Small growers edging out big players: Tea body

A plantation worker plucking tea at Nelliyampathy in Palakkad district. File   | Photo Credit: K.K. Mustafah

Small tea growers are threatening to push estates in the organised sector out of the competition because they are not burdened with welfare responsibilities, the Tea Association of India (TAI) has said.

In its paper “Sustainability of tea industry in India”, the TAI said the small tea growers or STGs are no longer small or a minority as they produce more than 50% of India’s green leaf output.

An STG is a person who cultivates tea in an area up to 25 acres. There are more than 2 lakh STGs in Assam and West Bengal.

Dichotomy in industry

The STGs are not burdened by the welfare activities that organised estates provide to their labour force, the TAI paper said. “This creates a dichotomy in the industry, with the estates and the small growers having significantly different costs of production, with different welfare responsibilities, yet they compete with each other,” it pointed out.

“The low-cost tea available from small growers undercuts the teas from the organised estates that have a much higher cost of production and a more stringent requirement of regulations to follow. The organised sector cannot remain sustainable in such a scenario. This will lead to continued hardship for workers, and closure of estates in the organised sector, ultimately causing wide-scale strife and unemployment.

“The emergence of the STGs as a major player has affected the tea economy too.”

The paper said production has increased from 945 million kg in 2005 to 1,255 million kg in 2020, a 33% rise in 15 years.

The production outstripped consumption leading to stagnant selling prices for plantations, it said.

The input on labour costs, which account for 60% of the cost of production for the organised estates, has put them at a disadvantage, it said.

In-kind benefits

The organised estates, apart from cash wages, provide many in-kind benefits to their workers: free housing, subsidised food, free medical facilities, primary education for the children of the workers, fuel for cooking, retirement funds and other benefits, the TAI said.

“These were regulated under various laws including the Plantation Labour Act, 1951 and rules drafted by various States. While the Plantation Labour Act of 1951 is being replaced by the Occupational Safety, Health and Working Conditions Code, 2020, the same responsibilities will remain with the management of the tea estates,” it said.

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Printable version | Dec 4, 2021 11:20:08 AM |

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