Not even living wages for Assam tea farmers: Big brands can help but are they willing?

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Published: November 14, 2019 5:43:13 PM

While tea is a household essential and the most widely consumed beverage not just in India but across the world as well, those who produce it suffer in silent agony due to myriad of reasons.

The status quo will remain on selling of tea gardens.Paying a living wage to tea farmers will mean nearly tripling their share of income to 18.7%, or Rs 6.51 per 100g of tea sold. (Representative Image)

While tea is a household essential and the most widely consumed beverage not just in India but across the world as well, those who produce it suffer in silent agony due to myriad of reasons. The tea farmers in Assam toil hard in the fields for a pittance without any material benefits, and the bulk of the money is pocketed by big brands and supermarkets. However, bringing millions of Assam tea farmers out of their everyday misery is an achievable dream, provided supermarkets and brands are willing to share a larger part of income from sale of tea with the workers, a recent report by Oxfam India and TISS showed.

“Solutions lie in a fairer sharing of the end consumer price of tea, stronger gender policies and a review of plantation labour laws to ensure that women and men in Assam can lead dignified lives,” the Oxfam report said. Tea plantation farmers currently suffer from issues such as low incomes, unsafe working conditions, and lack of access to basic needs such as healthcare, housing, and drinking water.

Basic living wage vs Assam tea workers’ earnings

Lion’s share

Farmers at Assam tea estates get only about 7.2% of the proceeds of sale to end customers, Namit Agarwal, Lead Specialist Private Sector Engagement, Oxfam, told Financial Express Online. Bulk of the sale proceeds are kept by the brands, with the Indian ones keeping nearly 60%, while the USA brands keeping as much as 93% for the tea exported from the country. Thus, while the tea farmers get only Rs 2.60 per 100g of bagged black tea, brands and supermarkets in India get Rs 20.2 for the same bag, sold at Rs 34.4 to consumers. Tea farmers’ share of 7.2% is inclusive of social security benefits such as PF/Gratuity etc.

Actual income share from Assam tea sale proceeds

Paying a living wage to tea farmers will mean nearly tripling their share of income to 18.7%, or Rs 6.51 per 100g. This would lift the tea farmers from their present wage levels of Rs 153 per day to the living wage of Rs 400 per day, Oxfam said, citing 2017 estimates.

Desired Income Share From Assam Tea Sale Proceeds

Doing their bit

Two major tea brands in India that Financial Express Online spoke to shared the concerns about tea farmers’ condition, and said that they are willing to contribute towards betterment of the tea farmers. “Our Responsible Sourcing Policy embodies our commitment to dignity and the rights of the employees of our suppliers and other business partners,” a Hindustan Unilever spokesperson told Financial Express Online. According to the company’s website, Unilever sources high tonnage of tea from Assam, not just for sale in India, but globally.

Global Brands’ & Supermarkets’ Share From Assam Tea Sales

Tata Global Beverages Ltd, another major tea player, which brings brands such as Tetley to India, said that a significant portion of the company’s tea costs are sourcing costs. “In addition, we also invest in initiatives to help improve the living and working conditions of tea plantation workers in Assam. We are one of the partners of the ‘Improving Lives Programme’ with UNICEF which aims to help improve the lives of Assam tea communities.” a spokesperson for TGBL told Financial Express Online.

However, TGBL declined to answer the question whether it would take steps so that a bigger amount of sale proceeds of the tea floats back to the tea farmers. HUL didn’t respond to the same question.

Too little?

There are several other ways in which brands and big tea companies can ensure better living for tea farmers. According to suggestions by Oxfam, there are several steps that brands such as Unilever and Tata can take. “Large buyers like Tata and Unilever are increasingly buying from BLFs (bought leaf factories) that can provide tea at a lower cost. While BLFs are subject to the requirements of the Indian Factories Act, Minimum Wages Act, and the Payment of Wages Act, the growers that supply them are not subject to regulations under the Plantations Labour Act (PLA) and so have lower overheads,” Oxfam said.

The companies must favour suppliers who implement PLA requirements and incentivise and enable others to do so. Also, tea brands can also ensure that the costs of labour are excluded from price negotiations with fresh tea producers and/or that prices enable a living income for small tea growers, Oxfam said.

Indian Tea Association — the largest industry body of tea plantation in India — didn’t respond to an email query, and was not reachable on the phone.

Hindustan Unilever’s full response:

“We welcome Oxfam’s report and are acutely aware of the issues in Assam. We remain dedicated to respecting and promoting human rights and good labour practices to drive sustainable change. Our Responsible Sourcing Policy embodies our commitment to dignity and rights of the employees of our suppliers and other business partners. As part of our commitment to transparency, we recently published a full list of global tea suppliers, as well as an interactive map showing the work we are doing with partners to support tea communities around the world. This includes major programmes to strengthen women’s rights, improve women’s safety, improve health and sanitation, support biodiversity and address climate change”.

Tata Global Beverages’ full response:

“Tata Global Beverages is committed to the fair and ethical treatment of people across its supply chain and works with several partners, including Rainforest Alliance, trustea and The Ethical Tea Partnership to strive for an industry that benefits the livelihoods of farmers, is socially just and protects the environment. 

 A significant portion of our tea costs are sourcing costs. In addition, we also invest in initiatives to help improve the living and working conditions of tea plantation workers in Assam. We are one of the partners of the ‘Improving Lives Programme’ with UNICEF which aims to help improve the lives of Assam tea communities.

The Tetley brand that we sell in our international markets i.e. UK, USA, Canada, Australia, Europe and Middle East is 100% Rainforest Alliance certified since 2016. In India, about 60% of the tea that we buy is trustea verified. We are confident that we will be able to source 100% trustea verified tea by the end of 2020. All teas that we buy in India are produced from factories that are licensed by the Tea Board and have an FSSAI registration. The Trustea certification is over and above this and is a sustainability standard focused on environment, human rights, occupational health and safety.

We recognize the complexity of the challenges in Assam. The nature of these challenges is systemic and require the intervention of multiple stakeholders including government, industry and civil society. Tata Global Beverages welcomes constructive dialogue and engagement between all concerned parties, to improve farmer livelihoods and ensure the sustainability of the tea plantations industry in Assam.”

  • Edited by Shaleen Agrawal

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