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Small tea growers are letting tea plants grow into trees due to prices crashing
Small tea growers are letting tea plants grow into trees due to prices crashing|Photo credit: Jeff Joseph
Governance

Wayanad: Small Tea Producers In Need Of A Helping Hand

With the continuing slump, farmers with small land holdings growing tea are pondering whether to uproot the plants

Jeff Joseph

Jeff Joseph

“These are tea plants which have now become trees,” says 56 year old Krishnadas KC, a small tea grower, standing between what is an impenetrable wilderness on either side.

Overgrown tea plants have flowered and produced full grown fruits, a sight seen rarely otherwise
Overgrown tea plants have flowered and produced full grown fruits, a sight seen rarely otherwise
Photo credit: Jeff Joseph

“They haven’t been plucked for three years now,” says 62 year old Leela Pathrose whose land it is. She refused to be photographed.

“The rates we get are so low that it is not feasible for us to hire labour to pluck,” she says. “We used to bring labour from Tamil Nadu and in the evening transport them back. With the low rates, it is unfeasible to do it.”

Ambalavayal and the nearby Karadipara area of Wayanad is close to the states of Karantaka as well as Tamil Nadu with which the district shares a tri-state border.

“For us to now clear it all and make them ready for plucking or plant something else will be very expensive and will take time too,” she says.

“So they have allowed the tea plants to grow into trees,” says Krishnadas. Krishnadas, a former small time businessman and Karate teacher, turned into tea grower in 1995 seeing the high prices prevailing then.

“I got Rs 18 in 1997,” he says about the high prices which motivated many to take to tea.

Krishnadas KC, standing in the tea plantation which has grown into a wilderness
Krishnadas KC, standing in the tea plantation which has grown into a wilderness
Photo credit: Jeff Joseph

“There are many other farmers here who are facing a similar situation,” he says. “It was why we got hooked by the idea of starting a producer company.”

But the idea of a producer company which germinated in 2013, is yet to take off. Caught up in the entanglements of clearances it has not panned out as planned.

Farmer’s Collective To Producer Company

“It was the Tea Board which advised us to form Sangams (Farmer Collectives) because of the low rates we had to settle for when selling individually,” says 71 year old Gulf-returned Kunju Haneefa, a small tea grower of Karadippara who started growing tea in 1994. Back then tea growers had better prospects.

He is also the chairman of the Wayanad Green Tea Producer Company Limited and had previously run a shop in the nearby Ambalavayal town for a while after returning from 25 years as an expatriate.

“The Sangams would collectively supply the leaves to the factories and negotiate a better price taking away the middlemen,” he says. “But it couldn’t assure good returns throughout the year.”

Indian tea in spite of having better quality, faces competition from Sri Lanka and other countries affecting the prices here, says Kunju Haneefa
Indian tea in spite of having better quality, faces competition from Sri Lanka and other countries affecting the prices here, says Kunju Haneefa
Photo credit: Jeff Joseph

“There are two seasons for tea - lean season and growing season. During the lean season, the factories will take our produce and give us rates of Rs 12-15 per kg. But in the growing season, production from their own plantations will be enough to meet their demands and hence they will reject our produce citing one reason or the other.”

What had led many farmers to switch over from coffee which was grown traditionally, to tea was also the regular income it assured. Coffee fetched returns only once a year.

The uncertainties in the factories posed other problems for the tea growers.

“Tea leaf is a fast perishing product. It has to be processed within 6-8 hours of being plucked. Else they undergo fermentation and turn red,” says Haneefa.

“When these factories reject our produce, we have to travel down to Tamil Nadu to sell it to the factories on that side. There they would quote much lower rates. Given our plight, we can’t bargain either. We have sold leaves for as low as Rs 3 per kg. It is not even enough to cover the travel expenses, leave alone the labour charges. But that is what we would get. We reached a point where all growers were thinking of uprooting tea and planting something else.”

They searched for ways to stay afloat.

“It was then that the Tea Board proposed the idea of forming producer companies,” says Haneefa. This would allow them to process the leaves and sell it themselves, adding value to their produce and insulating them from the dependency on bigger factories.

Until then Tea Board gave licenses only to factories with investments of Rs 2-3 crore according to Jose Sebastian, the CEO of the producer company Haneefa is chairman of. The opening up of the opportunity for Medium, Small & Micro units was a breather for the farmers of Karadipara.

India’s First Tea Producer Company

“The Tea Board arranged a tour for us. We visited Assam to learn how tea was being processed in small scale units there,” recalls Haneefa. “Like backyard bakeries, with Rs 3 lakh, we could start processing leaves ourselves.

On the train back home we met an engineer who was doing the same with equipment he himself had built - a somewhat bigger unit at home at the cost of Rs 11 lakh. He invited us to his place and promised help with setting up a similar set up. It used wood and was still a small set up which could process only a fraction of our sangam’s produce.”

The Wayanad Green tea Producer Company was the first producer company in the tea sector
The Wayanad Green tea Producer Company was the first producer company in the tea sector
Photo credit: Jeff Joseph

The sangam had more than 200 members, all tea growers, with the biggest acreage being 5 acres and a total area of close to 400 acres. Their needs were higher as also the possibilities. They aimed bigger.

“We thought of setting up a producer company with a small factory which could also take leaves from other farmers, process, pack and sell them directly in the markets,” says Haneefa.

“We formed the company by pooling members from two separate sangams from the Karadipara, Vaduvelchal and Vattachola regions. Every member was given exactly one vote irrespective of the number of shares held,” says Jose Sebastian, CEO of the company.

But the best laid plans went awry.

From Green Tea To Organic Tea

“We needed a premium product to stand out and make a name. Being inexperienced, we couldn’t compete with the big players,” says Jose Sebastian, Chief Executive Officer of the Wayanad Green Tea Producer Company.

“So we decided to produce green tea, which was gaining popularity worldwide.”

The number of producers were less and hence competition lower.

“That is why our name itself has Green Tea in it.”

Green tea requires plucking at two leaves’ growth, by hand, every week. As opposed to traditional tea which is plucked after growth of 6-8 leaves (15-20 days) the costs involved in green tea is higher.

“Green tea has a higher production cost of around Rs 40 per kg. So farmers have to get at least that to be able to survive,” adds Jose.

Being a premium product, green tea promised better prices in the market and had export potential. It was this that the Wayanad Green Tea Company had hoped to cash in on.

“It took us forever to get the necessary licenses and permits. By the time we got our factory ready, bigger plantations had already started selling green tea at very cheap rates.”

The premium market they had hoped to cash in as an early entrant was lost.

Procedural delays in getting permits have seen us shift from green tea to organic green tea, says Jose Sebastian
Procedural delays in getting permits have seen us shift from green tea to organic green tea, says Jose Sebastian
Photo credit: Jeff Joseph

“They will buy the leaves from the farmers at cheap rates and sell them at a cheaper rate,” Jose says about how the bigger companies afford to sell cheaper green tea.

The reduced costs prevailing in the markets meant that the producer company could not compete in the open market with their green tea.

The search for a new product was begun and it ended with organic green tea. Another lengthy process awaited.

Of Permits And Licenses

“When we go to an office for a license, they will say we need that or this paper,” says Kunju Haneefa. It was he who ran behind the papers needed for the factory.

“They will never tell us what all other things are needed at one go. When we go back with the said paper that had been demanded, they will tell us to get something new,” he says recollecting the days he visited offices for getting permits and clearances for the factory.

“This went on for so long that inspite of starting out in 2013, it was only in 2017 that we could get the required license and make the factory ready for operation. Pollution, Fire, Health, packing licence, the list goes on. We have got 13 licenses as of now,” he says.

A list of licenses that have been got by the company
A list of licenses that have been got by the company
Photo credit: Jeff Joseph

“We have now applied for organic certification for the factory which we are hoping to get in 3-4 months’ time,” says Jose Sebastian.

There are 167 members in the producer company and only 19 have got organic certification for their farms, a precondition for organic tea which fetches higher rates in the market.

“It is a very lengthy process,” says Haneefa.

But that is not the only problem faced by the Wayanad Green Tea Producer Company. Finance was another cause of delay.

The Costs & The Payback Time

“The machinery alone cost Rs 30 lakh. Apart from that, other expenses had to be incurred and estimated total cost initially was Rs 72 lakh. No bank would extend us loans,” recalls Haneefa.

“NABARD promised us help, but it took a long time. NABARD took 3 years to study us before we were given funds. Today, what started as a plan of Rs 72 lakh has exceeded Rs 1.2 crore, yet, we are nowhere near making any money,” he says.

“In between, demonetisation and GST added to our cost escalation,” says Jose Sebastian.

“Today, we are required to pay back the loans we have availed, but with no income, we have an uphill task. We are paying it out of our own pockets for now,” says Kunju Haneefa.

The factory processes leaves two days a week
The factory processes leaves two days a week
Photo credit: Jeff Joseph

What has led to the present situation for the company is the government policies which requires multiple permits and licenses before starting out.

After chasing and eventually taming the wild goose of licenses required to operate the factory, the Producer Company is now in their attempt to gain organic certification. Similar certification for the farmers will take still more time.

Pakkunji And His Organic Farm

57 year old Pakkunji was one of the few to get his 1.5 acre farm organically certified, a process which involves considerable attention to detail.

“Registers have to be maintained, soil and produce tested and care given to not accidently drop anything on the land which could be a disqualifier,” says Pakkunji.

Pakkunji who has been a farmer since his youth had planted tea when others in the area turned to tea, in the 1990s. “Back then we could get Rs 15-18 easily,” he says.

“But now the rates are Rs 10-11 while the labour costs have increased substantially. I am coping as I have other crops to depend on as well,” he says.

“The entire land is organic. I don’t use inorganic fertilizers or pesticides for any of the crops here,” he says. “It takes four years to get certification. But my pepper doesn’t fetch a higher price in the market as there is no separate market for organic pepper yet.”

Pakkunji’s farm has organically certified tea growing amidst the arecanut on which grows green pepper
Pakkunji’s farm has organically certified tea growing amidst the arecanut on which grows green pepper
Photo credit: Jeff Joseph

In between, he has an occasional line of maize, ripe and ready to be plucked and guavas of differing size, shapes, colours and tastes interspersed with the coconut trees.

No space is left unused and brinjals and chilly grows amidst the tea as also the few lines of upland rice he has planted as an experiment as he explains it.

He gets paid Rs 40 per kg for the tea leaves he sends to the producer company which he too is an owner of.

He doesn’t use anything other than Jeevamrutham (liquid organic pesticide) made from cow dung, cow urine and other naturally available components.

For him to continue doing that profitably, and inspire others to do that, the Wayanad Green Tea Producer Company and its new organic green tea plans has to bear fruition.

But the company seems to be in trouble and has reduced the number of employees to keep up with the hard times.

The Sole Employee

42 year old Sheena Elias has been working with the factory since its inception.

“There were 6 workers earlier, 4 men and 2 women,” she says.

But now she is the sole worker. She is paid Rs 400 per day, which the owners are finding hard to meet.

“There was irregular work so they let them go. I have been working here since the beginning,” she says.

Sheena has a loan she has availed through Kudumbashree nearing due date which she has to repay much like many of the company’s owners themselves.

The CEO, the director and the chairman are all working without salary. In the set-up, she thus remains the highest paid. But the irony of her chasing the unpaid owners, for her own salary troubles her.

Sheena Elias, the sole employee of the company herself grows tea in her small parcel of land
Sheena Elias, the sole employee of the company herself grows tea in her small parcel of land
Photo credit: Jeff Joseph

She can find other work but the owners have nowhere to go. They have sunk all their time, money and sweat into this venture.

Government Support Is Needed

“The government support for the Tea Board has reduced considerably in this year’s Central budget,” says Jose Sebastian.

“Unless the government extends support to the small farmers and farmer owned producer companies like ours, we can’t survive,” he says. “Even big factories in the tea sector are facing closure. It could go back to the days when farmers uprooted tea plants.”

Many no longer care to do even that.

“All of our profits and losses get distributed amongst the farmers,” he says.

And any extended loss can make the company’s and its many owners’ future bleaker.

“We do have a sale enquiry from Germany for our organic green tea. But for that we first need to get the necessary certification,” says Haneefa.

This is the plight of almost all the 50 producer companies which were started in Wayanad according to those in the know.

The red tape and financial burden have been their undoing for long. A simplification of the process too can go a long way in helping them.

Will the central government care to throw a rope for these entrepreneurs to swim to safety remains a question.