STG seeks farmer centric policies from Tea Board of India

Small Tea Growers seeks farmer centric policies from the Tea Board of India


International Tea Day is observed every year as a day to affirm the rights of small tea growers and tea workers - those who produce tea, the perennial health drink. This is observed since 2005.


This year (2017), small tea growers in India are urging the government of India to move out from its historic tea estate centric perspective and incorporate a farmer centric perspective in its policies and programmes recognising the fact that they produce more than 50% of tea in India. STGs are also seeking declaration of minimum support price of tea under the provisions of Tea Act, 1953 and an immediate renegotiation of the provisions of Indo-ASEAN FTA to prevent dumping of cheap tea into India and into other tea producing countries in ASEAN.


Small tea growers in India celebrates 13th International Tea Day (13th ITD) with an increased sense of relevance and accountability. We urge Tea Board of India to make a formal declaration affirming 15 December as International Tea Day.


Though the contribution of small tea growers in Indian tea production has seen a phenomenal increase within a period of three decades since early 1990s, the Tea Board of India’s official figures are yet to capture the real contribution by small tea growers. Of the 1233.14 million kg of tea produced in India in 2015-16, Tea Board calculates 417.43 million kg (33.85%) has been produced by the Bought Leaf Factories. This is the figure Tea Board of India gives as the contribution of small tea growers assuming that the entire product of small tea growers goes to the Bought Leaf Factories. This is a gross mis-calculation as a very large volume of green leaf goes to the Estate Factories. It could safely be argued that currently small tea growers produce more than 50% of tea produced in India. 


For most of the 4 to 5 lakhs small tea growers in India, owning less than one acre of land, tea cultivation is a means of livelihood and employment and therefore contributes in eradicating poverty in the rural areas. About 1.2 million people are said to be dependent on tea estates. Nevertheless, inclusive of small tea growers and those working in their gardens, people dependent on tea in India must be double the figure of 1.2 million.


Tea board of India, we has not yet move out from its historic tea estate centric perspective and incorporate a farmer centric perspective in its policies and programmes.


Fall in prices of green leaf


The greatest challenge being faced by the small tea growers is that the prices that we get for green leaf is never sufficient to meet our cost of production threatening our income security and plunging ourselves into chronic indebtedness. On an average, the farmers obtained only Rs.9 and Rs.7 in West Bengal and Tamilnadu / Kerala when the cost of production was Rs.15.50 and Rs.18.50 respectively. In Assam too, the farmers received only Rs.14 when the cost of production was Rs.18.50. It is in a context when the retail prices of tea have never fluctuated. This shows that the measures taken by the Tea Board of India declaring a price sharing formula and the declaration of a monthly minimum benchmark price etc have not helped in ensuring a sustainable price for green leaves. The fact that this is a national phenomenon hints at structural reasons for the failure in making tea cultivation sustainable. The situation in Tamil Nadu and Kerala is worse because the tea processing factories engage in reconditioning of tea during the lean period brining down the quality as well as the prices of tea. In this context, we strongly urge that the Government of India, under provision Section 30(a) of Tea Act, 1953 declare minimum support price for green leaf produced by the small tea growers.


Impact of climate change and compensation for crop loss


Small tea growers are essentially farmers engaging in the cultivation of tea as a crop. Tea is grown only in specific geographical and ecological conditions, but these areas are highly sensitive to climate change induced factors. Tea farmers face heavy crop losses due to recurring instances of hailstorms, frost, heavy rains and droughts. At present, there are no systems to compensate farmers for such unexpected losses of crop and income. Moreover, vulnerability increases in the absence of mitigating strategies and preparing farmers to overcome negative impacts of climate change. We strongly urge that government of India crop insurance scheme must be in place and government must invest in preparing farmers to face the challenges of climate change.


Impact of Indo-ASEAN FTA on small tea farmers


The implementation of the Free Trade Agreement (FTA) in goods signed between India and ASEAN countries began from 1st January 2010 and paves the way to mutually eliminate or modify tariffs on approximately 4,500 products, including tea, in a time bound manner. Among ASEAN countries, Vietnam is the 6th largest and Indonesia, the 7th largest producer of tea globally. Share of ASEAN in total global tea exports is 3.41%. Among ASEAN countries, India’s tea exports are highest to Cambodia, Thailand, Singapore and Philippines. Though a tariff cushion of 45% will remain after tariff cuts are imposed, this cushion may not be sufficient to protect domestic prices. Negative impact of the cheap imports from the major tea producing countries of Indonesia and Vietnam will cause havoc to the small tea growers, who have no other protection than the price realised on a daily basis. We strongly suggest that India must consider this matter in the Joint Committee under the agreement and ensure that farmers in the tea producing countries are not impacted by the FTA.


Financial Allocations and Disbursements


We are aggrieved by the fact that financial allocations to small tea growers are not commensurate with the contributions of small tea growers to Indian tea industry. Worse, only a very small percent of the minuscule allocation to small tea growers actually reach them. This attitude must change.