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Lacking support, Nepal’s tea refuses to grow

Lack of adequate and regular training and facilitation has always acted as a motivational dampener to tea farmers. For a long time, due to lack of Nepal’s own independent home brand names, most of the tea that is exported to India is sold under other brand names.

Lacking support, Nepal’s tea refuses to grow

representational image (iStock photo)

Nepal’s tea industry has not been able to carve out a niche for itself in the global market and find itself in a position to reap the economies of scale despite its chequered history spanning over 150 years.

Even today, myriad gnawing problems continue to plague the tea industry, ranging from certification, labour shortages and high cost of organic farming to branding, failure to identify new export markets, lack of updated technology and expertise. Nepal’s history of tea production dates back to the establishment of Ilam Tea Estate in 1863. However, the country has not been able to increase the production of either orthodox tea or organic tea owing to several factors.

Lack of certification and appropriate modern technology, price intervention, market access, branding and lack of skilled manpower can be cited as some of the reasons. Farmers continue to struggle with inputs for organic tea even though demand is on the rise, and it has the potential to fetch higher prices.

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Key informant interviews conducted by the writer with tea entrepreneurs in Barbote, Ilam suggest that farmers are unsure if cow manure that is considered organic in nature provides the requisite nutrients to the tea leaves or not. There are no pre-established standards as to how many green leaves a plant should produce to be considered healthy production.

In order to be in a position to fix the price for their produce, farmers and entrepreneurs don’t even get adequate support from the available state mechanisms. There is a gap between what consumers are paying as the final price and what farmers are receiving at their end. Most farmers employed in tea are smallholder farmers and are, therefore, deprived of the economies of large-scale production.

The issue of lack of certification is considered by tea entrepreneurs to be the primary reason for the failure of Nepali tea to command fair prices in the international market. Even the certification that was started of late is mainly carried out through third party organic certification. But for certification, orthodox tea couldn’t have entered the international market and command premium prices.

However, research regarding value chain analysis of orthodox tea suggests that income levels of certified tea growers are lower than those of non-certified tea growers. Certified tea growers mainly focused on the organic certification of output coming from small scale producers who could not command higher prices in the domestic market.

The high cost of organic certification also poses a big challenge to tea growers, along with procurement of organic fertilisers and bio-pesticides in required quantities. The inability to secure a remunerative price, inter alia, is the most disheartening issue for farmers, forcing them to switch to other high yielding crops such as rubber. In the absence of proper certification and direct access to international markets, farmers are being forced to export orthodox tea to India at a low price. They are not able to avail themselves of government subsidies, and do not have access to funds for their business expansion. In many places, lack of clarity about the cooperative model of operation and functioning for tea estates is resulting in their failure.

Of course, some sporadic initiatives have been made and support mechanisms put in place by development partners such as the Netherlands Development Organisation (SNV), Inclusive Growth Programme (UNNATI), GIZ, Winrock International and others. They acted as enablers and tried to support the industry, especially by focusing on value chain components such as provision of reliable access and collection points, storage facilities and small irrigation systems. They are also supporting tea growers in product promotion and marketing. However, the sustainability of such initiatives has remained highly debatable.

Lack of adequate and regular training and facilitation has always acted as a motivational dampener to tea farmers. For a long time, due to lack of Nepal’s own independent home brand names, most of the tea that is exported to India is sold under other brand names. Of late, Nepal has started production of specialty tea, albeit on a limited scale, but commanding high value in the international market. The non-availability of skilled human resources is coming in the way of scaling up such operations.

Tea farmers are a disgruntled lot as there is no proper recognition and appreciation for producing high quality tea, howsoever modest the volume might be. Lately, tea cultivation has started in other districts, especially in the western part of Nepal, on a commercial scale, besides the 14 districts where it has traditionally been grown. However, feasibility studies need to be carried out for identifying the potential for commercial production of organic, orthodox and specialty tea. Thus, carrying out research studies on the changing tastes and preferences of people as well as exploring the possibility of developing new flavours of tea given the ecological and geographical variations become highly critical.

Likewise, specific research on branding initiatives to identify niche markets and segments becomes an imperative. Identifying and carrying out cost-cutting measures in an effort to boost productivity should become a priority on the part of the government along with producers and entrepreneurs. While there is an urgent need to reduce the cost of organic certification, the state should put in additional efforts to put effective mechanisms in place for product validation and credible certification. As certification alone may not be enough, timely initiatives should be taken to secure a trademark for all varieties of tea.

Keeping in mind the fact that small holder farmers are not able to utilise the facilities announced by the state, proper and alternative mechanisms might be devised for providing technical and financial support to this particular farmer community. To offer them some kind of respite, they can be made beneficiaries by extending agricultural loans on a group guarantee basis under a production cooperative model.

Recognising the proven utility of the production cooperative model for products like milk and sugarcane, a further boost may be given for producing tea on similar lines. In order to ensure availability of skilled labour, training of manpower in all stages of tea production from withering, rolling, fermenting and drying to sorting and packaging need not be overemphasized.

(The Kathmandu Post/ANN.)

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