The Future of Assam's Tea Industry

Wednesday, 02 December 2020



The Future of Assam's Tea Industry

Ranjit Chaliha | April 28, 2018 16:47 hrs

If we are to discuss the future of Assam’s tea industry, let us consider the challenges it faces. First of course is its economic viability given the ever rising input costs which far exceed the rise in selling prices of teas. Tea being a global commodity its price is affected by the dynamics of the global market. The public tea auctions serve as benchmarks for tea prices within the country. Fortunately our Assam teas have a distinctive quality and character not found elsewhere; it commands a premium over many other produces. But our production costs are also higher; for many producers their selling prices barely cover costs. The tea plant is photo-sensitive and needs approximately eleven hours of sun light for its leaves to flush new grown Assam’s geographical proximity to the Tropic of Cancer makes sunlight a limiting factor from December to March. Consequently, flushing and production of tea stops. The season’s crop is produced in just nine months of the year but the permanent workers must be paid for all twelve months. In contrast are south India and other tea growing areas nearer to the equator where production goes on round the year. So worker productivity and production yield is much higher there. This fact is neither understood nor appreciated in many quarters.

When the British decided to start tea plantations in Assam they surveyed and divided the wasteland up into grants of varying sizes from a few hundred to many thousands of acres based on some criteria. Even now the terminology used for these grants such as “Fee Simple Grant, NLR (New Land Release), Waste Land Application” etc remain in the land records of the estates. This was done to open up the territory for rapid development. These land grants, which consisted of all classes of lands such as high forest land suitable for growing tea, paddy land, marshy land etc, were settled with companies and individuals who applied and were found suitable for them. 


To set up a tea plantation only high land is required for planting the tea bushes, for residential quarters, the factory, roads and other necessary infrastructure. But since it was a packaged deal the prospective tea planter had to accept the entire grant allotted to him including the land he could not put to use but for which he had to pay rent to the government. Some of these lands had their own useful purposes though often serving as drainage channels to prevent water logging in the tea areas. Also some managements allowed the workers to grow paddy on these lands as a perk which acted as a bond between the estate and the worker. But the biggest benefit was that it prevented disruptive outsiders from entering the estate. As a result it has been possible to maintain the integrity of the estates from the beginning. Even the government acknowledged this when it instructed its officers not to take over surplus land which was surrounded by tea when implementing the Land Ceiling Act. 


Another factor which binds the worker to the tea estate is the supply of subsidized rations by the management. Lately, a school of thought has emerged suggesting that all benefits currently being paid to workers in kind be converted to cash and only cash wages be paid. I personally feel that the present system is time tested and successful and any ill advised adventurism done on the spur of reformist zeal may do permanent harm to the industry. It is vitally important for Assam that the tea industry continues to remain robust and healthy bringing benefit of its people for all time to come. An example of such disruption is Sri Lanka which had its share of disastrous consequences emanating from certain ill-advised actions taken by its government in its reformist zeal some decades ago. They nationalized their tea companies between 1971 and 1975, making the tea companies suffer massive losses. In 1992-93 they were forced to de-nationalize and sold the estates mainly to Indian conglomerates. The Sri Lankan tea industry came back from the brink of disaster and is now back on track – an example to learn from. 


Another challenge is corruption. Nothing moves without money changing hands. Isn’t it strange that the inspecting agencies remember their raison d’etre and stir to action only prior to the festivals? I am hopeful that the present government will tackle and root out this menace from our society. Then again I am besieged with doubts. Can a leopard change its spots?


Presently the tea industry is going through a downswing with low profitability. Many tea companies are reporting losses. It has happened before and no doubt it will happen in the future too. So far, every time the industry has tackled and surmounted the issues and has emerged stronger. But with passage of time bringing in newer challenges like problems arising out of globalised warming and others such as galloping costs without commensurate rise in prices of teas, the industry may have to reinvent itself in order to survive.  


Ranjit Chaliha is a senior tea planter of Assam and is the chairman-cum-managing director of Korangoni Tea Co.


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