Reading the tea leaves, it’s hard not to paint a somewhat bleak picture for southern India’s tea industry. Recent issues have plagued the area and have taken a toll on what has, in the past, been a formidable cornerstone of the subcontient’s tea output.
As one of the biggest producers of tea in the world, India’s problems could have widespread effects, allowing new nations to emerge as viable competitors or assuring the predominance of other producers like China and Japan.
The issues are concentrated in the southern part of India, where some of the problems at hand include erratic weather patterns, damaged crop land that has yet to be repaired and competition from fierce rivals like China, who hold a tremendous stake in the tea market.
In addition, government subsidies for pesticides and fertilizers have also been cut short in a push to promote organic tea farming. With a higher demand around the world for organic products, the move is necessary for long-term growth but is also crippling in the short-term for farmers who are used to employing conventional pesticides to keep crops intact.
While increased wages at tea plantations have been a boon for workers, labor costs have gone way up. Countries like China are able to produce tea with much cheaper labor, helping to maintain and expand a robust tea industry. In northern India, wages for workers have stagnated. It’s a loss for workers, but it’s allowed producers in the region to weather through unpredictable weather changes and crop yields.
At tea plantations in southern India, cuts in workforce and the addition of farming machinery have helped assuage the problem a little bit, but the cost of labor remains very high. It’s becoming increasingly difficult for producers from the region to be on a level playing field with their competitiors.
In response to the crisis, India has joined five other tea producing nations (Kenya, Indonesia, Malawi, Rwanda and Sri Lanka) in creating a tea cartel, aimed at stabilizing the price of tea production. There’s no telling if they’ll be able to achieve that goal with other countries producing tea more cheaply.
Meanwhile, the question remains: can India strike a balance between fair wages for its workers and low production costs?
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