The Hindu Business Line : A win-win tie-up for small tea growers

Munnar, Nov. 2 Having harvested 4,000 kg of green tea leaves from their small plot of 2.5 acres in September, R. Babu and his wife Sini are a very happy couple. At Rs 13.50 a kg for green leaves that translates into Rs 54,000 as returns from this small to tiny holding for that month alone.

“The Gods and the weather have been kind to us ensuring high productivity, while good demand and firm prices prevailed in the tea plantations of Munnar,” says Sini Babu.

Kanan Devan Hills Plantation Company (KDHPC) that bought the tea leaves from her small holding has also made a neat profit in the bargain. It would take close to four kg of green leaves for producing one kg of processed tea. Taking other incidental costs it would require Rs 60 worth of green leaves to manufacture one of kg of processed tea.

Output, demand

The processing costs at the factory would work out to Rs 8-10 a kg – taking the total production cost to around Rs 70. With prices averaging close to Rs 90/kg, the company would make a profit of Rs 20/kg.

But things are not quite as simple as they seem, warned Mr C.K. Mohan, Manager, Bought Tea Operations, at KDHPC. The surplus global production and low demand had driven tea prices to abject lows three to four years ago and impoverished most of the small growers. Plucking of leaves ceased and the small tea plots were laid waste.

“We found it economically unviable, ceased plucking operations and watched in dismay as weeds and pests invaded our small plots,” recalls Johnson Varghese, a small grower of tea. Companies like Kanan Devan came forward and played a dominant role in revitalising the small growers. We are building a long-term relationship with the small growers and it is already yielding results: profits for the farmer and the company, pointed out Mr Mohan. We have helped small growers by providing them with high-yielding clones, fertiliser and pesticides and most importantly the technology and wherewithal to cultivate and harvest the tea leaves in a scientific manner. Given the handsome margins involved, there are many takers for the produce of the small holders and factories are queuing up to buy their leaves.

Uniform quality

Unlike the tea plants of the large plantations, most small growers cultivate the same clones in their holdings, ensuring that the tea produced is of the same uniform quality. Requiring limited labour they pluck the leaves at the most appropriate time ensuring the best quality leaves and high productivity from the plants. Being their own plants the care and support that they provide to the plants are unmatched by plantations.