Assam tea plantations' slump continues

At tea country Assam, it has been a long summer of discontent. It has witnessed falling prices of tea leaf, dip in exports and labour unrest and a slump that began with the collapse of the USSR its biggest customer in 1991.
The plantations had just about recovered when in 2001 another big-demand country Afghanistan got caught up in war. This was the period of the biggest dip in demand for tea. The slump lasted till the end of 2002 but the plantations never quite recovered.

India is still the largest producer of tea in the world with 850 million kilogrammes output in 2006, it is a $1.5 billion industry. Assam alone with its 800 tea gardens and 12 lakh labour force accounts for 55 per cent of the market.

Money for years made tea gardens a favoured target of militants. Since the late 1970s when the insurgency began till even now managers are abducted and killed over extortion demands.

Militancy over the years had almost been absorbed as an unwritten account by the tea estates. However, what it has not been able to absorb is the rising losses.

And since 2001 the plantations have has seen more downs than ups. Last week, one of Assam's best quality teas was priced 10 per cent lower than what was five years ago. About 40 big tea plantations have shut down leaving thousands jobless.

Loss of profits

In existing plantations, loss of profits has meant cutting labour benefits like ration and bonus and labour rage and attacks on managements have become quite common.

''The way I look at it is that when an industry passes through a prolonged recession and in absence of any imaginative solution, there will be stage like this that will crop up,'' said Manoj Jalan, Deputy Chairman, Bharatiya Cha Parishad.

Brewing more trouble for the plantations are industry majors HLL and Tata who are exiting the estates.

The 24 estates owned by the Tatas in Assam and Dooars in West Bengal have been formed into a new company that wants to start growing alternative crops as well. The labourers have even been offered stakes.

But thousands of men and women like Anjali Karmakar who have been plucking leaves for decades don't see how any other crop can succeed in this land.

''We will suffer. We are used to all the facilities, and now all that is over. Bad times are ahead of us,'' said Anjali, Tea estate labourer.

Small business

''If you look at the profile of Tata and HLL, in their business portfolio tea is a very small business that employs a large number of workers in comparison. So perhaps they got out because it was not worth the time,'' said Jalan.

''In a crisis we have to understand what it is and come up with a creative solution. Exiting is only one of the options. And it is not feasible for everyone to exit and I do not think there's no solution either,'' he added.

The irony is that the price of the leaf maybe sliding down. But because the process is labour-intensive the social cost of making tea in India still remains one of the highest in the world.

So superfine brews at over Rs 2,000 a kg and even average leaf at about Rs 120 a kg is costlier than anywhere else.

Naturally blenders have started buying tea from cheaper countries like Vietnam. Just last year 30 million kilogrammes of tea was imported that was then mixed and re-exported as Indian tea. While a genuine export surplus piled up at the plantations.

Tea plantations are one of the last legacies of colonial grandeur and culture. But as market leaders exit the estates and plantations sink under losses, this could well be the beginning of the end of the Planter's Raj.

Source: www.ndtv.com