Nilgiris tea and the brewing of a crisis

At the start of the current millennium, the Nilgiris saw a turn of events that were most unlikely in its glorious history. Plantation farmers, most of them Badagas, revolted against the government as the price for Green Tea Leaves (GTL) had dwindled. Initially restrained, the protest soon turned violent when three public buses were set on fire. The centenary celebrations of the famed Ooty Flower show (1999) was also cancelled following growing resentment by local planters. The situation was in danger of spiralling out of control.

To address the crisis, a one-day seminar, called the “Future of Tea in the Nilgiris”, was organised on September 4, 2000, by the ‘Save Nilgiris Campaign’, after a signal from the Chief Minister’s Secretariat. Every stakeholder across the industry came together to draw attention to the plight of the industry and discuss paths to take. It is unfortunate that a quarter of a century later, the remedy remains elusive.

Participants flagged the reasons for the price decline and highlighted the need for reforms. The facts were there for all to see: an over-reliance on Russian exports, poor quality management, auction gimmicks, adulteration and local market negligence had together resulted in a crisis. From the late 1970s, Nilgiris tea had overwhelming market support in the erstwhile USSR. The land cover of this plantation crop in the Nilgiris rose by 36% between 1985 and 1995 and small tea growers welcomed the flow of unprecedented wealth and income.

Then things changed. The collapse of the USSR and the devaluation of the rouble by 30% worsened the existing situation for small growers. They were reeling under high production costs, which were proportional to the quality of the product. An excess of factories in weak feeder areas reduced GTL quality. The total capacity of tea factories in the Nilgiris was more than double that of crop production. Though tea experts endorsed the well-oiled functioning of the auction system, unhealthy practices began to disrupt operations at the Coonoor auction centre. Some producers had taken money in advance from brokers, pushing them to supply made tea at fixed rates. From 1990, sales at Coonoor rose while those at other centres across India declined. Yet average prices stayed the lowest. This disparity highlighted the need to streamline quality and trading.

According to the Tea Board of India, the Nilgiris tea industry covers about 46,481 small tea growers with an assessed plantation area of 34,408.85 hectares. The main demands of these growers include a minimum GTL price, a base auction price, and recognition of this plantation crop as an essential commodity under the Ministry of Agriculture. Currently, tea remains under the ambit of the Ministry of Commerce. Though the health benefits of tea are well known, trade interests have ensured that tea is treated as an item under commerce. Government schemes and subsidies have failed to deliver the goods. The call by the United Planters’ Association of Southern India, the apex body, to go in for intercropping has not gained ground. The situation demands renewed trust among battered growers.

To overcome this persistent cost price crisis, growers and producers must implement strategies that result in a win-win situation. Progressive small tea growers must look at innovation and mechanisation during the phases of plucking and pruning. They must look at self-employment to avoid heavy labour costs. Most bought leaf factories have been successful in branding and direct trade, in-line with the outcomes of the seminar. However, they should also explore tea exports to CIS countries and encourage sales in untapped domestic markets.

Of late, second- and third-generation planters have begun to move to the IT sector, and are hiring labour. The reluctance of next-generation producers to target CIS markets is a result of apathy or due to a lack of global marketing competence.

The government-run INDCOSERVE and TANTEA could also lead the way by becoming price leaders, as they have access to one-fourth of GTL procurements among bought leaf factories. There is great potential for value-added products as the Nilgiris is capable of producing some of the best tea in the world — the “champagne among teas”.

Yukesh Saravanan is a member of the Nilgiri Documentation Centre, The Nilgiris. His work focuses on the environment, indigenous communities and local history