STiR coffee and tea magazine

STiR coffee and tea 37 K O N S U L - S M I D T - S T R A S S E 8 j S P E I C H ER 1 - D - 2 8 2 17 B R E M E N FON + 4 9 - 4 2 1 - 3 4 8 5 2 6 4 F A X + 4 9 - 4 2 1 - 3 4 7 7 7 2 0 W W W . K K T E E . D E M A I L @ K K T E E . D E K L O T H & K Ö H N K E N T E E H A N D E L G M B H FAIR AND Q U A L I - T E A ! Lama is also among those who think the large tea garden model is no longer working. Tea garden workers are still often referred to as "coolies," a colonial derogative. Yet, in the Nilgiris, the 135-year old Craigmore Plantations producing orthodox green and black tea, with a resident population of 5,000 is running efficiently and prof- itably. The company's welfare model is one of the best in the country, with no expense spared in the quality of services provided. Their environmental work is remarkable, with more than 25% of the estate left forested. Craigmore offers a ready model to borrow from, but, unfortunately, there seem to be few takers coming forward to learn from it. Because right now, the conversation has shifted to the small tea grower (STG). The rise of the small tea grower In 2012, STGs contributed 25% of India's total tea production and, by 2019, this had grown to 48%, almost equaling the output of the RTG. STGs are defined as a farmer who owns and cultivates tea on up to 25 acres. STG is not regulated by PLA. Most are single-crop growers, depending solely on tea for their livelihood. Unlike RTGs, they are not saddled by high overhead costs. Small farmers sell the green leaves to the estates or bought leaf factories (BLF) and are not encumbered by the production of tea or its distribution. But this gives them no cost advantages or bargaining power. Mrityunjay Jalan, of the Chota Tingrai Estate, Assam, says, "STGs are forced into selling their leaf at low prices as there is no formal structure or mechanism for the green leaf sale. The minimum benchmark price remains low and, moreover, cannot be formally enforced. The low green-leaf price ensures that BLFs have a much lower cost of production as compared to the organized sector, thereby enabling them to sell the teas at a much lower price in the open market." Because they make up 44% of the production, BLF can influence prices. Adds Jalan, "There is major competition among tea brands to capture the market by compet- ing on price and offering discounts. This forces them to reduce their purchasing price of tea. With BLFs willing to sell cheap, the overall tea market gets pushed down and the average selling price remains suppressed." Sonia Jabbar, of Nuxalbari Estate in Darjeeling, offers numbers. "I will pay my workers INR500 a day in wages, as is demanded, but will the buyers pay me INR500/ kg of tea?" According to the Tea Statistics 2019 issued by the Tea Board of India, the all-India average auction price for 2018-19 was INR180.76/kg for orthodox tea and INR136.29/kg for CTC. Accounting for wages for a sizable workforce and cost of facilities necessitated by PLA, along with running and maintenance of the factories, RTGs say the math no longer works for them.

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