PRODUCTION CONDITIONS IN SMALL TEA GARDENS IN ASSAM
2.4 Factors of Tea Cultivation in Small Gardens
The section is based on the research by scholars probing the various factors affecting the small tea cultivation.
Cost of Production: The cost of cultivation is divided as variable costs (cost of labour, material cost, land revenue, etc.) and fixed costs. The cost incurred by the small tea farms on labour and materials expenditure is considered as operational and maintenance cost to carry out day-to-day operations (variable cost). In the study of Bhuyan et al. (2004) the composition of operational and maintenance cost is found to be high in lower size groups (below 2 ha.) in comparison to higher size (2 ha – less than 10.12 ha). In his study it is revealed that among the various items of costs, labour is the dominating component accounting significantly largest share of 62.85 per
is family labour. In the larger size groups, the percentage of hired labour increases while that of family labour declines gradually. The study of Bhuyan et al. (2004) indicated the fact that the operational and maintenance activities of small tea farms is not only costly, but highly labour intensive as well. Share of expenditure on labour cost shows an increasing trend with decrease in farm size while those of manures and fertilizers, plant protection chemicals and herbicides shows an increasing trend with increase in farm size.
Goswami et al. (2006) maintain that various expenses incurred in a small tea plantation are clustered into two broad heads of expenditure, i.e., ‘Investment/Establishment Cost’ and
‘Operating and Maintenance Cost’. The expenditure incurred by growers for establishing tea plantation during the period from planting to first bearing stage is regarded as initial investment cost or establishment cost. As the small tea growers receive returns in the form of green leaves from the third year onwards, when tea bushes start producing, hence, the expenditure incurred by the growers during the first two years of their tea cultivation is considered as establishment cost (and after five years tea bushes attain maturity and give a steady production for about 40 years) (Goswami et al., 2006). Fencing, agricultural implements, labour, manures and chemical fertilizers, planting material (tea), planting material (shade) and plant protection chemicals are the major items which constituted the establishment cost of tea. The establishment costs show that 30.9 per cent of the total cost is labour cost and 69.1 per cent consists of other costs.
Planting material (tea seedlings) is the other dominating cost component. A major portion of the investment/establishment cost is incurred in the first year of planting followed by the second year. In the study the relative share of labour and agricultural implements showed an increasing trend with the decrease in farm size while that of planting materials (both tea seedlings and shade tree seedlings), manures and chemicals fertilizers and plant protection chemicals maintained an increasing trend with the increase in farm size. The cost incurred in small tea cultivation after the gestation period of planting upto the end of its economic life of 40 years is considered as operation and maintenance cost. The operation and maintenance cost is necessary for carrying out day to day operation of the small tea cultivation round the year. Labour, fertilizer, weedicide, plant protection chemical, fencing, drain repairing and agricultural implements are the major items constituting the operation and maintenance cost of small tea cultivation. These are the expenditures which are recurring in nature. Plucking of green leaf is a major operating cost. About 63 per cent of the total operating and maintenance cost is comprised
of labour cost and the proportional share of fertilizer (12.98 per cent), plant protection chemical (7.33 per cent), weedicide (3.89 per cent) and fencing (3.57 per cent) are relatively less.
Ganguli (2013) has also described the cost of production in terms of fixed costs and variable costs. Fixed costs are incurred only once during several years. Therefore only a percentage of the actual cost incurred on them is included in the cost of production of a particular year. It is observed from his study that the lowest percentage (0.12 per cent) of fixed cost is utilized in soil testing and highest percentage of fixed cost was incurred in land development (30.21 per cent).
Among the variable costs more than 50 per cent is spent on labour wages. It is found that the proportion of variable and annual share of fixed cost to the total cost works out to 88.07 and 11.93 per cent respectively. Even though there is a significant contribution of the family labour in the small tea cultivation, but in the cost of tea cultivation the imputed value of family labour has not been included in his study.
In the words of Saikia et al. (1994) the cost of production is mainly influenced by the non- geographical factors. During 1989-92 the cost of production of tea has increased by 50 per cent but there was insignificant increase in the selling prices of tea. There is a gulf of difference between the auction price and the consumer price of tea. The middlemen account for a substantial absorption of the difference in price between that paid by the ultimate consumers and that realized by the producers.
According to Goswami et al. (2006) among the variable costs, wages and salaries account for more than 55 percent of the total costs. With the increase in the rate of wages in large tea estates, the rate of wages of small tea cultivation is also increasing almost at the same rate each year.
However, the rate of wages paid to labourer is not uniform all over the State. It depends on demand and supply of labour and efficiency of labourer. In the study of five districts the rate of wages varied from Rs. 35 to Rs. 50 per day. The rate of increase of labour cost during last five years is around 30 percent, the study reported. Similarly, the prices of fertilizers, pesticides and other inputs like sprayer machines, baskets, small tools etc. increased fast. Higher transportation cost and temporary scarcity of fertilizers and pesticides lead to increase their prices. The increase in the cost of production is bound to occur due to inflationary trend of the economy. But reduction in price of the produce makes it difficult for small tea growers to meet the increasing cost of production. The labourers working in a small tea garden did not get the minimum wages
A demand for higher rate of wages is likely to create more problems for small tea growers in the days to come according to the authors.
Composition of Labour: Tea is a labour intensive enterprise. It requires labour at every stage of its work right from clearance of jungle, making the land suitable for plantation, work for the nursery giving manure both in the nursery and in the plantation area, spraying of pesticides, drain cutting, path making, plucking, manufacturing and then finally dispatching it to different destinations. Hence labour is the heart and soul of tea plantation. But unfortunately as far as living conditions of the tea labours are concerned, things are not ideal as it should be in our country and especially in Assam. As described by Saikia et al. (1994), the tea tribes of Assam are among the backward and most exploited tribes in India. Low wages, poor housing and lack of avenues for social mobility have been a recurring theme since the inception of the plantation complex in North East India in the early 19th century. With the establishment of tea gardens in Assam, the tea companies were in great need of a huge labour force for the growth of tea industries, which they could not manage locally. This necessitated importation of labour from different parts of India. To establish plantations in Colonial Assam, land and capital - the two factors of production also presented some difficulty, but the mobilization of labour for the growth and development of the tea plantations was the most crucial problem. Firstly, as Assam was thinly populated, a substantial landless agricultural labour class and a large labour market were absent. Secondly, comparatively high wages demanded by local labourers was a problem which led to the search for a source of labour outside the province from hundreds of miles away.
During the colonial period in respect of labour employment, Assam employed more than 52 per cent of the total labour employed in tea plantations of India. Thousands of labourers began to be imported from India’s remote tracts. In 1928-29, out of the total adult labourers, only 9 per cent were indigenous (local labour) people of Assam, the remaining 91 per cent being migrants. In the teething period of development of tea plantations, migrant labourers were recruited under the indenture system. The percentage of indentured labourers to the total adult labourers was 46 in 1884, but decreased to 37 per cent in 1897 and to 8 per cent in 1915-16, whereas the percentage of local labourers was increasing over the years. One of the most important features of tea plantations is that it requires a large number of female and child labour. In 1987, the percentage of female and child labour to the total labour force was about 43 and 9 per cent respectively. An
are prevalent in the tea gardens. In simple term ‘wage’ means a daily rate of pay fixed for a labour and a ‘salary’ means monthly rate of pay. Both the systems are prevalent in the tea estates, but the payment for the wages of the labourers is made on weekly basis instead of daily payment. The two systems are prevalent in the tea estates for wage payment to labourers, i.e., (1) time rate system and (2) piece rate system. The vast majority of the labour force in the tea gardens is employed on the piece rate system on the plucking system and time rate system on the rest of the year. Similar trend can even be seen in case of hired labour in small tea gardens.
Bhuyan et al. (2004) conducted a survey in the five major tea growing districts of Assam, viz., Tinsukia, Dibrugarh, Sibsagar, Jorhat and Golaghat which constitute 89.44 per cent of the total number of small tea growers of the State. The distribution of small tea growers in these districts are given in the following table.
Table 2.16: District-wise Distribution of sample based on Registered STGs with Small Tea Growers’ Advisory Programme, 2000
Sl. No. District Total STGs Sample Size
1 Tinsukia 1118 (13.91) 56
2 Dibrugarh 2663 (33.13) 133
3 Sibsagar 1192 (14.83) 60
4 Jorhat 1271 (15.81) 64
5 Golaghat 945 (11.76) 47
Total 7189 (89.44) 360
State Total 8038 (100.00)
Source: Bhuyan et al. (2004)
They observed that the composition of labour force on any individual farm varies according to the type, size and location of the farm. The labour utilization in various size groups has been explained in terms of season wise utilization, per ha utilization and per farm utilization.
Utilization of labour, in terms of family labour and hired labour (regular and casual) has been worked out separately. According to the survey 32.15 per cent of the total labour force is comprised of family labour, of which 78.27 per cent was male family labour and 21.73 per cent was female family labour. On the other hand, only 15.14 per cent of the total labour force was regular hired labour, of which 44.03 per cent were male and 55.97 per cent were female labour.
52.71 per cent of the labour force was casual hired labour, of which 44.73 per cent were male and 55.27 per cent were female. Like many others they mentioned that as the size of small tea farms increases, the contribution of family labour declines. They found there is no contribution of female family labour in the larger farms.
The operation-wise composition of labour utilization shows that 61.65 per cent of the labour is utilized in plucking, 17.33 per cent in weed control, 8.41 per cent in pruning, 2.75 per cent in plant protection, 2.68 per cent in manuing, 2.38 per cent in drainage, 2.25 per cent in fencing work, 2.08 per cent in shade maintenance and 0.47 per cent in other works. The utilization of female pluckers increases with increase in farm size (Bhuyan et al., 2004).
Kadavil (2008) also noted that the majority of the workers in tea gardens in Assam are from tribal communities and other marginalized communities.
Infrastructure: The cultivation and management of tea is considered to be one of the most organized agricultural sectors. The tea plantation industry of North East India has developed over a century and a half to become one of the most organized business sectors of the region.
According to Bordoloi et al. (2012) the infrastructure needed for starting a small tea growing enterprise already existed in upper Assam owing to the fact that the tea industry in this region is now over 150 years old. The small tea growers thus only had to grow tea and the post-harvest movement of the produce (green leaf) followed in a relatively smooth organized manner. The management of commercial tea estates has since the early fifties of the last century, procured inputs from various input dealers scattered in the urban and sub-urban areas of upper Assam.
Timely availability of inputs plays a vital role in any kind of agricultural production. Inputs for tea cultivation area are readily available in most tea farmer’s localities. For the success of any commercial crop, plant protection is one of the most important aspects. Up till now tea has mostly been grown by the farmers as a monoculture as a result of which a number of insect, pests and disease affect the crop. However, owing to the presence of agro-chemical retail outlets in the proximity of these tea farmers, most of the pesticides and implements required for management of these pests are readily available. The availability of technical know-how and timely availability of plant protection agrochemicals helps in easy detection of pests and their management.
The Small Tea Growers Advisory Programme in the Assam Agricultural University, funded by the Tea Board, impart training and provide technical inputs free of cost (Karmakar and Banerjee, 2005). The Tea Board has recently sanctioned another Small Tea Advisory Cell at Tocklai Experimental Station for the benefit of small tea growers. Further, small tea growers have
Goswami et al. (2006) observed that majority of the small tea gardens are located in remote villages and the condition of the roads leading to rural areas is very bad and the situation becomes grave during the days of heavy shower and flood. If the green leaf carrying vehicle (truck) of the trader (middleman/agent) fails to come for any reason, the small tea growers are sure to suffer losses. Because, from a remote place with poor road conditions is not possible to make an alternative arrangement to deliver green leaves to the factory. Moreover, many small tea growers do not know where their green leaves are delivered by the agents for processing.
According to Ganguli (2013) the infrastructural facilities, like cooperative factories, strong Government supported marketing system, tea nurseries, training institutions, very powerful tea growers’ lobby operating in South India and more importantly, the positive attitude of the Central and State Governments has clearly put these growers in a more advantageous position than the small tea growers of Assam. As the small tea holdings of Assam are located in remote areas, mostly they face extremely poor road conditions. For a major part of the season, the roads remain incommunicable.
Marketing Green Tea Leaves: As the small tea growers are the mere sellers of green leaves, they sell their produce to the buyers i.e. intermediaries such as agents, bought leaf factories and factory owning large gardens at low prices (Ganguli, 2013).
Bhuyan el al. (2004) mentioned that the marketing channels of the small tea growers are – (i) directly to factory, (ii) through commission agents to factory and (iii) through sub agents to commission agents to factory. From their study it is clear that a major portion (48.89 per cent) of the green leaves are marketed through the commission agents to factory. Only 18.89 per cent of the small tea growers transacted their green leaves directly to the factory.
According to Goswami et al. (2006) agents exploit the small growers by not paying proper price for their produce by citing low quality of tea leaves due to loss of moisture in summer season and extra rain water during rainy season. As a step to solve this problem of marketing some small tea growers have made an effort to eliminate the agents by forming Self Help Groups who deliver their produce directly to the manufacturers by arranging transport vehicles. But because of location of gardens at remote places and lack of unity among the growers, the growth of
SHGs was found to be very slow. The role of traders and agents is still the most prominent in this regard.
Borah (2016) found that all the small tea growers sell their green leaf either to nearby big gardens or to bought leaf factories. They face problems in selling green leaf at reasonable price.
The factory owners buy on ‘first come first served’ basis or at competitive price and growers had to be at the receiving end. The reasons identified are lack of tea processing factory, competition from other big gardens/growers selling green leaf through agents, poor support from Government etc. As far the Government support in marketing is concerned small tea growers have not received any marketing support from the Government.
Price: Price received by any sector for their product is definitely one of the factors governing the profitability and survival of that sector. In case of price of green leaves it is generally fixed by the BLFs and factory owning large gardens taking the demand factor into consideration. Agents too play an important role in fixing the price of green leaves.
Goswami et al. (2006) reported that since the year 1999, the small tea growers of Assam are suffering from fall in price of green leaf. The profitability of small tea growers of Assam is much reduced due to fall in price during these years.
The average price realized by small tea growers in different years are shown in Table 2.17. From the schedule it cannot be clearly commented about the trend of price over the years. The price of green leaf is going up and down in different districts of Assam over the period.
Table 2.17: Average Green Leaf Price in Different Districts of Assam (in Rs./Kg)
District 1996 1997 1998 1999 2000 2001 2002 2003 C.V.
Tinsukia 6.5 7.2 10.15 10.75 8.0 6.8 6.7 6.7 0.1999
Dibrugarh 7.0 7.25 10.25 11.5 7.1 6.9 6.9 6.7 0.2021
Sibsagar 7.0 7.25 10.5 11.0 7.25 7.0 7.0 7.1 0.1982
Jorhat 6.5 7.15 10.7 12.0 8.0 7.75 7.5 7.35 0.2150
Golaghat 7.0 7.65 11.4 12.0 8.25 8.10 8.00 7.75 0.1937
Nagaon 7.1 7.85 10.5 11.5 10.1 9.5 9.1 9.3 0.1407
Lakhimpur 7.15 8.0 11.5 12.1 10.5 10.0 9.5 9.35 0.1589
State Average 6.79 7.5 10.71 11.61 8.46 8.1 7.81 7.75 0.1823
Source: Small Tea Growers’ Advisory Programme, AAU
The coefficient of variation (CV) in Table 2.17 is calculated to check the oscillation in the
the coefficient of variation, higher is the fluctuation and vice versa. From our estimates a comparative low level of variation can be noticed in case of Nagaon district, whereas Jorhat district shows a comparative high degree of variation in the prices of tea leaves over the years.
In the study of Goswami et al. (2006) it was found that the un-remunerative price of green leaf was a problem faced by almost all the growers. Green leaf price received by small tea growers is only slightly higher than cost of production of green leaf. According to the authors this slender margin of profit is not enough for the growth of the small tea cultivation. On the basis of the pilot study in the Tinsukia district they commented on the changing pattern of the average price of green leaves and the wage rate of tea workers working in small tea plantations from 1978 to 2004. From Table 2.18 it is revealed that in Tinsukia district the price of green leaf was steadily increasing from 1978 to 1999 and from 2000 onwards, the price was falling steadily till 2003. A comparison of green leaf price and wage rate of the years 1999 and 2003 shows that average wage rate is increased by 27.6 percent and on the contrary, green leaf price is decreased by 33.25 percent. This is one great source of decline of profits of small tea growers.
An index in column 4 of Table 2.18 is calculated by dividing average price of green leaves by wage rate of labourers. The index is prepared to understand how much in a relative sense the small tea growers are getting affected when the input cost (wage rate of the labours) is changed in terms of output price (average price of green tea leaves). A decreasing trend of the index indicates the increasing cost of cultivation in comparison to revenue received. Even though the index is erratic in nature, but it shows a severe fall after 1998 which indicates that the small tea growers are adversely affected by the unremunerative price received by them.