TEA PLANTATION : GEOGRAPHY / ECONOMY

TEA PLANTATION : GEOGRAPHY / ECONOMY

NEWS: Holistic sustainability of the tea plantation industry

 

WHAT’S IN THE NEWS?

The industry must find a balance between economic viability of the business, the social and economic security of the workers/farmers, biodiversity conservation and climate change impact mitigation

 

Indian Tea Industry

  1. Production:
    • India is the 2nd largest tea producer and the largest black tea producer globally.
    • Major tea-producing states: Assam (55% of total production), West Bengal (Darjeeling and Jalpaiguri), Tamil Nadu, Kerala, Himachal Pradesh, Uttarakhand, Meghalaya, Andhra Pradesh, Tripura.
  2. Exports:
    • 4th largest tea exporter in the world.
    • Major export destinations: Iran, Iraq, Syria, Saudi Arabia, Russia.
  3. Employment:
    • Direct employment: 1.16 million workers.
    • Indirect association: 1.16 million people.

 

Challenges Faced by Indian Tea Industry

  1. Increased Input Costs:
    • Tea prices increased at a CAGR of ~4% over the past decade.
    • Input costs (gas, coal) grew at a CAGR of 9-15%.
  2. Economic Pressures:
    • Rising production costs (wages, fuel, fertilizer) reducing profit margins.
  3. Demand-Supply Gap:
    • Increased production not matched by domestic consumption and exports, leading to surplus.
  4. Weak Exports:
    • Decline in exports to Iran due to payment issues.
    • Overall decline in export demand due to global market surplus.
  5. Export Dependence:
    • Heavy reliance on exports makes the industry vulnerable to global demand and trade policies.
  6. Nepal’s Gardens:
    • Influx of substandard tea from Nepal affecting Indian tea industry.
  7. Sustainability Issues:
    • Pressure to adopt sustainable practices (soil, water, pesticide use).
  8. Other Factors:
    • Stagnant prices, market power concentration, decline in tea quality to reduce costs.

 

Tea Board of India

  1. Overview:
    • Statutory body under the Ministry of Commerce.
    • Established by the Tea Act, 1953.
    • Headquarters: Kolkata, West Bengal.
  2. Functions:
    • Promotion of cultivation, processing, domestic trade, and export of tea from India.

 

Government Steps

  1. Educational Assistance:
    • Scheme for education stipend to wards of Small Tea Growers.
  2. Support Groups:
    • Formation of 352 Self Help Groups (SHGs), 440 Farmer Producer Organizations (FPOs), and 17 Farmer Producer Companies (FPCs).
  3. Mobile App:
    • Development of "Chai Sahyog" for better price realization and information for Small Tea Growers.

 

Way Ahead

  1. Government Intervention:
    • Improve export infrastructure.
    • Increase RoDTEP rate.
    • Reduce interest rates on borrowings.
  2. Regulations:
    • Regulate tea waste sales.
    • Restrict import of poor-quality teas.
    • Promote tea for its health benefits.

 

Geographical Conditions for Tea Production

  1. Climate:
    • Tropical and subtropical, warm and moist frost-free climate.
  2. Soil:
    • Deep, fertile, well-drained soil, rich in humus and organic matter.
  3. Temperature:
    • Average annual temperature: 15-23°C.
  4. Precipitation:
    • Rainfall: 150-200 cm, evenly distributed throughout the year.

Source: https://www.thehindubusinessline.com/economy/agri-business/holistic-sustainability-of-the-tea-plantation-industry-way-forward/article68451236.ece