“Anarchy will prevail”?! Really?!
Along with the alarming “spiralling” and “musclemen” and “mirage” and “will not survive.”
In a tea garden?!
Because, yep, these dire words address current conditions in Assam’s tea industry.
As I related last month, wages have increased for Assam tea workers. However, this cost increase has not been passed on to the price of the tea. Instead, growers and producers are simply earning less profit, especially as the cost of labor is around 60% of the total cost of producing tea.
Kaushik Das, vice president of ICRA, warned that a “commensurate rise in tea prices” (Ravi 2018) is necessary, while Prabhat Kamal Bezboruah, chairman of the India Tea Board, cautioned the Assam Tea Planters’ Association that if tea prices don’t rise, the tea industry in Assam may not survive!
But he wasn’t arguing simply for a price increase.
Rather, Bezboruah argued that a price hike depends on a concomitant increase in tea quality. He went so far as to say:
We on the tea board are contemplating an order to close down operations at all tea estates by December 15 every season. . . . This would remove about 35 million kilograms of tea from the market which are considered bad teas. (Pullock 2018)
This closing down of operations would
- prevent more harvesting of tea, at a time when the leaves are of lower quality, and
- necessitate a resting period for the plants ⇒ allowing them to build their resources ⇒ which should optimize new growth in the spring ⇒ resulting in a better-quality tea ⇒ which ought to command higher prices on the market.
If prices for tea don’t pick up, Bezboruah continued, the large gardens will be broken into smaller gardens—but these won’t have the assets to produce the high quality of tea needed to keep them afloat.
Here is where Bezboruah predicted:
- that “anarchy will prevail,” with gardens shutting down, and
- that “small portions of tea gardens would be taken over by either by musclemen . . . or by garden laborers because owners of these estates would not be able to continue operations” (Pullock 2018).
Since Assam and West Bengal produce nearly 80% of India’s tea, this would impact not only India, but tea drinkers globally.
Finally, Bezboruah argued that small amounts of tea that have recently sold for record high prices mislead growers into thinking that they might similarly profit. If one lot of tea sells high, it might be surmised that the garden’s other teas are as good.
Not so fast, asserted Bezboruah; this is a “mirage” because:
selling small tea quantities at record prices is a marketing strategy undertaken [by] manufacturers in league with the concerned broker or buyer. (Pullock 2018)
So to survive, according to Bezboruah a tea garden must have:
a high yield, a genuinely premium quality profile, coupled with a moderate cost of production sustained by low overhead. (Polluck 2018)
Possible? Let’s hope so!
Assam SFTGFOP1 Marangi, a premium tea, is available at TeaHaus.com.
Sources: (1) Pullock, D. “Sustainability of Assam’s tea industry questioned,” World Tea News, August 13, 2018, and (2) Ravi, R. “Assam tea plantation workers’ wage hike may hit margins,” Financial Express, August 7, 2018.