Non-viability of Dooars gardens worries experts

Sovon Manna,TNN | Nov 3, 2015, KOLKATA: Plantation workers at the Duncans tea estate at Bagrakote are caught in a mess. The company has not announced closure. Neither is it running the operation in full swing. Some of the officials are still there in the garden to dismiss the claim that the management has abandoned the garden. 

The fact remains that workers are not getting their wages, not to mention about the statutory dues. Even as the state government claims that it has been reaching out to the hapless families with rice and wheat at Rs 2 a kilo, the deaths continue, and workers have no work. The situation has been deteriorating since February, 2015 with no fresh investment from the company. 

In a bipartite meeting with tea garden workers' unions before Puja, Indian Tea Association (ITA), the umbrella body of North Indian tea producers, has agreed to pay a Puja bonus of 20% of the workers' salary at one go or in instalments. Duncans Group paid 7.33% as bonus on the plea that the Group doesn't belong to any producers' body — neither ITA nor Tea Association of India (TAI). 

Industry veterans, however, blame it on rising non-viability of the Dooars tea gardens. A N Singh, MD and CEO of Goodricke Group, told TOI: "What ails Dooars these days is that the cost of production is going up by Rs 17-18 a kg while the price rise of Dooars tea is on the wane. The organized tea sector in the Dooars is bleeding owing to huge social cost it has been incurring." 

For the last few years, the Centre has been trying to cut down on the added social cost borne by the tea garden owners by raising the wage component of the garden workers. "But nothing has been done in this respect," added Singh. 

According to ITA secretary-general Arijit Raha, the input cost for tea production is rising at 10% on average while the average price rise of Dooars tea is just 3.5% to 4% per annum. Moreover, the producers had to hike garden workers' wage by 14% from last year, which will be continued for the next two years. This year till August, Dooars tea is getting an average Rs 118 a kg price at Siliguri auction against Rs 126 in the year-ago period. "Considering 6% inflation, the loss is actually more," added Raha. 

Although small tea growers (STG) is adding up to the production figure of Dooars, but they are not getting quality and the price as expected. STGs and bought-leaf factories can make their ends meet with a relatively lower price of tea, but even a notch higher rate fetched by big and organized estates cannot keep their margin intact. "Rs 110 a kg price can give profit to an STG, but Rs 160 a kg may cause a big loss to a big garden owner owing to his huge overhead costs," explained an industry expert. 

Krishan Katiyal, CMD of city-based J Thomas & Co, the world's largest tea auctioneer, said, "The gardens in the region are under stress for long time. Only good gardens could put their nose just above water. The costing structure is impacting the industry in a big way."