Land
- Prime Minister Modi’s organic appeal: We are very supportive of the laudatory suggestions made by the Prime Minister to make the North East organic, and we are very hopeful to partner in making this happen, even though this seems to be a very daunting task. We have, from our own experiments at Hathikuli Organic, found that to convert a monoculture tea-estate in the heart of the pristine Kaziranga area is an absolute challenge, as there were no tested formulas to control a legacy 100-year monoculture estate. Wanting to reverse the process towards an inorganic fertile soil structure does not seem immediately possible.
- The Legacy Challenge: The biggest legacy challenge for the plantations is the chemistry and quality of soil/ land, and the prevailing monoculture/ monocropping that exists. The combination of monocultures, fertilizers, insecticides and agricultural cycles for land optimization has not been addressed well enough to make it compliant with natural processes. We must protect ourselves from recent reports of natural ground-water contamination, with high fluoride and arsenic. A nation that destroys its soils destroys itself.
The awareness of this challenge has been taken up by the Tea Research Organizations and the companies themselves, by creating kinder versions of input material, and therefore, possibly less damaging, yet, still very intrusive and destructive for soil and its micro-constituents.
Business must remain compliant with nature. Saving our planet, lifting people out of poverty, advancing economic growth – these are one and the same fight. Between monoculture, soil regeneration, weather and climate variations, the entire value chain needs to be balanced and greater emphasis must be given to agro forestry as one of the solutions. A productive planet, with productive natural assets will provide this salutary and sustainable cycle of natural capital from extractive economies to circular rural futures.
We must slowly, but surely move towards making our business not just nature-compliant, but “NATURE FIRST”. We have the greatest gift of being nestled in the heart of nature. Strengthen the resilience of plantation landscapes and tea communities so they can enhance the natural resource base, which in turn, empowers the tea business.
5. Inclusion and Expansion by addressing the Heart of the Business – Land:
- Agripreneur Partnerships: We must be very cognizant of utilizing all elements of the ecosystem, especially that of land. In order to grow this business, an inclusive partnership between Agripreneurs (Small Tea Growers) and large business houses would be the most beneficial towards creating a process of basic human security of healthcare, education, food and housing. This could also help towards creating a bio-diverse habitat through adaptation and mitigation programs, thus creating a fertile reservoir of natural resources.
- Interdependent Geographic Expansion: It is strongly recommended that all states that are increasing their footprint in tea land, like Arunachal Pradesh, Nagaland, Meghalaya and Manipur must completely learn from the evolutionary challenges of Assam and North Bengal teas, and must intervene in areas of ecology, economy and social dimension of the Industry other than issues of short-term oversupply.
- Gender Equality: The tea industry is a privileged industry, and all estate lands are jointly shared for life and livelihoods, in which the workforce is estimated at 50% men and 50% women. We are very respectful, as we jointly share this land.
It is very relevant that the eco-system of the tea industry is what we must nurture, by cyclically sowing what we reap. After all, that is the law of the land.
It is my appeal to the governments of both West Bengal and Assam to address these opportunities and to view these challenges, so as to help both the regulated and small growers forge a common prosperity alliance with the land we share.
(The writer is President & Founder of Balipara Foundation & Chairman of Amalgamated Plantations Pvt Ltd)
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