How the Global Pandemic affected the Indian Tea Industry

How the Global Pandemic affected the Indian Tea Industry

koli majumdar

The global pandemic has adversely affected numerous industries and sectors and all countries all over the world have faced economic issues which have arisen due to the COVID control measures which were enforced in forms of nationwide lockdowns and closing of workspaces. The need to control the spread of the virus required the slowing down of economic activity and the ones worst affected were those which require human interaction and manual labor. The tea industry stands to be one such industry because the processes such as plucking are done by hand by the large number of tea plantation workers all over the world. In this article we will explore how the Indian tea industry dealt with the perils of a nationwide lockdown, how it was affected and how it continues to cope in a shackled economy with another lockdown looming over its head.

 

The Indian Tea Industry

The Indian tea industry is one of the most famous and the second largest tea industry in the world after China. It exports large quantities and varieties of tea along with consuming large quantities as well. India is known for some of the best and standout indigenous flavors of tea which include Darjeeling tea, Assam tea and so on. It uses almost 30% of the entire tea production in the world and thus, accounts for nearly a fifth of global consumption in 2016. The majority of all tea production comes from the country's north-eastern region, with Assam and West Bengal being the leading producers. The state of Assam is the single largest tea-growing region in the world. Tamil Nadu was the highest producer of tea among the southern states of the country, most of which is grown in the hills of the Nigiri's district in the southern Western Ghats. Munnar and Wayanad in the south were the other tea-growing districts.

 

Effects of the pandemic

The Indian tea industry was heavily affected mainly because the lockdown imposed all across the nation happened on 25th March 2020 which was during the first plucking season and while in many plantations plucking continued, in many of them, operations were stopped or shut down. The various restrictions and rules surrounding working during the pandemic negatively affected production and export to such an extent that as an urgent and immediate solution to keeping up with the demands of the global market, the Indian Tea Association wrote to the state government of Assam on April 4, stating their wish for the “resumption of normal operations in tea gardens while adhering to the prescribed safety and social distancing guidelines.”
On the basis of such requests, work resumed in some plantations with permission from state administrations as early as the 10th of April and, in the latest lockdown phase, “tea industries and workers engaged are allowed to operate at all times.”

Similar requests were made all over the country where the tea industry pushed for the relaxation of pandemic restrictions so that work could continue in the plantations. There are three main aspects trough which we can truly understand the impact of the pandemic on the industry and if there is any silver lining. The aspects are namely, exports, consumption within the country and the impact on the plantation workers. They are discussed below.

 

1. Export

There has been a considerable decrease in the export of tea from India and the main reason behind it, according to experts, is the lockdown itself. The imposition and following of pandemic restrictions led to the skiffing of overgrown leaves which then resulted in an average year-on-year crop loss of 10% which in turn affected good quality tea around 28%.
India produced 1,256 mkg tea in the year 2020,which is a 9.7% (135mkg) fall from its 2019 output, during which the country exported 262 mkg tea overseas.

Tea production in Assam declined by 32 million kg in the month of May due to the lockdown which then resulted in a financial loss of over Rs 77.48 million USD according to State Industries Minister Chandra Mohan Patowary. The tea sector is the "biggest industry" in the state and production was severely hit as the lockdown because it coincided with the beginning of a new plucking season. Total tea production in 2019 was 715.49 million kg in Assam which was 51.51 per cent of the total crop output in the country. However, due to the lockdown, decline in production was estimated at 32 million kg in 2020, amounting to a loss of more than Rs 77.48 million USD.

Due to the massive losses being incurred, the Centre issued guidelines for the resumption of economic activity in all tea plantations all over the country during the third phase of the lockdown, all the 783 big estates and 1.18 lakh small gardens were reopened. The state governments also had the responsibility to ensure that all 16,720 workers and employees of ATCL get full wages and salaries during the lockdown period

This situation was mirrored in Darjeeling and South India as well. In Darjeeling, the coveted first flush leaves which account for 20% of the entire production was all almost lost due to the lockdown during the first plucking season. Based on information from ITA member gardens, it is estimated that in Assam and West Bengal, the total loss in production for the months of March, April and May was around 140 million kg. This resulted in a loss in revenue of more than Rs 2,100 crore based on last year’s north India auction prices.

 

2. Consumption within the country

As discussed before, the pandemic induced restrictions on garden activities in the initial periods of the lockdown to contain the pandemic impacted tea production in Northern India during March, April and May. After these months, inclement weather conditions and flooding in Assam resulted in a crop loss in June and July 2020. Some impact of the adverse weather conditions on production is estimated to have been felt in August 2020 as well. Domestic production in the 2020 cycle is expected to be lower by 12% on a year-on-year (basis) according to the Vice-President and Sector Head (Corporate Sector Ratings) Kaushik Dassaid. He also said that the production may fall 13 per cent in northern India and only one per cent in southern India. Tea, being a fixed cost-intensive industry, expected a decline in the crop which led to a substantial increase in the cost of production within the range of Rs 25-30 per kg for the bulk tea industry in the northern region during 2020. While costs were estimated to increase in the range of 13-15%, domestic tea prices witnessed a sharp increase. The average auction rose by 58% in the northern region and 25 per cent in the southern region on a year-on-year basis during the months of April to August, which was driven by a supply-demand mismatch. While there were initial concerns that the lockdown would have an adverse impact on the overall consumption levels within the country, statistics indicate that an increase in 'at-home consumption' has very well offset the decline in 'out-of-home consumption'.

 

3. Workers 

Something to take into consideration is the condition of the tea plantation workers. The tea industry employs a large number of people, amounting to around around 1.2 million permanent workers. The lockdown made matters worse especially for the temporary workers, who comprise almost 50% of the workforce. While the permanent workers continue with work, the temporary workers faced uncertainty about being called in for work. For the regular permanent workers, there have been reports of irregular payments and unjustified deductions. In some plantations, payments were made for only three days of work despite the fact that workers worked for six days a week. This continued even after three months of lockdown, post restrictions being relaxed and lifted, clearly straining their available resources and pushing the workers further into poverty. Physical distancing is currently being followed in the plantations during plucking however, it is absolutely impossible to follow it in the labor lines or within their homes which more often than not accommodate more than six people in very small spaces. The risk of the virus spreading in these areas is rather high.
Hence, for the tea garden workers, getting back to work despite the risk of exposure to the virus is not so much about supporting the industry as it is about desperation and compulsion to work and sustain a living.

Overview

Thus, the Indian tea industry underwent a variety of challenges due to the COVID 19 pandemic but also managed to get back on its feet and fairly cope up with the demands of the Indian population and the rest of the world. Losses were obviously incurred, as has been incurred in various different sectors due to the unprecedented world health crisis. There are certain ways for the plantations to functions to their full capacity even in a scenario where the second wave of the virus is expected and predicted by professionals.


The way forward

The tea industry’s survival is very much intertwined with the interests of workers. In fact, because of the generational poverty and poor living and working conditions of the plantation workers, losses faced by the industry become matters of basic survival for them. The more the disease spreads, the longer and stricter the restriction on work becomes, the more the economy suffers.
According to IMF’s chief economist, Gita Gopinath, “It is not economists and market experts but health experts who will be able to tell when the economy can recover. Hence, returning to “normal” cannot be the way forward in the context of tea plantation workers. Their “normal” has led to them having pre-existing health and environmental conditions that make them highly vulnerable to the COVID-19. While starvation, illness and acute poverty continue to plague the lives of workers, COVID-19 will be the least of their worries.
The pandemic thus remains a health hazard to the workers and there requires to be strict following of social distancing and other sanitation norms along with the isolation of the plantations, closed off from outside visits with the rising number of cases in the country so that the plantations remain a safe place to work from.

 

Comment below if your tea consumption increased during the pandemic!

 

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