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  1. Tea is turning into a bitter brew; Bibek Debroy explains

Tea is turning into a bitter brew; Bibek Debroy explains

Estate factories that use their own leaf for processing run losses. Cultivation, as opposed to manufacturing, by organised tea estates will probably die out. Note that today, estates are rarely able to meet their obligations under the Plantations Labour Act.

By: | Updated: July 27, 2017 6:37 AM
tea, tea consumption in india, NSS, National Sample Survey, Camellis sinensis, tea import, tea import in india, tea estates, tea estates in india, Plantations Labour Act Small tea-growers have a business model different from that of tea estates, and estates are the ones in real trouble. (Image: PTI)

I am not sure about the data source behind this assertion. It is probably derived deduction from FAO numbers. After water, the second most popular drink in the world is tea. For India, figures have firmer footing, courtesy NSS (National Sample Survey). Per capita figures are low. Even then, across states, including coffee-drinking ones like Tamil Nadu and Karnataka, Indians drink a lot of tea, much more than coffee. Around 85% of Indian households consume tea. (It is a little less in urban India and a little more in rural.) Off and on, there have been suggestions that tea should be declared India’s national drink. Though that hasn’t happened, since 2011, tea has been Assam’s state drink.

Tea, in the form we know it now, is not quite an indigenous Indian drink, though some form of Camellis sinensis was indeed drunk locally. The British introduced and popularised tea. Tea is often referred to as “the cup that cheers”. We often forget the year of the original quote. This was William Cowper in 1785. “And while the bubbling and loud-hissing urn/Throws up a steamy column, and the cups/That cheer but not inebriate wait on each, So let us welcome peaceful evening in.” In 1757, Samuel Johnson wrote an Essay on Tea. Officially, tea was first imported into Britain in 1660 and subsequent decades saw an explosion in tea-drinking.

Who imported this tea and from where? There are stories about tea having been discovered in China in 2737 BCE and until 19th century, China was the only major producer. The East India Company imported tea from China. There were several changes in mid-19th century. East India Company’s monopoly on China trade ended in 1833 and other British companies could take part. As long as monopoly lasted, East India Company didn’t look towards other production centres for sourcing tea. The Opium Wars, and the period between two Opium Wars, made Britain’s trade with China uncertain.

Initially, there were attempts to import Chinese seeds and plant them in India. In 1793, there was such an attempt in the Shibpur Botanical Gardens (now named after Acharya Jagadish Chandra Bose). “Among its greatest triumphs may be considered the introduction of the tea-plant from China, a fact I allude to, as many of my English readers may not know that the establishment of the tea-trade in the Himalaya and Assam is almost entirely the work of the superintendents of the gardens of Calcutta and Seharunpore.” This was Joseph Dalton Hooker in 1855 (Himalayan Journals).
More important than imported Chinese plants, indigenous tea was discovered in Assam. Initially, there was doubt about whether Assam “tea” was really tea. Eventually, the assamica variant was accepted as tea. But before that, in 1834, William Bentinck set up a Tea Committee and since Assam tea was still not recognised as tea, this Committee pushed for Chinese plants and even Chinese growers and workmen. Upper Assam also passed into the hands of East India Company and Assam Company was set up. This was a private company and East India Company passed on its tea holdings to Assam Company in 1840.

Let’s skip things like Wasteland Rules (liberal land) and harsh labour legislation for imported labour (Workmen’s Breach of Contract Act 1859, Transport of Native Labourers Act 1863, Inland Emigration Act 1882, Assam Labour and Emigration Act 1915). There were 51 tea gardens in 1859 and the number increased to 160 in 1862. Tea was introduced in Assam and Indians started drinking tea. Tea is produced elsewhere in India. But more than half (52%) comes from Assam, in Brahmaputra and Barak Valleys and a bit in Cachar. Whenever tea is mentioned, one hears of tea estates, tea gardens and tea plantations. Estate, garden and plantation are used as synonyms and lack precise definition. (There is a definition of “tea estate” in Tea Rules, 1954, but that doesn’t make it precise.)

Today’s Assam is geographically different from the historical Assam, so one must avoid that comparison. Assam had 785 tea estates in 1951 and 1,012 in 1994. The number increased to 30,942 in 1999 and 43,293 in 2004. This kind of growth is unbelievable, but the reason is statistical. Before 1998, small growers weren’t counted. There are guesses that there are 68,500 small growers in Assam now. Exact numbers are unavailable because registration (with Tea Board) isn’t mandatory and can’t be, though incentives are conditional on registration.

What is a small grower? A small grower won’t have an in-house factory to process leaf, but will sell it to bought leaf factories or estate factories. (Tea Board allows small growers to have micro and mini factories.) There is a land-holding ceiling too, 10.12 hectares by Tea Board and 4.28 hectares by Assam government.

A long list of problems is faced by India’s tea sector and Assam’s tea sector is often mentioned. While those problems are real, clearly small growers have a business model different from that of tea estates and estates are the ones in real trouble. Average realised price must be higher than average cost of production. That is typically the case for bought leaf factories and estate factories when they purchase leaf from small growers. But estate factories that use their own leaf run losses. Cultivation, as opposed to manufacturing, by organised tea estates will probably die out. Note that today, estates are rarely able to meet their obligations under the Plantations Labour Act.

Author is Member, NITI Aayog. Views are personal.

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