CONCLUSIONS AND POLICY IMPLICATIONS
6.5 Policy Implications
Policy implications can be derived from our conclusion stated above. Implementation of these measures is expected to increase the production of green tea leaves of small tea growers and
1. In our study land, fertilizer and capital cost are found to be positively significant for production of tea leaves. Perhaps the growers are not using land to the optimal amount, which gives this result. Policy should be formulated by the Government for the provision of greater accessibility of land to farmers. Fallow land with the Government can be made available on easier terms to the less affluent growers. There is a sizable amount of “barren and unusable land”
with the Government, which can be reclaimed. Fertilizer has a positive impact on the production of tea leaves, even though the impact is not very high. As fertilizers cannot be afforded by the tea growers, they may be using it sub-optimally. Subsidy should be provided to correct this.
Several Government policies exist regarding price subsidization of fertilizers. But either the policies are not applicable for the small tea growers or they are not effective. Existing policies should be revised or made effective for the benefits of the small tea growers. Capital cost per year also has a significant impact on the production of tea leaves in some cases. Various agricultural equipments are available on subsidy under various Government schemes like Central Sector Plan Scheme, etc., but during the field survey it was noticed that the small tea growers are not aware of them. Secondly, they prefer to purchase the agricultural machineries and tools through agents - which might be another source of exploitation. Efforts should be taken by the Government to make the small tea growers aware of the available benefits, and help the purchase of machines at a subsidized rate.
2. Technical inefficiency is found to be present in our study, and it most likely comes from lack of tranining and experience among other things. Suitable extension services, which train the farmers of the right farming practices, need to be taken up to educate the small tea growers about the rational use of inputs and farm management. The Government should design appropriate public policy for the small tea growers that would enhance their skills and bargaining power.
Capacity building for the smallholders must not only include technical advice but also training on small enterprise management, finance and the wherewithal for them to set up self-help groups (SHGs) and other producers’ organizations. SHGs are playing a significant role in Nilgiris by forming groups of STGs which arrange technical training for them. Focus was on improvement in field and changing the growers’ plucking practices. Looking into the technical problems of the small tea growers, the Tea Board of India, Tea Research Authority and corporate tea producers should take the responsibility to train different aspect of tea cultivation to the small tea growers.
This will improve the technical knowhow of the cultivators.
3. This is regarding the quality of leaves and better price realization and training. Tagat and Tagat (2017) mentioned that in 2002 the Farmer Producer Organization (FPO) was set up under NABARD in the context of prevalence of smallholders in agricultural sector in India. One of the initial objectives of FPO was to organize farmers for distribution of agricultural inputs like fertilizers, seeds and pesticides and later explore aggregation and grading of the produce. The role of FPO was extended to cater the needs of credit, market access, technology adoption, handholding support for enhancing productivity, etc., of the fragmented and sub-divided farmers. It has been argued that by organizing themselves into producer companies, small and marginal farmers stand to reap the benefits of economies of scale as well as collective bargaining. Thus by forming the FPOs in small tea gardens NABARD can extend its role for the benefits of the small tea growers. FPO can also participate in value-adding processes such as grading, processing and packing. Accordingly they can negotiate better prices because of an improved bargaining position.
4. Price Stabilization Fund Scheme was introduced in 2003 by the Ministry of Commerce and Industry with a view to protect the farmers of plantation crops including tea from losses on account of price fluctuations. The scheme was formulated for the benefits of small farmers to obtain some compensation as and when price falls below a certain level. The scheme should be properly implemented with quarterly revisions as per price fluctuation in the market and timely release of money to the small tea growers should also be ensured. During the survey it is noticed that the small tea growers are not aware of it. There should be wide publicity to these schemes.
5. Very few farmers in our survey were taking production loans from the formal sector institutions, which could be reason for suboptimal use of capital found in our tests. This is despite the Priority Sector Lending (PSL) policy of the Reserve Bank of India. This policy directs banks to provide a specified portion of loans to few specific sectors like agriculture and allied activities, micro and small enterprises, etc. The Commercial Banks of the State must expand lending operations under PSL by extending their loans to small tea gardens. A thorough and systematic planning should be devised for sanction of loans under this scheme.
6. In our survey differences in the wages between genders, as well as prevalence of low wages were found. Male labours receive wages in between Rs. 90 to Rs. 250 per day whereas the female labours receive Rs. 90 to Rs. 160 per day. In other words, on an average the male labours receive Rs. 170/day and female labours receive Rs. 125/day, which are in any case much lower
Commissioner, the latest minimum wage for the unskilled labour which was forwarded on 4th January, 2016 is Rs. 250/day or Rs. 7500/month irrespective of the sex of the labour (Government of Assam, 2016). But to get rid of exploitation, the policy should be strictly followed and the proper monitoring by the Government authority should be done on regular basis.
7. Exploitation of small growers is noticed in our study. It was found that farmers who have a single sales option are exploited more than those with multiple sales options. This implies that due to lack of avenues to sell the produce the farmers are forced to accept lower price. One possible way to tackle this exploitation to form farmers’ cooperatives in order to get the benefit of collective bargaining of farmers. The Government should take steps by guiding the growers and encouraging them to form co-operatives. This may help in not only to overcome the exploitation by monopsonistic buyers, but also to avail the benefits of Government schemes and programmes. The co-operatives should be encouraged to take entrepreneurial ventures, and for owning and operating bought leaf factories of their own as is common in the Southern India.
8. Wide-spread non-registration of growers with the TBI was noticed. We also found that non-TBI farms are more inefficient. Registration of small tea growers is essential for identification of actual number of small tea growers for compiling area, production and other data, and for devising programmes to benefit them. The TBI should take extensive registration programme to register all the small tea growers of Assam. It was found that many growers were not registered and therefore not eligible for the benefits provided by the Tea Board and the Government. There were complaints of bribes related to registration renewal and of non- existence of benefits from the growers. Such factors may have discouraged registration and its renewal. They should be addressed.
9. Tea cropping in Assam is seasonal in nature; the peak cropping months are July, August, September and October. Every year during these months the green leaf price goes down severely because of oversupply. In the State budget 2015-16 it was announced that during peak harvesting season, STGs can store green leaves in cold storage units. Even factories can store them in cold storage if they receive leaves beyond the factory capacity. For the proper application of such strategies Government should focus on green-leaf cold storages in the vicinity of the small tea gardens. The fact that older district farmers face less exploitation is probably because the supporting infrastructure is more developed in those districts. Priority
roads, electricity is an important and related issue. Poor road conditions often mean that the STGs receive low prices.
10. In most districts plucking standards are found to be arbitrary, the general practice of one bud with two leaves was very rare. Tea leaves are plucked in the morning, and it is collected by the agents by the evening which deteriorates the quality of the tea leaves, as a result of which small tea growers received non-remunerative price for green leaf. An effective monitoring unit should be established to ensure that the quality of green leaf plucked is fine and uniform. This may lead to protest from the growers immediately. But it would benefit them in the long run in terms of building a reputation and getting remunerative prices.
11. Historically, at the time when the Tea Board was set up in 1954, small tea growers were non-existent. Tea Board does not have an institutional set up to cater the needs of the small tea growers. During the 12th Plan period Tea Board introduced Tea Directorate. A STG Directorate should have within its purview the functioning of small tea growers so that maximum number of small tea growers can avail the Tea Board benefits. Licenses of the BLFs should be issued by the STG Directorate conditional to implementation of the Price Sharing Formula (PSF). From our survey it is noticed that either the PSF is not followed. As the price received by the small tea growers is low, hence it can be inferred that the PSF is not effective on the ground. Hence (a) implementation of the formula should be emphasized and made effective, (b) the formula should be closely examined, and revised if necessary. It should be followed up by the STG Directorate whose aim should be to gurantee a fair price to growers.
6.6 Conclusions
The introduction of small scale tea cultivation had a positive impact on the rural economy of Assam. It has brought changes in the socio-economic scenario of rural Assam, particularly in the occupational pattern. Apart from self employment, the small tea cultivation has opened wide vistas of business opportunities, which provided employment with steady income to many stakeholders. Many farmers reorganised their highland crops fields for small tea cultivation.
Thousands of hectares of sugarcane fields, pineapple gardens, homestead gardens and bamboo forests made way for small tea cultivation. Mostly educated unemployed youths came forward for small tea cultivation without any direct help from Government. From our findings it may be concluded that there exists scope for increasing the productivity and income of the small tea
commercial capacity, low levels of technical knowledge and limited access to resources are serious impediments. Many growers live in dismal economic conditions in remote areas of the border regions. Failure to get a fair price has a significant impact on their sustainability. Lack of infrastructure, exploitation by buyers, lack of awareness, varying quality standard of the product, etc. are some of the challenges the small tea growers face. From our study we find there is scope for overcoming at least some of these hurdles if proper policy is formulated and implemented.
We found that the production by small tea growers critically depends on a number of factors like, use of the available land, fertilizers, etc. Exploitation of the growers has been noticed. It is observed that the small tea growers are technically inefficient. Some policies have been suggested so that the productivity of the growers can be increased.
It goes without saying that in every business the future prospects are judged by the rate of returns. The high rate of returns in the business of small tea cultivation till recently attracted a number of growers. Interestingly, this is not the only attraction. Our questionnaire elicited information regarding the satisfaction from the small tea cultivation. Out of 210 sample small tea growers 182 (86.67%) have reported their satisfaction from the small tea cultivation. They ranked small tea cultivation over other cultivation not only due to the profitability of the business but also to the prestige associated with tea cultivation. Besides, other practical considerations such as the fact that tea bushes once planted would yield returns for the entire life time of the growers, that tea cultivation is less strenuous and demanding than any other cultivation played a part. Even though at present the small tea growers of Assam are producing a considerable amount of green tea leaves, they have been struggling on many fronts as described above. One only hopes that the policy prescription mentioned here would be taken into account by the concerned authorities. That would assist in the economic upliftment of small tea growers and other stakeholders associated with the sector.