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| INDIAN TEA INDUSTRY | |||||||||||||||||||||||||||||||||||||||||||
| The
Current Situation in the Tea Industry is Buoyant |
Interview with M. G. V. K. Bhanu, Chairman, Tea Board of India | ||||||||||||||||||||||||||||||||||||||||||
What is your assessment
of the current situation on the tea industry in India?
The current situation in the tea
industry is buoyant. With the fine balance between demand and supply
the tea prices remain stable and remunerative to the producers and
affordable for the consumers. After the prolonged recession between
1999 and 2007, the prices started moving towards north and continue to
do so till date. This has helped the planters at all levels and across
all regions to sustain the process of consolidation. Both
production and prices moved steadily upwards in tandem over the past
five years and over the last two years the production has breached one
billion kg mark and it is expected to be a highest ever record crop for
the current year as it is expected to touch at least 1185 m.kgs –
recording an increase of around 60 m.kgs over the 2012 level.
How do you view the Indian tea sector’s significant progress since independence?
It will be evident from the above table
that there had been a
significant progress in production, productivity and domestic
consumption. While there had been only a modest increase in the area
under cultivation (72%), the production had increased more than
fourfold (446%). This increase in production could be attributed to
the significant contribution of Tea research institutes in
developing high yielding quality clones and recommending various
improved crop husbandry techniques to the industry because of which the
productivity had almost increased threefold (261%). The most striking
feature is the phenomenal increase in the domestic consumption from a
meager 51 million kg at the time of independence to 891 million kg last
year an increase of 1747%. It would imply that almost the entire
increase in production had gone to serve the burgeoning domestic
consumption leading to a near stagnant export volume hovering around
200 million kg since independence.
Where do Indian tea industries stand compared to international tea sector? Today more than 36 countries produce tea
in the world. In the
international ranking India stands at 2nd position in production and
consumption next to China and 4th position in exports. The leading
exporting countries in the descending order are Kenya, China, Sri Lanka
and India. It would however be worthwhile to note China produces mainly
green tea, whereas India produces mostly black tea. The share between
Green and Black tea in the total world production is in the ratio of
31:69. Amongst the black tea producing countries, India ranks 1st both
in production and consumption.
What are the key issues tea sector is facing today? The most important challenges that the
industry is faced with include
stagnation and declining production and productivity in the bigger
plantations owing to old age with more than 40 of the standing bushes
having crossed the economic threshold age limit of 50 year.
Tea being a labour intensive crop, scarcity of labour is the 2nd
biggest challenge which is more acute in south Indian
plantations. With mushrooming of bought leaf factories (stand
alone factories sourcing green leaf from small growers) safe guarding
the quality image of Indian tea by not allowing any dilution in quality
standards is the third most important challenge. It is also important
to note that the performance of all tea growing regions have not
been uniform – accentuating the distinct and diverse challenges that
are evident in different tea growing areas -- climate change, incessant
pest attacks, unevenly distributed rainfall to name but a few of the
most of important ant challenges for the planters..
Which are the thrust areas for tea sector in India? Addressing the above noted challenges
are the thrust areas for the tea
sector. Most importantly over the last five years, the industry having
consolidated its losses sustained during the recession period from 1999
to 2007, should now focus on investing on the renovation of field
assets by undertaking large scale uprooting and replantation and
replacement of old tea areas, introduction of mechanization in the
field operations to overcome the shortage of workforce, adoption of
good manufacturing practices by the BLFs and good agricultural
practices by the small growers. There is a need for balanced and
inclusive growth whereby the organized and small grower segments can
develop in synergy with each other and not at the cost of one or the
other. Need for quality upgradation of the small grower produce and
most importantly sustainability safety and compliance issues of the tea
grower segment aligned to global standards.
How do you look at the future of Indian tea sector? Given the steady demand for tea within
the country, I feel there is no
sun set for the industry and I would look at it as an
evergreen industry. Recent scientific evidences of goodness of tea for
human health and people becoming more health conscious, particularly
the youth, the demand for tea world over would be much more
stronger in the future provided the food safety standards are
maintained in letter and spirit since discerning consumers continue to
demand sustainably produced products.
What will be the future strategy of Tea Board? Tea Board has drawn up a strategic
vision for the tea to address the
challenges before the Indian tea industry which are twofold. First one
is to ensure that the tea is supplied at a price remunerative to the
producers and affordable to the domestic consumers and the second is to
produce sufficient surplus to meet the export requirement in order to
retain and improve India’s share in the world market. During the course
of last four decades the global production has gone up manifold mainly
due to entry of new producing countries such as Vietnam and large scale
expansion of tea area in African countries and consolidation of small
holdings in China. For LDCs, tea is the major export earning crop
and hence resorted to expansion and offer tea at a competitive prices.
Whereas tea situation in India is totally different from those
countries. In India there is a strong domestic demand and it is
steadily growing due to population growth. On the other hand because of
old age of the plantations, the productivity is declining.
Secondly, owing to surplus world production, the tea industry went
through one of the longest depression from 1999 to 2007. Given this
background, the strategic vision is not to chase the volume but to go
in for high value teas. Thus, sustainability of reasonable prices
in the domestic market and to maintain and improve the export earnings
are the two main objectives and they could be fulfilled, if only the
tea industry continues to maintain sustainability in production,
productivity, cost control with profit for supporting the
livelihood of more than 1.2 million workforce employed in the tea
plantations. Keeping this in view, the production and export targets
for the XII Plan period have been worked out. The XII plan
proposals have been drawn up for fulfilling the desired goals
viz: improving Production and productivity, infrastructure
for quality improvement, value addition and export backed with suitable
R & D support and human resources.
What is your board doing about improvement of the quality and export of Indian tea? As part of the quality promissory
particularly to our global market two
separate Tea Councils have been set up one each for North and
South India, the primary purpose of which would be to monitor exports
and enforce quality. The activities of the Council are not
disruptive but reinforce the quality promissory for our global
customers. At this juncture I would hasten to reiterate that the
quality promise is equally for our consumers at home. Food safety
and standards provisions under FSSAI reinforce the food safety
promise. The Board accords the highest priority to compliance
under these food regulations.
As regards exports, concerted activities
are being taken up under the
banner of the 5x5x5 programme covering the focus markets of Russia,
Kazakhstan, Iran, Egypt and USA. All of these markets are being
nurtured save Egypt which saw political and civil disturbance. A
strong delegation to Iran – led by the Tea Board Chairman – resulted in
increasing tea exports to this market. Clearly Iran with its
preference for Orthodox tea – particularly Assam – presents a great
opportunity to increase our exports both in volume and value
terms. The Rupee payment route furthermore has provided a
facilitation that India’s competitors cannot fall back on and we must
take advantage in further consolidating the presence of Indian tea in
the Iran market. India also put up a strong presence at the
recently concluded North American Tea Conference displaying its
commitment in terms of both sponsorship and related activity to
acquaint the US Tea Trade with the variety and quality profile of
Indian tea. The speciality and quality segment has been growing
in the US and there are opportunities for growing this segment in the
years to come.
On the aspect of export promotion the
Tea Board is alive to the
need for more inclusive efforts on this front covering the various tea
growing regions while Darjeeling, Assam, Nilgiris are household words
in a large array of markets abroad the full potential of our Dooars and
Terai and Cachar teas have not yet been realized. Tea Board will
endeavor to promote these regional teas with greater intensity both in
the export and domestic markets.
How do you see the tea industry in the year 2020? Having already highlighted in pare 6
& 7 above the outlook and
strategies for the future, I would see that the industry would remain
stronger and continue to be the world leader in production of black
tea. With the consolidation of the small holdings, creation of
awareness as to the quality standards and more maturing of the younger
plantations both in the small sector and organized sector, there shall
not be any shortage in the supply of good quality tea to meet the
domestic demand in full and at the same time retain a reasonable share
in the global market.
What about the recent activities of Tea Board? Ever since I joined Tea Board in
November 2011, I have been working
hard for making Indian tea as the world’s most preferred beverage.
During the course of last two years stewardship of Tea Board I have
taken several initiatives for streamlining the functioning of the Tea
Board which would include introduction of biometric attendance,
delegation of powers to Zonal offices for effective discharge of
regulatory functions and disbursement of subsidy at the quickest
possible time, shifting of offices closer to the plantation areas for
better interface with the planting community, establishment of new
Directorate with adequate technical manpower to render technical and
financial support to the small tea growers, constitution of District
Monitoring Committees to address the disputes between the growers and
manufacturers, formulation of a National Programme for Tea Regulation
for ensuring adherence to the Food Safety Standards, revision of
guidelines for issuing licences to the factories, setting up of Tea
Councils for close monitoring of the quality of tea exported and
imported for re-exports, organizing awareness campaign on food safety
regulations in all the tea growing regions, cancellation of licences of
the bogus exporters etc.
Any comments on the Government policy? Polices of the Government are more
aligned to the initiatives of Board
towards overall development of the tea industry in India.
Have you any observations on any other issues? Nil.
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| RNI No.
WBENG/2008/27737 |
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