Tea Board grading of plantations stirs up organised players against BLF-small growers

After grading 1,413 organised plantations in the country, the Tea Board is toying with the gradation of bought-leaf factories (BLF), which account for nearly 40 per cent of India’s 1,200 million kg production.

If the Board decides go for such rating, the industry may witness a serious churn, as the organised plantations would demand applications of similar methodologies on BLFs, which would remove their cost advantage.

In its survey, carried out without any official notification to individual planters, the Tea Board rated only 14 estates — eight from Assam and six from Bengal — in the A+ category.

A majority of the 87 Darjeeling gardens failed to make it to the top grades, and South Indian gardens lagged way behind.

The gradation was based on three basic yardsticks: field practices, good agricultural practices and workers’ welfare.

Workers’ welfare is a major drag on nearly 1,100 North Indian gardens, including nearly 800 in Assam. But except in Darjeeling, they fared better on a majority of the field and agri practices parameters, including re-plantation, age of bush, irrigation and so on.

Owing to high labour welfare costs, low returns and low re-investment problems, South India fared poorly on these parameters. The survey found 75 per cent of the bushes in Kerala and 59 per cent of those in Tamil Nadu are more than 50 years old.

In comparison, only 30 per cent tea bushes in Assam and 38 per cent in Dooars Terai regions of West Bengal are more than 50 years old. The older the tea bush, the lower the yield and the lower the resistance to pest attack and adverse weather conditions.

Apparently, the Board did not give any prior notice for the survey to prevent chances of collusion. But planters’ associations are now finding fault with that.

“I must know that my garden is in competition,” said one of the largest planters.

There are apprehensions that any negative rating may impact the margins, which are already stressed because prices have stayed flat for at least five years now, in the context of the serious cost competition from BLFs in the limited domestic market.

And that has brought the industry face to face with the BLF-small grower segment on the gradation issue.

Unlike organised planters, BLFs buy green leaves from farmers at low cost. Their overheads are limited to running the factory, and that too with temporary labour. Pressure on black tea prices, if any, is passed on to farmers.

The result is that labour accounts for 60 per cent of the cost of organised plantations, 60 per cent of BLF production cost is attributed to green leaf.

“We should demand application of similar methodologies to rate BLFs. It would force them to oversee farm practices and labour welfare measures by small growers. The dual economy practices must end,” said N Lakshmanan, owner of the Golden Hills Estate, a South India-based planter.

Azam Monem, Executive Director of the world’s largest tea producer McLeod Russel, pointed out that small growers need to be paid adequately to have resources enough to plough back and produce quality teas.

Monem, who also wears the hat of chairman of Indian Tea Association, thinks good practices will help small growers play a role in increasing India’s tea exports.

The recommendations, if accepted by the Tea Board, will in effect bring in contract farming values in tea farming.