Assam Tea Industry facing a huge loss around Rs 1,200 Cr amid Lockdown; Looking forwards Govt help


Guwahati, May 3, 2020:

Amid burgeoning prices of fertilizers (which are now being sold in black markets), the tea cultivators in Assam have sought Government support to revive the tea industry and run the small-scale tea gardens smoothly post lockdown.

Due to the nationwide lockdown since March end, the tea growers who were largely dependent on the tea factories for the sale of the raw leaves, were subjected to huge losses.

“The leaves lost their quality with time. They could not be sent to the factories at the right time. Therefore, we just had to throw away the leaves. As the lockdown has been relaxed, we will have to resume work and to do that we will need fertilizers and other medicines for the leaves. This is where the real problem lies. Fertilizers are not readily available in the market and the prices vary in the higher ranges. Urea, which costs Rs 266, we are now buying it at Rs 500. MOP, another necessity for cultivators is now being sold at Rs 1200, while SSP is being sold at Rs. 600,” said Mridul Buragohain, a tea grower from Demow in Upper Assam, sharing his concerns

About 17 percent people are engaged in the tea production sector, which contributes a sizable amount to the economy.

A tea garden in Golaghat, Assam

Yet, they are the ones who face extreme hardships. While talking with Inside Northeast, a local tea grower revealed that the cultivators are losing about Rs. 6000-7000 per bigha and they have not yet received good values in return for their produce.

In Assam, there are more than a lakh tea cultivators. Their families are also associated. About 40-50% tea is produced by these cultivators. “But the amount that they should be getting in return of the raw leaves, is missing. They are underpaid. This is because they don’t have factories. We are compelled to give the leaves to the tea companies. We haven’t yet seen them paying what we deserve. Tea Board has fixed an amount but the ones who have factories, they don’t pay the cultivators,” added Buragohain.

“We request the Agriculture Minister to look into the market prices. We also appeal Chief Minister Sarbananda Sonowal to control the market. It is currently out of control”, said Biman Saikia, another cultivator who grows tea in Jorhat district.

The local tea cultivators are facing extreme hardships. They are the ones impacted due to this lockdown. The losses are in quintals and this is not only in Titabor. Life has become difficult. The fixed price system has not been implemented. “They talk about quality leaves but there are so many problems that need to be addressed. The Govt should compensate for the losses. If they do this, then the economic contribution that the tea cultivators are providing will run smoothly”, said a grower.

“The Govt has not extended any support till now. It has a fund for the cultivators. The cess is deposited with the Govt. The Industry and Commerce is dealing with it. In our knowledge there is at least 1.5 crore rupees with the Govt. This should be distributed among the ones who are enrolled with the Tea Board”, he added.

Losses from the Lockdown:

Talking to Inside Northeast, the Northeast Tea Association (NETA) adviser Bidyananda Borkakoty has said that the industry is hanging by the thread amid a lack of fertilizers as the cultivators are gearing up for a first application. “The cost of fertilizers is increasing and the second thing is that, is it unavailable. If we can’t apply fertilizers, then Assam will be doomed. The Government should make it available at reasonable price. The cost of fertilizers in the black market is too high and is actually 30% above the actual rate.”

The NETA adviser also added that the nationwide lockdown has been absolutely catastrophic for the industry. “We are staring at gargantuan losses here to the tune of Rs 1,200 cr. If the industry continues to suffer, it will be very difficult for the Government of Assam as well as for the economy”, he added.

According to the NETA, Assam’s annual production in 2019 (Jan to Dec) was 715.79 million kgs. As per the Tea Board of India statistics, the tea production of Assam in March and April were 33 million kgs and 45 million kgs respectively in 2019. This year our production upto April would be about 21 million kgs only i.e. only 27% of last year’s production. Therefore, the total crop loss upto April is about 57 million kgs.

The body has listed several reasons why this has come to be. Firstly, the lockdown from 22nd March to 14th April. Secondly, 50% of the area had to be skiffed. Lack of workers in many small plantations because of the lockdown has been cited as another possible reason; lack of rainfall has further added to the woes of the farmers.

The estimated crop loss for May would be about 23 million kgs.

Therefore, the total estimated crop loss of Assam tea industry due to lockdown is about 80 million kgs. As per the Tea Board of India official figures, the annual average price of tea of North India (which includes Assam) at the Indian auctions in 2019 was Rs.152.26 per kg. Therefore, the total loss of revenue in Assam would amount to Rupees 1218 crore.

What You should know about the thriving Tea Industry in Assam:

  • India’s tea production annually is 125 million
  • Assam produces 600-700 kilos of tea
  • It produces 12% of India’s total tea
  • Assam exports tea to US, Brazil, France, Spain, etc.
  • The tea industry in Assam has a history of 172 years
  • Robert Bruce first began the tea production in Assam
  • Tea production here is spread across 117 hectares
  • Assam, in total, has 2,500 tea gardens
  • Every year Assam exports about 680 kgs of tea