India has the second largest area under tea cultivation, at 4,39,000 hectares (ha), after China with around 11,34,600 ha. But this does not provide solace to tea industry insiders who know that India has registered one of the slowest growth rates in terms of expansion of area under tea cultivation.The area under tea has grown by just 6.8 per cent over the last 10 years, slowing down considerably from the 18 per cent growth in the period 1963 to 1983 (from 3.34 lakh ha to 3.96 lakh ha).
By comparison, the area under tea has grown by 32 per cent in Kenya and by over 15 per cent in Indonesia. Both these countries have made inroads into world markets over the recent years.
An industry watcher admits that "these comparisons could be unfair considering the fact that the Indian tea industry is years older than those in other countries." But that is precisely where the problem lies: almost 80 per cent of tea bushes in India are over 30 years old, and 45 per cent are over 50 years of age.
The Darjeelinggardens have been the most hard hit by stagnating production and a low productivity level. Here, the tea bushes are "senile" in industry parlance, which means over 80 to 100 years of age. In competing countries like Kenya and Sri Lanka, bushes have an average age of about 30 years.
Analysts say that government policies and industry conservatism are to blame for the crisis. The Indian industry's efforts at planned expansion have been severely limited by the Land Ceiling Act of 1956 under which the government requisitioned large tracts of uncultivated land from the tea estates.
The industry claims that the Assam government has acquired as much as 14,000 ha of land from tea estates under this legislation. And, although the state holds large tracts of surplus land, the Land Policy of 1979 does not allow these to be transferred to the corporate sector.
According to conservative estimates, the industry needs 50,000 to 75,000 ha for expansion over the next five years. "But that is being too optimistic," saysan industry source. Says a top producer: "The industry has tried to explain to government officials that transfer of land would not only increase the hectarage under tea cultivation, but also convert degraded land into reforested land".
Government officials have a different viewpoint: the tea companies should go in for vertical expansion on a larger scale, which would increase the yield per hectare. Vertical expansion means improvement of output by replanting, expansion and refilling rather than by horizontal expansion. The commerce ministry has set an annual replantation target of two per cent which it feels could do away with 40 per cent of the old bushes.
The Indian tea industry has a very low replantation rate of less than one per cent per annum. Keeping the ministry's viewpoint, the Tea Board subsidies for replantation purposes have undergone substantial increases. However, a government decision in 1984 to do away with the tax break that allowed tea companies to retain 20 per cent of their pre-taxprofits for developmental purposes has done damage.
While acknowledging the need for replacing old bushes, the producers have their own sets of grievances: a tea bush takes four years to be ready for plucking and seven years to mature. "Who will offset these losses over such a long period of time?" asks a major producer.
Vertical expansion in the form of uprooting and replanting can be very expensive-for example the cost of replanting in Darjeeling is almost Rs 1.5 lakh per hectare. Producers also find it difficult to time their replantation programmes.
In a good year, spending on replantation would affect the profitability, whereas in a bad year, replantation costs would prove to be an additional cost to the campany. Moreover, in North Bengal many gardens are yet to get their registration done as it is believed that many have not followed the ceiling amendment that limits the conversion of agricultural land into tea plantation to just seven hectares.
This would mean that these gardens are outside thepurview of the Tea Board and hence are not in a position to avail themselves of development and loan schemes of the Tea Board.
The increase in land productivity has been slow in the Indian tea industry. According to estimates, the average productivity for estates in Assam and West Bengal should be 2,881 kg/ha and 2,228 kg/ha respectively. This is way ahead of the actual productivity figure in the two states which stand at 1,696 and 1,522 kg per hectare.
Most growers feel that although the Tea Board's expenditure on research and development has increased over the years, it is still small at Rs 5 crore. Says a ministry official, "The tea industry has been quite conservative in expanding in non-traditional areas like Orissa, Arunachal Pradesh and Bihar where there are large tracts of unused, rather virgin lands available for tea cultivation purposes".
The lack of adequate development finance has been one of the main factors behind the industry's lack of interest in non-traditional areas.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
