Chai Pe Kharcha?

Storm In The Tea Cup

• Tea production decline over April, May: 30 million kg
• Production has increased marginally from 1,116 mn kg in 2011 to 1,126 mn kg in 2012 and 1,200 mn kg in 2013
• A further 5-10 per cent hike in tea prices is possible
• Decline in rainfall in February has affected the industry; Assam and West Bengal estates being the most affected
• Budget support for plantations decreased from Rs 501 cr in 2012-13 to Rs 369 cr in 2014-15

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As it enters its third week of governance, the new NDA government has something to talk about over tea—chai pe kharcha. Tea production has declined steeply in Assam and West Bengal. A spell of bad weather—poor rainfall in February and March—has left the tea leaves scorched on the bushes and denuded large chunks of plantations in both states. As a result, tea production in April and May has been lower by an estimated 30 million kg or 2.5 per cent of India’s total tea production of 1,200 million kg in 2013. But it’s premier tea country Assam and north Bengal—the scenic Dooars, Upper Assam, Lower Assam, Siliguri and Darjeeling—which account for most of the production fall.

To deliver them from this bad spell, the tea industry expects the government to increase outlays to the Tea Board. If the government does not do so, then the aam teaholic will have to bear the additional chai pe kharcha. So far, tea prices have remained ‘firm’—the commodity opened 5-10 per cent higher in 2014 compared to 2013, and another hike cannot be ruled out.

For a PM who made full capital of his chaiwalla origins after it was derided by the opposition and turned it into a successful leitmotif of his campaign with his Chai pe Charcha sessions, the fate of tea should indeed be of prime concern, especially as the crop’s dec­line is unprecedented. With chai having worked the magic for Modi in some measure, it’s time the PM returned the favour. And what better opportunity than the upcoming Union budget, due within a month, where the FM is widely expected to balance the interests of farmers, industrialists and emp­loyees, exactly what the tea industry needs. It employs 1.2 million people directly, including bagaan workers, and West Bengal is currently negotiating a wage agreement with them.

“You may consider the characteristics of this government and the express focus on tea during the campaign stage of elections,” says Monojit Dasgupta, secretary general of the Indian Tea Associa­tion, voicing the hope. “Having said that, the tea industry is not just about what it finally produ­ces—tea. It’s also about the backyard of tea; where it’s grown, processed and manufactured and how. A lot of hard work will have to be done to und­erstand this aspect of tea, beyond just drinking it.”

The point is, what the industry needs isn’t a quickfix or sops. What it needs instead is infrastructural help, like say irrigation canals. This is besides its large quotient of fixed costs—from manure and herbicides to wages.

Since 1991, a younger crop of tea-growers has come up and now produces over 30 per cent of the tea in West Bengal and Assam. “Their bushes are young,” says Dasgupta. “In the organised sector, tea bushes are 30-50 years old. Though tea production rose from 1,116 million kg in 2011 to 1,200 million kg last year, the older bagaans do need help.”

This week itself, the much larger Luxmi Group bought Darjeeling’s iconic Makaibari estates at a price just in excess of Rs 20 crore. Other fam­ily-owned gardens are still fighting off the end of their era. Tea’s other threat comes from coffee, the other plantation crop that vies for a place in the Indian consumer’s mug, and is doing a good job of catching the youngsters’ fancy. Tea needs to reinvent itself, and fast.

“Don’t overestimate the coffee habit,” warns K. Ramakrishnan, president, marketing, Cafe Coffee Day. But he does admit: “When Indians congregate out of home to talk or discuss anything, it’s over coffee at a cafe.”