Assam Tea in Crisis?

brew-4-web“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.

Problem One

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)

leaves-webThis 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.

Problem Two

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.

leaves-webHere 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.

Problem Three

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)

brew-2-web
Assam Marangi

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!

brew-2-web
Assam Rani

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.

2 thoughts on “Assam Tea in Crisis?

    1. Thank you for your kind words.

      As to your question, it seems that tea plantations in India continue to struggle on many fronts, in Assam and elsewhere, and that although there is a call for change and improvement, the situation seems to have gotten worse rather than better. Although not focused specifically on Assam, I’ve looked into some of the issues since the post you mention.

      –Mechanization rolling into India’s tea Gardens? (12/19/18)
      –The Plight of tea workers in Nilgiris, India (2/21/19)
      –Is India’s Tea Industry Really at Risk? (8/2919)
      –TEA: New Benefits Being Discovered, Yet the Plant’s Sustainability Is in Question in Some Regions of the World (10/919)

      This year, Assam had heavy rains and flooding once again, and the finance minister of Assam said its tea industry “is passing through a critical phase.” Consequently, the tax on green tea for the large tea gardens was suspended for 3 years. Since nearly half of Assam’s tea is produced by small tea growers, I’m not sure what this does for them. In September, the Assam government asked the India tea board to implement a minimum price for green tea leaves so that both large and small tea producers can focus on supplying higher-quality leaves while knowing that they’ll benefit financially from that. If it went through, it would be implemented next year. Meanwhile, the tea workers themselves continue to be underpaid.

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