This is to prove that the thesis entitled "The Small Tea Growers of Assam: A Study of their Monopsonistic Exploitation and Production", presented by Mrs. The main purpose of this thesis is to investigate the production conditions in small tea gardens and the possible possibilities. exploitation of small tea growers by tea leaf buyers in Assam.
LIST OF ABBREVIATIONS
LIST OF TABLES
125 4.3 Summary statistics of survey data (Price variables, all data refer to 2016, unless otherwise specified).
INTRODUCTION
Tea in Modern Assam
Therefore, in the early years, tea cultivation in Assam was exclusively in the hands of the government. Originally in Assam, tea was grown by large British companies, now a significant area of tea land is in the hands of the small tea growers.
Definitions
According to Rasaily (2015), BLFs are an important segment in the value chain of small tea growers. In the new scenario, small tea growers play a significant role in the tea sector.
Different Aspects of Small Tea Growers in Assam
Hannan (2013) noted that in most cases the small tea growers originated in the remote areas. The exploitation of the small tea farmers is also due to the lax governance of the Tea Board.
Finance: The next serious problem that the small tea growers are facing is related to finance. Due to lack of finance small tea growers cannot afford to extend the area under tea
Borah (2016) also found that most smallholder tea growers have not received financial assistance from the Tea Board and other financial institutions. Quality: Singh (2006) points out that shade given to the tea bushes is one of the important aspects that determine the quality of tea.
Productivity: Productivity variation has a significant impact on the production of tea
- GAPS IN THE EXISTING RESEARCH
- DATA SOURCE
- RESEARCH METHODOLOGY
But most of the small tea growers in Assam had started planting tea haphazardly. Another way of looking at the issue of exploitation of small tea growers is as follows. Thus, the small tea growers are powerless compared to the buyers of tea leaves.
In other words, in the second part we do not focus on the utilization of the small tea. What is the degree of exploitation of the small tea growers by buyers of tea leaves.
PRODUCTION CONDITIONS IN SMALL TEA GARDENS IN ASSAM
Production Conditions
Of the tea grown in India, the small tea growers of Assam accounted for the major share, both in terms of number of estates and production (Kadavil, 2008). During the last four decades, the number of small tea growers in the country has increased manifold, which was discussed in Chapter I Table: 1.5, and the share of cultivated area has also increased. The growth of small tea growers has led to major changes in the structure of Assam's economy.
Finally, the establishment of AASTGA, STAP and the assistance of the Tea Board has brought about changes in small tea cultivation (Ganguli, 2013). At first we make a state of production of tea leaves by small tea growers.
Small-scale Tea Productions as Informal Sector
This is most likely a consequence of the fact that small-scale activities predominate in the informal sector of less developed countries. No declaration needs to be submitted by small tea producers to any government department. Therefore, the production cost of green leaves produced by them is higher than that of the small tea producers.
It can be further concluded that the nature of small tea cultivation is the unorganized/informal sector. Since many of the characteristics of the informal sector are found in small-scale tea cultivation, the reasons for growth and the problems of small-scale tea cultivation are the same as those faced by the informal sector in general.
Growth of STGs in Assam
As can be seen from the table, the number of small tea growers is increasing significantly both at the national and state level. In the first phase (from inception to 2001), the growth rate was relatively higher than the growth rate in the later phase (from 2002 onwards). Along with the increase in the number of small tea estates, their area is increasing tremendously.
However, there is wide variation in the statistics on the total number of small tea growers and their area in Assam. With the increase in the number of small tea growers (registered + unregistered) and their area (registered + unregistered), the production of tea has increased significantly over the years.
Factors of Tea Cultivation in Small Gardens
But a reduction in the price of the products makes it difficult for small tea growers to cope with the rising production costs. The distribution of small tea growers in these districts is given in the following table. The Small Tea Growers Advisory Program in Assam Agricultural University, funded by the Tea Board, provides training and technical input at no cost (Karmakar and Banerjee, 2005).
The price of green leaves obtained from small tea growers is only slightly higher than the cost of producing green leaves. According to the authors, this small profit margin is not enough for the growth of small tea cultivation.
ESTIMATING EXPLOITATION AND PRODUCTION FUNCTION
THEORETICAL AND EMPIRICAL PRELIMINARIES
Market Structure of STGs
Accordingly, it can be assumed that the supply curve of small tea growers is upward sloping due to the positive relationship between the price of tea leaves and its supply. However, the price of green tea leaves (r) is an increasing function of the amount of tea leaves used. The monopsonist's profit can be expressed as a function of the amount of tea leaves he buys as follows.
But it is clear that Or' (or G*E') price of tea leaves is less than the marginal revenue of the product, which is equal to G*E. To assess the elasticity of supply, we need to consider the supply function of the small tea growers.
THE SURVEY
Report of the Pilot Survey
In terms of labour, growers generally rely on casual labor and payment is on a time-rate basis. Although growers are unable to provide precise information about fertilizers, insecticides, pesticides and herbicides, most growers use these chemicals in their gardens. In return, 50 percent of the growers sell their leaves to the freight factories.
80 percent of the producers sell their leaves on their own and they have their own transport facilities, while the remaining 20 percent depend on the leaf remedies as they do not have their own transport facilities. Most of the producers felt that if they sell through agents, it affects their profits adversely.
The Main Survey
After completing the questionnaire, we conducted the main survey among smallholder tea growers during the months of July-September 2017. First, the concentration of smallholder tea growers varies across districts, so not all districts may have the same number of respondents in the sample. Our research shows that 11.9% of small tea growers sell their tea leaves directly to the estate factories.
54.76% of the sample of small tea growers have registered their plantations with the Tea Board of India (TBI). Most of the sample growers (86.67%) mentioned that they prefer small tea cultivation compared to other occupations.
RESULTS AND DISCUSSIONS
Estimation of Price Elasticity of Supply
In the second phase, the model-estimated values from phase one are used instead of the actual values of the problematic predictors to estimate a linear regression model of the dependent variable. Since the calculated values are based on variables that are not correlated with the errors, the results of the two-stage model are optimal (Johnston and DiNardo, 1997). These four factors can affect the price of tea leaves that the tea growers get from different sources.
Secondly, as the distance from the grower to the processing unit increases, this can negatively affect the price. In conclusion, the strength of the instruments is determined with a fair degree of relative bias.
Heteroskedasticity and Re-estimation
Clearly, the null hypothesis of weak instruments is rejected at a higher level of relative bias, so we still find that the instruments are strong. We find it curious that the producers in the districts with high concentration of small tea gardens receive lower price compared to the producers of districts with less concentration of small tea gardens. We see from the table that the coefficient is positive (the numerical value is 5.31) and it is highly statistically significant with p˗value: 0.000.
That the variables are truly endogenous, that is, the price of Y is not exogenous. For this we test the null hypothesis that the instruments are weak.
Estimation of Monopsonistic Exploitation
It is noted that in the case of the first criterion, the utilization rate is more in the case of new districts where the concentration of STGs is less and it is less in the case of districts with high concentration of STGs. In the case of the second criterion, a relatively higher level of utilization can be observed for cultivators in Assamese communities than for non-Assamese cultivators. The literature tells us that STGs first took root among the unemployed youth of Assamese society.
Relatively higher utilization rate can be observed in the case of growers who sell their tea leaves directly to processing factories than growers who sell through other sources. As reported in Table 5.2, panel 1, the coefficient of the instrumental variable, option, is negative and insignificant.
Estimation of Production Function
The results of OLS estimation are presented in the appendix of the chapter (Appendix XI). The dummy for districts with a high concentration of STGs has a positive impact on the production of the farms at 5% level of significance. Similarly, the impact of the use of fertilizers is positive and statistically significant at 10% level of significance.
Thus in the case of stochastic production function it is also observed that land, fertilizer use, capital cost and dummy for districts with high concentration of STGs are statistically significant. The impact of the explanatory variables work, pesticides and language community dummy on production is insignificant.
Summary
This contradicts the results of Lama et al. 2016) where training appears to be positively related to technical efficiency of the growers. Of all explanatory variables, land, fertilizer, capital costs and dummy for districts with a high concentration of STGs turn out to be statistically significant. Finally, the dummy for districts with a high concentration of small tea growers appears to be statistically significant.
It is noticeable that between model 1 and model 2 there is only a minor change in the results of the coefficients of the explanatory variables or their significance levels. The cost of capital was also found to be significant in the case of Model 2 (it was not significant in the case of Model 1).
CONCLUSIONS AND POLICY IMPLICATIONS
- General Characteristics of the sample Small Tea Growers
- Estimation of Monopsonistic Exploitation
- Production Function Estimation
- Estimation of Technical Efficiency
- Policy Implications
Most of the sample small tea producers are found to be from the Hindu-Assamese community. It is observed that there is technical inefficiency in the production of tea leaves by the small tea producers. Existing policies should be revised or made effective for the benefits of the small tea producers.
So by forming the FPOs in small tea gardens, NABARD can expand its role to the benefit of the small tea growers. Tea Board has no institutional set-up to serve the needs of smallholder tea growers.
BIBLIOGRAPHY
Bhuyan, Diganta Kumar (1993) "A Study on Financing the Small Tea Growers in Golaghat District of Assam" En afhandling præsenteret for AAU (PhD). Borah, Kaberi og Das Dr. 2015) "Growth of Small Tea Cultivation and Economic Independence of the Indigenous People of Assam", International Journal of Research in Social Science and Humanities;. Goswami, Mukuta (2006) "Emerging Entrepreneurship in Tea Plantation: A Study of Small Tea Growers of Assam" (afhandling indsendt til Gauhati University, Guwahati).
Kakati, Niranjan (2011) "Problems of Small Tea Growers in Assam with Reference to Lakhimpur District", Indian Journal of Applied Research, Vol 1, Issue3. Kakati, Niranjan (2012) "Income of a Small Tea Growers of Assam- An Evaluation", Indian Journal of Research; Vol. 1, udgave 7.
