Small Tea Growers in India Struggle with Unprofitable Prices, Leading to Migration Out of the Tea Business

Small tea growers in India, who produce over 50% of the country’s tea, are struggling to sustain their businesses due to the limited bargaining power caused by production scale limitations, insufficient backing, and support. They’re subject to non-transparent pricing, and there are now concerns about the viability of the sector, which could have serious socio-economic repercussions on livelihoods. To address this, the Tea Board of India has initiated a pricing study for plantation districts. A consultant will determine the price-sharing formula of all tea-growing districts in the country. The study will involve a physical visit to states such as Assam, West Bengal, Tamil Nadu, Kerala, and Tripura. The consultant team will assess the viability of small tea farms with up to 25 hectares’ tea cultivation areas and determine fair, remunerative prices for green leaf to ensure the overall well-being of the small tea growers and their employees.
Small tea growers in South India have already begun to migrate out of the tea business due to sub-optimal price realization, for instance, by selling their land to hotels and resorts and cultivating different crops for sustainable income. In contrast, in eastern India, 90% of tea farmers are still involved in the industry, but they are subject to non-transparent pricing and increasing cost-production barriers. The lack of regulatory framework for leaf agents in India is also problematic, as they play a crucial role in the tea value chain. They lack financing for leaf collection, machinery, and transportation, which is threatening the stability of the tea industry and farmers’ livelihoods. Providing remunerative prices for tea leaves could prevent tea farmers, their families, and communities from suffering socio-economic setbacks, particularly during a time of economic uncertainty.