Challenges plague Barak Valley's tea industry, govt asked to intervene

BNE News Desk

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Silchar: The Barak Valley tea industry, nestled in a challenging topography, faces myriad obstacles threatening its viability. While the whole country is rejoicing at the completion of 200 years of Assam Tea's glorious existence, the current status of the tea industry stands at the edge of uncertainty. The industry in the country, in the state of Assam, and more specifically in the Cachar region is on the brink of almost terminal decline.

With a production capacity of 40-45 million kilograms and an average price realization of Rs. 150-170 per kilogram, juxtaposed against production costs of Rs. 190-200 per kilogram, the industry teeters on the brink of collapse. Over the years, the number of operating tea gardens has dwindled from 115 to 101, exacerbating concerns among industry stakeholders.

The production of tea in Barak Valley witnessed a decline to 38.81 million kilograms in 2023 from 40.93 million kg in 2022 and, the production was lower by 2.12 million kilograms (5%) in 2023 in comparison to the production of tea in 2022, marking a worrisome trend since 2017. Notably, 70% of the region's production comes from 37 tea gardens, while the remaining 30% stems from others. However, the average yield per hectare in 2023 was around 1070 kg, which has steadily declined since 2004, raising alarms about long-term sustainability.

In the marketplace, the industry grapples with diminishing price realizations. Auctions at the Kolkata and Guwahati Tea Auction Centers recorded a decline in average prices, indicating financial strain for tea producers. The average price realization up to sale no: 12 through KTAC is Rs. 173 per kg in 2023-24 against Rs. 181 per Kg in 2022-23. Similarly, price realization through GTAC for tea produced in Barak Valley during 2023-24 is Rs 151 per kg and in 2022-23 it was Rs. 156  per kg. Moreover, the cost of inputs like coal, fertilizer, gas, electricity, and wages has surged over the past decade, outpacing the growth in tea auction prices. It has risen at the CAGR ranging between 8% to 15% in the last 10 years whereas the North Indian Tea Auction prices registered a mere growth of 3%  CAGR in the last 10 years.

Sushil Kumar Singh, Chairman of the Tea Association of India Barak Valley at its 49th annual general meet on 28th March 2024 said that efforts by the Tea Association of India notwithstanding, the industry contends with poor labor productivity, further straining the garden economy. 

Singh mentioned the present minimum cash wage of workers per day is Rs. 228 in the tea estates of Barak Valley which constitutes around 60% of the cost of production.

Labour productivity in the South India area is 1350 kg, in Brahmaputra Valley 750 kg, in Barak Valley, it is only 310 kg. Barak Valley employs nearly 80,000 workers, making it a vital economic driver in the region, he added.

In response to these challenges, Singh mentioned that the state government initiated several measures such as interim wage increases for plantation workers.

The government notified an interim increase of Rs. 18 in October 2023 with effect from 1st October 2023, resulting in a revised daily wage of Rs. 228 per day in Barak Valley, he added. 

However, sustainable solutions necessitate remunerative prices for manufactured tea, an issue requiring urgent government attention, Singh said.  Singh further called for reinstating previous systems of food grain distribution and reducing production costs throughout the industry.

Moreover, amidst climate change concerns, technology adoption such as precision agriculture which includes GPS mapping, IoT sensors, and data analytics offers promise for enhancing productivity and mitigating environmental impacts. However, the financial resources required for such initiatives remain scarce, Singh said.

Despite the hurdles, Barak Valley tea gardens boast lower Maximum Residue Levels (MRL) compared to other regions, positioning them as a beacon of quality and health benefits, Singh said. "So, we appeal to the Tea Board and Central Government for targeted promotion of Barak Valley tea, highlighting its health benefits and exceptional quality which could bolster the industry's prospects, Singh added."

While challenges loom large, government intervention and industry-wide collaboration are imperative to safeguard the future of Barak Valley's tea industry, asserted Singh.

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BNE News Desk