STiR coffee and tea magazine

38 STiR coffee and tea | 2023 Issue 4 (August / September) he world is awash in a flood of low-quality green leaf. For many small growers, over- supply has turned tea farming into a race to the bottom. Production costs have risen, but farmgate prices have not kept pace. A quandary occurs even when prices rise. When green leaf prices turn up, farmers predict- ably scramble to pluck more leaves to earn more money. That's a good outcome for their families. But it's a bad outcome for tea because it prolongs today's oversupply, dragging on prices. When green leaf prices decline, growers pluck more too. They need to keep their income steady to meet their household spending needs. It's a good outcome for their families in the short term — but it worsens oversupply, keeping prices un- sustainably low. The best outcome is when green leaf prices remain extremely low for extended periods. Then farmers finally replace their tea bushes with more profitable crops. This reduction in supply can help relieve downward pressure on green leaf prices so that other growers can — if all goes well — thrive. Smallholders cultivating 10 hectares (25 acres) or less of lower grades of black tea dominate world production. Given the challenges of erratic weather, rising production costs, and consumer preference for quality, more smallholders should seriously consider switching crops. Perspective Commentary by Dan Bolton Less Tea, Please The productivity of aging tea bushes is de- clining, average yields per hectare are falling, and extended heat waves and droughts are eroding quality. Tea bushes today are more vulnerable to disease, insects, fungi, and other pathogens. For smallholders to survive, the tea industry must channel a greater share of retail revenue to the farmgate. No matter which growing region, when tea consistently sells below minimum price at auction, it's a clear signal to quit. Thresholds vary. The smallest smallholders will pluck, sort, and transport green leaf to the nearest bought leaf factory whenever the auction price for made tea tops $2 per kilogram. In much of India and Africa, this threshold is sufficient to pay smallholders the approximate cost of inputs, including fertilizer and chemicals to protect the plants and the cost of transporting tea to the fac- tory. The rate offers meager compensation for la- bor, however. Last year in India's smallholder dominated Nilgiris Hills, green leaf prices nose-dived from 25 cents (Rs. 16) per kg to 2 cents (Rs 8–10) per kg. The Tea Board's mandated minimum price for green leaf, based on the average sale price at auc- tion, declined to Rs 13. In the Nilgiris, laborers earn at least $7.50 (Rs 650) daily to pluck 30 kg of tea. That additional expense of 25 cents per kg is too high for many small-scale farmers who must then rely on family members to pluck leaves. They do their best, but with all their other daily chores, plucking rounds become irregular. The number of bushes that get pruned and properly tended is small. Quality suf- fers. Smallholders in Kerala State's Idukki district estimate that the minimum support price should be Rs 22 per kg. Unfortunately, even that is not enough to ensure decent livelihoods. Tea prices in Idukki rose to Rs 32 (40 cents per kg) in November and December last year, re- newing hope, just as India closed production for the winter months. But they plunged shortly after the first of the year. The Nakkubetta Nala Sangam (NNS) growers association, the main STG group in Nilgiris, decided to go on an indefinite hunger strike in August if the Tea Board failed to increase green leaf minimums. To rescue struggling tea farmers from this downward spiral, governments and associations should offer information, training, and incentives to switch to other crops. There are plenty of alter- natives. An institutional push to thin the ranks of tea growers could help diversify rural economies while allowing the most committed tea smallhold- ers to thrive. A reduction in tea oversupply and a rise in quality will lift prices, please consumers, and improve livelihoods in the long term. Dan Bolton is STiR's tea correspondent. T

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