Sustainability of Kerala Tea Industry in the fast changing geo-political scenario

of the worldPresentation by

Rakesh KumarAsstt. Director of Tea

Development2014

TEA BOARD INDIAMinistry of Commerce & Industry, Department of Commerce

14, B.T.M Sarani, Kolkata – 700 001www.teaboard.gov.in

304.04104.4412.29

106.85

Area under Tea (in Th. Ha.)India

Assam

West Bengal

Other North Indian States

South India

629.05312.1

23.92

243.71

Tea Production 2013-14 (in Million Kgs)

Assam

West Bengal

Other North Indian States

South India

24244.87549.11

529.76802.38817.49

6732.29

Area under Tea (in Ha.)Kerala

IdukkiKollamTrissurTrivandrumPalakadWayanad

21%

7%

19%

53%

Major Tea Growing Zones in Idukki District

Vandiperiyar

Peermade

Elappara

High range or Munnar

Tea Statistics

46%

22%

15%

9%8%

Major cost component in Tea

CultivationProcessingSocialOverheadGeneral

2010 2011 2012 20130

20

40

60

80

100

120

140119.51 117.19

135.59 139.95

67.69 70.17

87.3998.75

North India

South India

Auction Prices during 2010-13(in Rs/Kg)

PROFILE OF KERALA TEA INDUSTRY

PLANTATION DISTRICT

TOTAL NO.OF BIG TEA GARDENS(AREA IN HA)

TOTAL NO.OF SMALL TEA

GROWERS/AREA IN HA.

TOTAL NO. OF ESTATE

MANUFACTURING UNIT

TOTAL NO. OF BOUGHT LEAF MANUFACTURI

NG UNIT

IDUKKI 56(21947.57 Ha)

3679(2297.35Ha)

42 07

KOLLAM 02(548.71 Ha)

01(0.40 Ha.)

01 00

TRISSUR 01(529.76 Ha)

00 01 00

KOTTAYAM 0(0.00 Ha.)

50(79.74 Ha.)

00 00

TRIVANDRUM 04(802.38 Ha)

00 01 00

PALAKAD 04(817.49 Ha)

00 04 00

CALICUT (KOZHIKODE) 00 06(27.02 Ha.)

00 00

WAYANAD 25(5367.62 Ha.)

2009(1364.67 Ha.)

11 03

TOTAL 92( 30013.53 Ha)

5745(3769.18)

60 10

Source: TMS

GOOD AGRICULTURAL PRACTICES

CONSERVATION OF THE BIO DIVERSITY BY SUSTAINABLE METHOD OF CULTIVATION

QUALITY & SAFETYADHERENCE TO THE SAFETY STANDARDS FOR PRODUCTION OF

TEA

ECONOMICS : RISING COST OF PRODUCTION

SOCIAL ISSUES:LABOUR INTENSIVE

Sustainability in Tea: Back to Nature

CHALLENGES BEFORE THE TEA INDUSTRY: ALL INDIA

Labour Intensive Industry

Global Scenario: Losing position due to high cost and poor to average quality

Competition with other beverages like soft drinks, Horlicks, bournvita, coffee etc.,

Linking production to market

Emergence of new grower country like Vietnam, Indonesia & Kenya

High Percentage of ageing bushes leading to low productivity and low rate of uprooting & replanting

High Production Cost: almost 80% of the cost alone is on fixed expenses like fuel, power & Labour

Ignorance of consumer about market structure

Improper Marketing of Tea : The current auction system mainly controlled by the “brokers” and proper price realization is doubtfulTea is ready to drink item, the downstream stages such as blending, packaging and ultimate marketing are the most profitable one and in Tea all such profit margins are collected by the handful of stakeholderTea producer are ignorant of the market demand which has a direct impact on the long term sustainability of tea IndustryBirth of small tea growers & BLFs who is now contributing almost 32% of the total tea production are mainly scattered, un-organized and devoid of technical know-how , lack of extension services, poor farm practice & logistic ,affecting the quality of teaEnvironment Loss- Significant bio-diversity loss, High Energy Consumption, application of pesticides & fertilizers affecting the large no. of different species, leading to pollution to water etc.,

CHALLENGES BEFORE THE KERALA TEA INDUSTRY

More than 75% of the total tea cultivation is confined to only one district – Idukki

Loss of Biodiversity :50% of the area under Idukki District falls under reserved forest. Conversion of Forest land into plantation results a threat to the Bio-diversity

Change in climate due to ecological deterioration

Degrading ecology exacerbated with large scale Eucalyptus plantation to meet the high thermal energy requirement in processing unit and loss of Biomass too

Large numbers of concentration of small tea growers in Idukki District scattered mainly in the four tea growing zones who lacks the basics of technical know-how of tea growing vis-à-vis conservation of environment

High Percentage of ageing bushes leading to low productivity and low rate of uprooting & replanting

High Cost of production and low productivity (70% of the total tea area is above 50 years of age)

Mismatch between tea prices and Labour wages including social welfare cost

High Agriculture tax – levied @ 50% which is the highest for any tea growing State

Lack of soil conservation method leading to soil erosion , loss of top soil & landslides

Almost 80% of the landscape of Idukki District falls under High Range Mountain Landscape represents the Western Ghats in terms of its ecological attributes, socio-economic profile and development trajectory. Tea occupies an extent of 142 Sq. Km of the total land use under HRML

Environment Loss- Significant bio-diversity loss, High Energy Consumption, application of pesticides & fertilizers affecting the large no. of different species, including pollution to water etc.,

Tourism:. This has increase the demand of land use, new infrastructure, encroachments, pollution, overcrowding, intensive resource use viz., water and electricity, etc. thus becomes a threat in conserving the biodiversity & the environment

INITIATIVES TOWARDS SUSTAINABILITY OF KERALA TEA INDUSTRY Good Agricultural Practices

Conservation of Bio-diversity by adopting sustainable approach in cultivation process

Planting alternative and different species of shade trees and energy plantation other than Eucalyptus species

Adopt alternative source of thermal energy to reduce the dependency of bio-mass. Saving energy by adopting proper energy efficient option by doing energy audit assessment at regular interval in Each tea factory

Back to the Nature Plantation -The uprooting & Replanting of tea bushes as well as replacement planting may be done by adopting only “Organic method of Cultivation”

The unproductive /old senile tea bushes shall be uprooted @ of minimum 2% of the total tea area so as to follow a cycle of renewing the entire tea estate in every 50 years.

Selection of Planting Material – High yielding good quality clones which are suited for the region viz., resistant to pest & disease , drought resistance shall be preferred for planting

Reduction in the use of chemicals, pesticides, weedicide etc., which has an adverse affect on the climate and bio-diversity. The banned chemicals shall not be used in plantation sector. Follow the Board’s Trustea and PPC Code.

Linking production with market so as to maintain the Demand – supply of the product

Value addition

Tourism- The new tourism destination in the High Range Mountain Landscape shall be discouraged

Training & Capacity building to tea farmers & groups towards sustainability in tea and organizing the small tea growers into SHGs

Geographical Indication of the teas grown in Kerala /Idukki for Quality enhancement and enforcement on tea is important for trade promotion as done in case of Darjeeling, Assam & Nilgiris tea

Improvement in the present marketing system of Tea viz., Maximum participation of the buyers in purchasing from any part of India, redefining the role of broker in the present auction systems etc.,

Field Mechanization to overcome the shortage of Labour and to reduce the cost of production

Sustainability in Kerala Tea Sector

Role & Responsibilities

Tea CompaniesOwners

STG

Research & Development

GovernmentCentral &

State

Consumers

NGOs

Buyers, Tea Traders & Pack

tiers

Role Of Stakeholders towards sustainability of Kerala Tea Industry

Role of Stakeholders towards sustainability in Kerala Tea IndustryOwners/Tea Companies/STG/BLFs

Plough back the profits back to garden

Adopt GAP in the tea gardens

Follow the Government guidelines and different Act in spirit viz., Plantation Labour Act, Factories Act, Tea Act & TMCO, FSSAI etc.,

Improve the working condition in garden

Maintain transparency in every step from cultivation to marketing

STG shall improve the quality of leaf and form SHG/Co-operatives to get the benefits of Govt. initiatives/setting up own T.F

BLFs shall take only good quality leaf for processing and shall provide advisory service to the STGs towards GAP

Conserve the environment and Bio-diversity in every step

All Processing Unit shall go for Quality Certification ISO/HACCP and the estate shall also go for Organic Method of cultivation

Check for the Quality parameter before getting out of the tea from factory premise/commercial use

Buyers/Tea Traders/PacketiersMaintain the transparency in the entire value chain

Pass on/distribute the profit margin equally to all value chain

Provide additional price for the tea produced by way of sustainable approach

Do not lobby to dilute the social protections or the welfare measures meant for the workers

Conduct Multi-stakeholder meetings and appraise them about the market preferences and the quality and quantity requirements

Do market research both domestic & International and share the outcome to all the value chain

Maintain the demand-supply margin to keep the prices under control

Do not stock tea for future marketing

Obtain quality certification for packaging or blending units as well as for the brand

Check for the quality parameters by sending the sample to NABL accredited Laboratories before commercial use for FSSAI parameter & MRLs

Role of Stakeholders towards sustainability in Kerala Tea IndustryNGOs

Shall undertake the Social Welfare Program , educate the workers towards good health and better working environment

Impart trainings on sustainable method of cultivations, conservation of environment and bio-diversity

Improve the workers by developing their skills , other livelihood method other than dependency on pay roll to the gardens so as to overcome the situation of crisis of closure of the gardens

Encourage the owner/planters/tea traders to implement effective code of conduct

Impart training to workers towards safety measures while doing work in garden, handling hazardous chemicals for spraying etc.,

Support for broad based rural development, including the development of local processing capacity and producer association, and measure to improve credit and risk management facilities

Educate the growers about the different social & welfare measures and unite them to get the facility

Assist the small tea growers in formation of the SHGs/Societies and help in necessary tie up with the producer for selling their tea leaves at reasonable price

Arrange the stakeholder meeting for sharing their experience to the entire value chain and to work out a model for sustainability on Tea

ConsumersShall buy the products that are manufactured through sustainable approachShall participate in the awareness program call for all the stakeholders to have an overall knowledge of the entire value chain of tea industryShall look for the different certification which have a guarantee on different quality aspect of Tea

Shall visit the official site to acquaint themselves of the product

Always look on the details printed on the product for their quality and in case of any doubt shall report to the concerned authority for action

Must devote some time to fill up the feedback form which help in the improvement of the product

Shall buy the product from genuine shop and retailer only

Shall promote such teas which have a larger social value and that have produce keeping the environment value in every step of productionShall undertake a self assessment on the Health Aspect of Tea in compare to all the beverages available in the market

Role of Stakeholders towards sustainability in Kerala Tea IndustryGovernment

Shall develop a module cum policy for overall growth of the tea industry and its sustainability

Shall review all the different Acts implied to Tea Estate under the present Scenario and ensure that those Acts are implemented in spirit without violation at any stage

Shall act as a Friend, Philosopher and Guide to the Tea Industry

Ensure safety of the product by way of regular monitoring, evaluation and review

Improve the marketability of the product both in Domestic as well as International platform

Shall conduct regular stakeholder meeting to know the problems of the Tea Industry and its solution

Strengthen the relationship between STGs and BLFs and proper sharing of the prices

Make preferential procurement of tea possible for different government departments

Ensure that the tea produced had follow the sustainable approach and by way of different conservation method for the environment & Bio-diversity

Ensure transparency in all value chain

Ensure proper credit facility and financial assistance schemes to encourage the value chain to take up all the development & quality measures to set a guarantee towards sustainable growth of product and it’s safety

Research & DevelopmentThe research wing shall undertake the research on the basis of the necessity of the entire value chain

Shall evolve the Planting Material that are best suited for the different climatic condition and shall resistant to the diseases and pest as well as the condition like drought /waterlogged

Shall undertake the research on the safety of the product

Shall regularly conduct the stakeholder meeting and appraise the scientific findings to the entire value chain which helps in improving the overall quality of made teaImpart regular Training / Workshops / Seminars for the benefit of the different stakeholders

Impart regular training to the STGs/ SHGs to create an awareness towards Good Agricultural Practices , conservation of soil in hilly terrains etc.,Conduct Lab to Land program, mobile advisory service

Find alternative shade trees other than mono cropping

Find alternatives of the thermal energy in Tea Factories to reduce the pressure on the biomass

Forecast different weather condition and the field operation suited in defined regions

TEA BOARD INDIA & ITS DIRECTORATE : ROLE

Tea Board India

Tea Developmen

t

Research

Licensing

Tea Promotion

Establishment

Statistics

INITIATIVES TAKEN BY TEA BOARD OF INDIA TOWARDS SUSTAINABILTY OF TEA

Good Agriculture Practice: Engage UPASI-KVK & Boards’ Official to provide free advisory service to the Tea Estate , Factories, STGs and SHGs on different cultivation/manufacturing process

Old & Senile Tea Bushes: Design & Implemented SPTF Scheme to uproot & Replant the Old unproductive tea bushes with elite clones, Replacement of Old Tea Areas with better productive land and Rejuvenation of the Tea Bushes for which the Subsidy @ 25% of unit cost is being paid

Plantation Development Scheme: Subsidy @ 25% of the unit cost for the other field activity viz., Irrigation, New Planting for small tea growers etc.,

Improvement in Quality: In addition to field, subsidy @25% of the unit cost is being paid for modernizing the tea factory and for product diversification, value addition and for obtaining quality Certification (@50% of cost or Rs.1.00 Lakhs)

Social Issues: Design & Implemented Labour Welfare Scheme to provide education, training and better Health to the workers of Tea Garden and its dependentIntroduce TRUSTEA code and Plant Protection Code as a policy towards ensuring GAP and Safety of the Indian Teas. Registered Geographical Indication & Logos for better tea tradeOrganizing fairs in India & Abroad for promoting Indian Teas

Organizing Buyer-Seller meet for better market research and to create a demand for Indian teas

Set up Small Growers Development Directorate to look after the rising entrepreneurs who shares almost 32% in the total tea production (Globally 70% approx.)Monitoring, Evaluating & Reviewing all the initiatives taken for upgrading and effecting implementation of the policy initiatives

THANK YOU

END OF PRESENTATION