Tea Industry

  • India is the second largest producer of Tea in the world after China (China>India>) and earns a sizeable amount of foreign exchange through export of tea.
  • However, India’s share in the international market of tea has declined substantially.
  • At present, it ranks third among tea exporting countries in the world after Sri Lanka and China.
Small Tea Growers
  • Small tea plantations were in vogue in India since early 1960s. They were mainly concentrated in Tamil Nadu, Kerala and Karnataka. It was only during the late 1980s or early 1990s they started spreading to North-Eastern states such as Assam and West Bengal.
  • The smallholders are unorganized and operate in fragmented landholdings – and currently account for more than 25 % of the Tea production in India – the small tea growers’ sector, currently contributes about 70 per cent of the world tea crop.
  • They face challenges of landownership regulations and related procedural problems and as a result are not registered with the Tea Board of India.
Issues and Challenges in the Indian Tea sector
  • Stiff competition and improved standards in the world market – due to low product prices from Kenya and other countries – increasing demand for organic tea and quality assurance that entails environmental justice.
  • Decline in productivity and quality – Tea bushes must be replanted every five years, but most Tea bushes older than 20 yrs; uneven rainfall due to climate change – is affecting the productivity and quality of Indian Tea leading to lower prices at Tea auctions.
  • Poor worker conditions and low wages – despite the provisions of the Plantation Labor Act, 1951 most workers and their families live in unsanitary conditions and receive low wages – this issue needs to be addressed given the fact that “starvation deaths” in North Bengal caught the international media attention.
  • Small Tea Growers – the challenges faced by the Small Tea Growers’ sector is as follows –
    • Not getting the right green leaf price
    • Unlike large estates, STG’s are not able to capitalize on scale and marketing of product as a collective is difficult – since it is unorganized
    • Issue of workers’ rights – since STG’s are not governed by the PLA, 1951
    • Most of them are not recognized by the Tea Board of India due to landownership regulations and related procedural problems – this means lesser data available on the state of the STG’s making it difficult for policy coordination
  • Labor availability issue – since there exist alternatives that pay higher like MGNREGA
  • Implementation of PLA, 1951 – The cost of production for manufacture of 1 kg of tea for an estate governed by PLA, 1951 is around Rs 170 per kg – however, auction prices at an average of Rs 126. Industry representatives feel that statutory social welfare measures, as mandated in PLA, 1951 – adds to garden-costs and reduces the Indian industry’s competitiveness. There are also complaints regarding the industry not having a minimum wage – however, the industry says that in light of the PLA, 1951 – cost of employment of a tea estate worker comprises a cash wage and amenities.
Responses to the issues and challenges plaguing the Tea industry in India and Suggestions
  • Recently the Tea Board of India released the Plant protection code which aims to achieve sustainability through GAP including IPM, promotion of alternative control strategies (Biological control etc.) to gradually reduce the dependence on chemicals – to satisfy the green consumerism movement occurring in export markets
  • It has been suggested that as in Sri Lanka, India may consider the dovetailing of various government schemes with the benefits being provided by PLA, 1951 – this will reduce the burden on Tea producers regarding compliance with the PLA, 1951 – and also help increase the quality of life of the workers.
  • Need to provide a marketing arrangement for STG’s to help them sell their product at the right price and also increase their market accessibility.
  • Increase awareness regarding better plantation techniques and plantation worker rights and provision of financial assistance to increase mechanization in Tea gardens.
Plantation Labor Act, 1951
  • The Plantations Labor Act, 1951 (PLA) applies to any land used or intended to be used for growing tea, coffee, rubber, cinchona or cardamom or any other plant which measures 5 hectares or more and in which 15 or more workers are employed on any day of the preceding 12 months.
  • The State Governments can be notification apply this law to any other land too even if it measures less than 5 hectares and employ less than 15 workers.
  • State government is the appropriate authority to make any rules, changes or issue orders – under this Act.
  • Plantation Labor Act (PLA), 1951 – requires garden owners to provide certain amenities to tea plantation workers.
  • The amenities that industry is required to provide include free housing, medical facilities, primary education, potable water, sanitation and creche, besides concessional electricity, food grains, fire-wood, footwear and the like.
  • There is the provision for daily rest, paid annual leave and limitations on the number of hours of work per person.
  • Neither the worker nor the Union has a right to file a complain and launch legal proceedings against the Plantation owners. This right is given to the Chief Inspector only on whose complaint the Magistrate of the second class shall try the offence punishable under this Act.

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