Assam Tea in the 21st Century: Prospect for Plantations towards a Thriving Tea Industry
Assam is the largest tea producing region in India, producing more than half of the tea output in the country with an approximate 507 million kg annually. The total area under tea cultivation in Assam is 3,12,210 ha out of the total agricultural crop production area of approx. 7,10,000 ha. Being world-famous for its Second Flush orthodox, Assam tea is recognized with the Geographical Indication (GI) tag for its brisk and malty character. This combination of flavors is derived from a delicate balance in nature, nurtured by a unique environment and culture conducive for tea cultivation.
The landscape in Assam is dotted with over 800 registered tea gardens where the plantation is the basic unit of tea production, characterised by big growers who contribute to more than half (the rest being small growers) of the total annual production volume of tea in the State with approximately 380 million kg, based on 2019 Tea Board figures. However, these plantations face acute challenges today with rising cost of production leading to corresponding low profit margins, looming labour issues and falling output in the peak seasons due to floods and excessive rainfall. The industry has so far responded to these issues from a reformist standpoint- adapting to the immediate circumstances. However, what is needed is a stir around systems-change approach- Can the plantation structure contribute towards a sustainable tea industry in the 21st century?
Plantations- Root Cause of the Problem?
Producers claim that market prices of made tea have stagnated. Coupled with rising labour costs- which account for over 60% of total cost of production- crop maintenance and costs for power and electricity, cost of production in a plantation has become untenable, making it even higher than the selling price of made tea. In other words, profit margin is declining. Simultaneously, there has been the rise of models like ‘small tea growers’ and ‘bought leaf factories’ which, unlike the plantations, do not have a residing worker population, thereby significantly reducing their cost of production. But the industry needs to have a roadmap for the future of the ‘plantation’ itself- as much for the fact that it is the largest organised private sector employer, providing livelihood to 1.2 million people, as for the future of tea.
How is the tea industry responding to the issue of rising cost of production? Let us consider the call by several producers for relaxation in their labour costs by government takeover of statutory welfare provisions as outlined in the Plantation Labour Act, 1951. Is the government ready and willing to take over the welfare of approximately 8 lakh people in the State who form the permanent workers in the tea industry? Amidst this tussle of accountability for welfare responsibilities between the producers and government, hangs the reputational risks for the industry, marred by numerous reports highlighting dismal working standards and human rights issues.
In recent years, claims about the Plantation Labour Act (PLA) being archaic have led to calls for it being repealed. The government has subsumed the PLA into the Occupational Health and Safety (OHS) Code introduced as part of the new labour codes. However, it is not clear whether this would reduce the producer’s obligations under PLA. There are studies which indicate that regulatory frameworks which uphold laws (such as PLA) instill greater accountability because of its applicability and implementation on the ground as compared to universal certifications. But should we also not ask whether plantations upon which the Act is based upon, is relevant anymore? While on the one hand proponents for repealing the Act argue that no other industry is as liable to its workforce, it must also be taken into account that no other industry has characteristics like that of a 19th century plantation, which stand as an anachronism today.
The primary characteristics of a plantation in terms of labour is that of an ‘enclave-economy’, which means labour supply and its subsistence needs are met within the plantation itself. In such an economy, markets and profits for the finished product are always externally oriented, as historically tea cultivation was primarily started to meet the demands of the colonial empire. Hence, local markets in the small towns developed only to the extent necessary to meet demands for raw materials for manufacturing tea. The plantation served best to have a continuous stream of labour supply as families were settled within it, while also managing to function in isolation from the local economy. But every system needs an overhaul, a need to adapt with time. The colonial foundations of the plantation seem to be on shaky grounds today, as the rigid compartment of the enclave economy is gradually loosening and labour is moving out. In the long run, transitions can lead to transformations.
Plantations are seeing acute shortages of labour to work in the gardens today, exacerbated by absenteeism. While alcoholism remains a major cause of absenteeism, reasons for shortage of labour go beyond. With easy transport and communication to nearby towns and cities, many workers choose to work outside the plantations, thus absorbed into the informal economy. Neighbouring small tea growers also present an attractive alternative with a cash wage of over INR 300 along with tea and lunch. Accusations of low wages are opposed by the organised sector which argues that the in-kind benefits (including ration, housing etc.) and job security offered to families over generations add up to a much higher cost borne by the companies. It then becomes pertinent to ask why, despite all the benefits offered by the organised sector, does one look for work outside the plantations? It’s about time the tea industry looks at these issues from a different perspective.
Increasingly large section of the youth does not find it dignified to work at a plantation anymore. One of the reasons for this is rising aspirations of the youths and the inability of the plantation system to adapt with it. This factor is significant and urgently calls for companies, government and civil society to usher in a change which infuses a sense of dignity in work. This should include recognising work in tea as semi- skilled labour, ensuring a living wage and a decent standard of living for its workers.
Having said that, the industry must strive for a systemic shift towards a modern 21st century enterprise, where labour is fluid and open, unlike now when particular communities have become associated with the labour population in the gardens. Due to this nature of generational workers in the plantation, the plantations have not been able to become truly competitive nor productive.
2020 witnessed a triple whammy with the pandemic, floods and then excessive rainfall. However, floods and extreme climatic conditions have been a regular affair over the last few years in Assam, especially in the peak months of June, July and August, which produce the world-renowned Second flush. The worrisome fact is that shifts in the temperature also affects quality and yield of tea. Studies have already started projecting that Assam might be unsuitable for tea cultivation by 2050.
An interesting documentary on climate change, Kiss the Ground, proposes a solution to the climate crisis- sequestering carbon back to the soil through means of regenerative agriculture. The tea plantation, an outcome of the colonial mission to ‘civilise’ and ‘tame’ the jungles, involves monoculture cropping pattern with an average plant productivity of forty (40) years. This homogenous cropping destroys the natural ecological cycles of nature and its ability to regenerate. The use of chemicals and fertilisers further depletes soil health affecting productivity in the long-run and its expenses further shoot up the cost of production. This also results in unfamiliar invasive species and pests. Most importantly, this form of cultivation hinders the natural ability of the top soil to sequester carbon due to tillage and use of agro-chemicals, loosening up the soil and increasing the chance of soil/water erosion. This part of the plantation problem is seldom discussed and deliberated upon in the industry. Perhaps it is too ambitious, but warrants extensive research.
As a first step, it needs to be acknowledged that wages are not fair and steps should be taken to implement the minimum wage of INR 351.33, as recommended by the Committee set up by the Government of Assam. The government and buyers need to be proactive in this regard and find solutions to achieve this, considering the rising fixed labour cost which ought to adversely affect the producers. Also, producers could work towards vertically integrated models whereby they market their own products, allowing greater control on the end consumer price which would result in reducing their burden on the labour cost. The industry needs to have stringent mechanisms for price regulation like a minimum reserve price such that producers receive a fair price for their teas, enough to ensure a decent standard of living for their workers. At the plantation level, producers need to collaborate on organised and innovative campaigns among the workforce to promote working in a tea plantation as skill-based dignified work. This includes shifting perception and behaviour among the civil society as well, towards the communities working in the tea gardens.
For the long term, stakeholders across the value chain need to come together in partnerships for a well-planned transition from plantation to more holistic, fair and regenerative agricultural models by pulling in their collective resources, forming working groups and developing a plan to scale up already successful models for the future of tea cultivation.
Today, the industry needs a progressive vision for Assam tea.