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Tea industry faces challenges, hopes to see through gloom

By Ron Duarah
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DIBRUGARH, May 4 - The COVID-19 pandemic has brought unexpected challenges and difficulties to all stakeholders of the tea industry, as it has to all other sections of human society. The tea industry resumed operations in the first week of March after the customary three-month �off season�. The regular maintenance activities in the gardens had been impacted since December, starting from the anti-CAA agitation contributing to initial crop loss. The manufacture of teas during the first flush had barely commenced, when the Union government had to bring in the first lockdown.

Speaking to this newspaper, All Assam Bought Leaf Tea Manufacturers� Association (ABLTMA) advisor Deven Singh and chairman Chand Kumar Gohain spoke at length on the position of the industry. Based on the conversation, it is assumed that in view of the prevailing situation in the country, tea may see better days, but after detailed due diligence. The tea industry had been able to resume manufacturing from mid-April, but due to the overgrown tea bush, necessitating skiffing/shearing, a major crop loss has been observed. The estate plantations and the small tea growers are both badly hit, with the small growers bearing the major brunt of this, as their plantations are younger. The factories remained shut for three weeks and the subsequent resumption with much lesser quantity of green tea leaves has led to a spike in their operating costs.

Amidst the losses to all concerned in the tea industry, the bought leaf factories have supported their supply chain of small growers and communities by providing rations and extending financial support. The tea industry is presently having to operate with a reduced work force of 50 per cent and the present spiralling financial outgo on wages, electricity charges, interest to bank and other fixed expenses despite the very low production, is crippling the industry. Even though, the governments are handicapped with resources, various sections of the tea industry have been seeking more support, in view of the large section of society dependent on the industry for livelihood.

Due to this cessation of manufacturing activities from the third week of March and much curtailed operations from mid-April which are expected to continue up to mid-May � the tea industry is looking at a crop shortfall of 10 per cent or at least 125 million kg. In rupee terms, this crop loss would be approximately Rs 1,750 crore, considering an average realisation of Rs 140 per kg, as tea prices are more buoyant, as compared to the previous years. This amount of Rs 1,750 crore is the notional loss, as this amount would have been available among the stakeholders of the industry, if the crop loss would not take place.

There is a consequent loss to the exchequer by way of lesser GST and income tax, besides collateral loss from lesser allied activities. During these difficult times, some factories have indulged in unethical practice of manufacturing tea from poor quality leaf/skiffed leaves, which is reflected in the much higher production in their factories, as compared to the trend in the tea industry. The Tea Board of India should immediately intervene in these types of unethical practices which bring a bad name to the industry at large.

The coming days shall be extremely challenging for the tea industry with rising costs and rising expectations from the large workforce and small growers. The number of persons directly dependent on the estate sector is around four million, whereas three million would be dependent on the small growers and bought leaf tea factories, and another million would be dependent from the allied sectors like shops, establishments, garages, transporters, warehouses, brokers, etc.

The Government of Assam has been working tirelessly to protect the citizens from COVID-19, reaching out to the masses with last mile assistance and help, ensuring no one dies of hunger, providing support to the tea industry by waiving off the minimum demand charges on the supply of piped natural gas by the Assam Gas Company Limited and a multitude of other measures to alleviate the sufferings of the industry and its stakeholders. The Central government has announced payment of employer and employee�s share of the provident fund aggregating to 24 per cent for the next three months and a similar gesture on the part of Assam Tea Employees Provident Fund Scheme, shall be helpful.

The Tea Board of India is already seized of the situation, where a crop loss of 125 million kg is projected and exports may be impacted, in the near future. The Tea Board needs to double up its efforts of promoting tea as a health drink. The immunity boosting properties of tea need to be widely advertised. An area-based countrywide campaign should be launched in the print and electronic media supported by leading citizens of the said area. This shall result in increase in domestic consumption.

The world order is already undergoing a sea change and the tea industry has a golden opportunity to make the most of this change. All stakeholders in the tea industry need to wholeheartedly work at changing the mindset of all the involved persons starting from small tea growers, who need to be continuously educated to emphasise the importance of good plucking standards and sustainable practices to be followed in these changed times. This will result in a significant improvement in the quality of teas and the consequent increase in the price realisation. Higher price realisations shall provide the much needed support to the government from the increased revenue by way of GST and income tax. Better quality and sustainable production will also enable a jump in the export of teas and �Assam Tea� shall regain its glory in the tea world.

The Tea Board of India � statutorily mandated to develop the industry � has a God sent opportunity to undertake this activity, which shall have a far reaching impact on the tea industry. It goes without saying that this would, in turn, result in prosperity percolating down to the first link in the chain of the tea industry � the small growers. With approximately 50 per cent of the total tea produced in Assam attributable to the small tea growers, this is an opportunity to pull the tea industry back from the brink of uncertainty that has been staring it in the face since the past few years, and proceed with firm resolve on the path of progress, prosperity and well-being.

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Tea industry faces challenges, hopes to see through gloom

DIBRUGARH, May 4 - The COVID-19 pandemic has brought unexpected challenges and difficulties to all stakeholders of the tea industry, as it has to all other sections of human society. The tea industry resumed operations in the first week of March after the customary three-month �off season�. The regular maintenance activities in the gardens had been impacted since December, starting from the anti-CAA agitation contributing to initial crop loss. The manufacture of teas during the first flush had barely commenced, when the Union government had to bring in the first lockdown.

Speaking to this newspaper, All Assam Bought Leaf Tea Manufacturers� Association (ABLTMA) advisor Deven Singh and chairman Chand Kumar Gohain spoke at length on the position of the industry. Based on the conversation, it is assumed that in view of the prevailing situation in the country, tea may see better days, but after detailed due diligence. The tea industry had been able to resume manufacturing from mid-April, but due to the overgrown tea bush, necessitating skiffing/shearing, a major crop loss has been observed. The estate plantations and the small tea growers are both badly hit, with the small growers bearing the major brunt of this, as their plantations are younger. The factories remained shut for three weeks and the subsequent resumption with much lesser quantity of green tea leaves has led to a spike in their operating costs.

Amidst the losses to all concerned in the tea industry, the bought leaf factories have supported their supply chain of small growers and communities by providing rations and extending financial support. The tea industry is presently having to operate with a reduced work force of 50 per cent and the present spiralling financial outgo on wages, electricity charges, interest to bank and other fixed expenses despite the very low production, is crippling the industry. Even though, the governments are handicapped with resources, various sections of the tea industry have been seeking more support, in view of the large section of society dependent on the industry for livelihood.

Due to this cessation of manufacturing activities from the third week of March and much curtailed operations from mid-April which are expected to continue up to mid-May � the tea industry is looking at a crop shortfall of 10 per cent or at least 125 million kg. In rupee terms, this crop loss would be approximately Rs 1,750 crore, considering an average realisation of Rs 140 per kg, as tea prices are more buoyant, as compared to the previous years. This amount of Rs 1,750 crore is the notional loss, as this amount would have been available among the stakeholders of the industry, if the crop loss would not take place.

There is a consequent loss to the exchequer by way of lesser GST and income tax, besides collateral loss from lesser allied activities. During these difficult times, some factories have indulged in unethical practice of manufacturing tea from poor quality leaf/skiffed leaves, which is reflected in the much higher production in their factories, as compared to the trend in the tea industry. The Tea Board of India should immediately intervene in these types of unethical practices which bring a bad name to the industry at large.

The coming days shall be extremely challenging for the tea industry with rising costs and rising expectations from the large workforce and small growers. The number of persons directly dependent on the estate sector is around four million, whereas three million would be dependent on the small growers and bought leaf tea factories, and another million would be dependent from the allied sectors like shops, establishments, garages, transporters, warehouses, brokers, etc.

The Government of Assam has been working tirelessly to protect the citizens from COVID-19, reaching out to the masses with last mile assistance and help, ensuring no one dies of hunger, providing support to the tea industry by waiving off the minimum demand charges on the supply of piped natural gas by the Assam Gas Company Limited and a multitude of other measures to alleviate the sufferings of the industry and its stakeholders. The Central government has announced payment of employer and employee�s share of the provident fund aggregating to 24 per cent for the next three months and a similar gesture on the part of Assam Tea Employees Provident Fund Scheme, shall be helpful.

The Tea Board of India is already seized of the situation, where a crop loss of 125 million kg is projected and exports may be impacted, in the near future. The Tea Board needs to double up its efforts of promoting tea as a health drink. The immunity boosting properties of tea need to be widely advertised. An area-based countrywide campaign should be launched in the print and electronic media supported by leading citizens of the said area. This shall result in increase in domestic consumption.

The world order is already undergoing a sea change and the tea industry has a golden opportunity to make the most of this change. All stakeholders in the tea industry need to wholeheartedly work at changing the mindset of all the involved persons starting from small tea growers, who need to be continuously educated to emphasise the importance of good plucking standards and sustainable practices to be followed in these changed times. This will result in a significant improvement in the quality of teas and the consequent increase in the price realisation. Higher price realisations shall provide the much needed support to the government from the increased revenue by way of GST and income tax. Better quality and sustainable production will also enable a jump in the export of teas and �Assam Tea� shall regain its glory in the tea world.

The Tea Board of India � statutorily mandated to develop the industry � has a God sent opportunity to undertake this activity, which shall have a far reaching impact on the tea industry. It goes without saying that this would, in turn, result in prosperity percolating down to the first link in the chain of the tea industry � the small growers. With approximately 50 per cent of the total tea produced in Assam attributable to the small tea growers, this is an opportunity to pull the tea industry back from the brink of uncertainty that has been staring it in the face since the past few years, and proceed with firm resolve on the path of progress, prosperity and well-being.

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