Indian tea industry: A new management flavour, thanks to small growers

Owned and operated by farmers, the Grassroots Tea Corporation could transform the lives of over 2.5 lakh small tea growers in India.

FAIZAL KHAN OCTOBER 02, 2021 / 10:18 AM IST

https://www.moneycontrol.com/news/trends/features/indian-tea-industry-a-new-management-flavour-thanks-to-small-growers-7534081.html

Grassroots Tea Corporation will start retailing its tea brands online from October 8.

Sanjarang Basumatary owns two-and-a-half bighas (about one acre) in the Barengabari village of Udalguri district, Assam. His mother and wife help him grow tea plants on this land. Every year, he would take the green leaf plucked from his tiny farm on a bicycle to the tea company in the nearby town in the hope of fetching a good price.

"We always got very low prices for our green leaf. Sometimes the tea company wouldn't want any more leaves, forcing us to throw them away," says Basumatary's mother Panchami Boro. "Life was difficult," she adds.

Like Basumatary, many of Assam's small tea growers who depended on the market's demand-supply dynamics today no longer need to lean on big tea factories for selling their crop. A new tea corporation where small growers are stakeholders, from cultivating to manufacturing to marketing, is changing the way the tea industry works. ...more

Indian tea industry: A new management flavour, thanks to small growers

Owned and operated by farmers, the Grassroots Tea Corporation could transform the lives of over 2.5 lakh small tea growers in India.

Grassroots Tea Corporation will start retailing its tea brands online from October 8.

Grassroots Tea Corporation will start retailing its tea brands online from October 8.

Sanjarang Basumatary owns two-and-a-half bighas (about one acre) in the Barengabari village of Udalguri district, Assam. His mother and wife help him grow tea plants on this land. Every year, he would take the green leaf plucked from his tiny farm on a bicycle to the tea company in the nearby town in the hope of fetching a good price.

"We always got very low prices for our green leaf. Sometimes the tea company wouldn't want any more leaves, forcing us to throw them away," says Basumatary's mother Panchami Boro. "Life was difficult," she adds.

Like Basumatary, many of Assam's small tea growers who depended on the market's demand-supply dynamics today no longer need to lean on big tea factories for selling their crop. A new tea corporation where small growers are stakeholders, from cultivating to manufacturing to marketing, is changing the way the tea industry works.

Many more small growers like the Panjan Women Mini Tea Plantation Society in Karbi Anglong, Assam, will be joining the new movement that took nearly a decade of planning and preparation to convert small growers into tea manufacturers. Members of the Panjan Women Mini Tea Plantation Society in Karbi Anglong, Assam. The new movement took nearly a decade of planning and preparation to convert small growers into tea manufacturers.

Grassroots movement

The Grassroots Tea Corporation Private Limited, which begins online retail of its main orthodox tea and green tea products on October 8 under its equifarmtea brand, has brought together hundreds of small growers in Assam, mostly from the state's indigenous Bodo community. The new corporation's business model could transform the lives of an estimated 2.5 lakh small tea growers across the country.

"The small growers are at the lowest end of the tea value chain," says J. John, one of the two promoters of Grassroots Tea Corporation. "They are facing the same problems as the farmers," adds John, who has working to organise small tea growers in Assam for the last two decades. "Any risk that happens at the top end, the companies will pass it down to the growers."

In the new model, small growers - farmers who own between half-bigha (.3 acres) and ten bighas (3.3 acres) - collectively set up tea producer companies that buy their green leaf and process it into tea in its manufacturing units. The "made tea", or ready-to-brew tea, is then packaged and marketed by the corporation in wholesale and retail.

Three of the current four tea producer factories under the Grassroots Tea Corporation are housed in Udalguri while one is in the Biswanath district of Assam. Another one is expected to come up in Karbi Anglong district next year.

"Earlier, there was always anxiety whether the company would buy the green leaf. Now I don't have to worry about throwing away the leaf," says Sabin Narzary, a small grower and one of 43 stakeholders in a Udalguri tea producer factory with daily capacity to process 2,000 kg of green leaf. "Earlier, we received only the price of the green leaf, but now we have a factory and will get profits from the corporation too," adds Narzary.

"The tea market is an entrenched system of auction houses, brokers and buyers at the national and global level. We thought there should be a system by which we should aggregate the product and sell in a professional manner," explains John. "A corporation becomes a common aggregator selling it under a common brand," John adds.

According to the Confederation of Small Tea Growers’ Associations in India (CISTA), small growers contribute 51% of India's annual tea production of 1,350 million kilos, the second-largest in the world after China. While countries like Sri Lanka and Kenya - the third and fourth largest tea-producing countries in the world - have measures in place to recognise the role of the small growers, the Indian tea industry has yet to take similar steps.

In the past decade, more than 300 mini tea factories have emerged in India, making types of tea like hand-made organic tea and machine-made organic tea. The tea industry considers these mini tea factories "exotic", with a low production average of 1,000 kg to 10,000 kg per year.

The Grassroots Tea Corporation brings together new tea producer companies owned by small tea growers, and involves them in the procurement, production and marketing strategy. The Grassroots Tea Corporation helps small growers set up tea producer companies, and involves them in the procurement, production and marketing strategy.

Unique model

"The Grassroots Tea Corporation is a unique model," says CISTA president Bijoy Gopal Chakraborty. "At present there is no identity of small tea growers in India. This new model will bring small tea growers' footprint in the Indian tea market," adds Chakraborty, who is serving his third term as CISTA president. "With the remarkable efforts from the grassroots, we hope it will be a changemaker in the Indian tea industry in the coming years."

"We anticipate that more and more small growers will set up producing units in the country and the tea goes in a common brand of small growers," says John. "Small growers should be willing to produce quality leaves and avoid pesticides and chemicals as stipulated by the Tea Board of India. In that process we will get a fair price for our tea. If factories are making profits, a share will go to the farmers. If marketing companies make profit that is also shared with the farmers," he adds.

"Small growers are shareholders of producer companies. Producer companies are on the board of our corporation. Over a period of time, tea producer companies will be shareholders of the corporation too," says John. A recent market survey by the Grassroots Tea Corporation found that there is a growing segment of tea consumers who prefer fair trade. "We are focusing on the social, environmental and health-conscious consumers," he adds.

Mwnswrang Boro, a small grower in Barengabari, finds time to work as a machine operator at one of the tea producer companies in Udalguri district of Assam, in which he is a shareholder along with 59 others. "We built the manufacturing unit last year. It will help us improve our economic conditions," adds Boro, who owns an eight-bigha farm in Udalguri's Pachim Patala village.

At the Grassroots Tea Corporation's packaging unit in Barpeta district, two permanent employees and five temporary workers do retail and wholesale packaging of graded and processed tea. "The farmer is above all in our corporation. They are owners of the gardens and manufacturing units," says Minto Goswami, the manager of the packaging unit. "We have our tea leaves, we have our factory, and we have our own marketing," adds Goswami.

Anupam Bezbaruah, Tea Board of India's Development Officer in Udalguri, says when he first came to the district, he saw many factories returning small growers with their crops. "Green leaves are perishable, you can't pluck and keep them for the next day," says Bezbaruah, who has been working in Udalguri since 2014, the year small growers first began forming self-help groups to improve their conditions.

"Two years later, the self-help groups were converted into registered tea producer companies. In 2018, after a meeting with the small growers, we developed a tribal area subplan scheme where small tea producer companies received 30% of their actual cost in subsidies from the Tea Board. The tea producer companies also got loans from NABARD," he adds. "It is still not sufficient."

"I am very much satisfied with this new model of ownership in the tea industry. It can help the small growers if they avail of all the basic certifications. Only then consumers will opt for their tea," says Bezbaruah. "They have to win over the tea drinkers with taste, look and packaging," he adds. The Grassroots Tea Corporation, which has secured the certifications, will be hoping its 'equifarmtea' will be doing just that in the coming days.

The Grassroots Tea Corporation's initial products include the premium orthodox tea and green tea under its 'equifarmtea' brand for the growing segment of social, environmental and health-conscious tea consumers. The Grassroots Tea Corporation's initial products include the premium orthodox tea and green tea under its 'equifarm tea' brand, for environment- and health-conscious tea consumers.