Darjeeling planters seek financial support amid ongoing shutdown

IANS | 14 July 2017 | Kolkata : Faced with an "unusual situation" arising out of the indefinite shutdown in the northern West Bengal hills, Darjeeling's tea planters have sought "financial support" from the central government, according to a representative body. 

All plucking and manufacturing operations in the 87 gardens in the Darjeeling hills have been suspended since June 9 and the estimated loss to the industry has mounted to over Rs 250 crore. 

Darjeeling has been on the boil since June 8 after the principal hill party, the Gorkha Janmukti Morcha (GJM), renewed the movement for a separate Gorkhaland state. 

The indefinite shutdown called by the GJM began from June 12 Read This - Kingpin of medical admission racket arrested in MP "None of the gardens have been functioning for the last one month due to the crisis. The longer it takes, the more would be the collateral damage incurred by the industry. We are urging all stakeholders to ensure the gardens resume operations. We have sought financial support from the central government," Darjeeling Tea Association (DTA) Chairman Binod Mohan told IANS.

According to him, the industry had earlier faced hardship but it never experienced such a prolonged shutdown in the second flush production period. 

This production is considered the premium variety that contributes about 20 per cent of the industry's annual production and is its economic lifeline as it accounts for approximately 40 per cent of its annual revenue. He said export contracts were also cancelled as there was no harvest in the second flush period. 

"We have written to the Tea Board of India explaining the grim situation the industry is faced with. We are seeking a compensation scheme for the industry so that it could lower the loss to some extent and meet its financial obligations, including payment of labour benefits," DTA Secretary General Kaushik Basu told IANS. 

The Darjeeling tea Industry functions on a very unique economic model. 

The first and second flush provides 70 per cent of the industry's annual revenue, enabling it to operate through the year, Basu said. Mohan said the industry has sought financial support even though tea board officials had earlier pointed out this was not part of government policy. 

"We need persuasion to present our case as it is quite unusual," he said. 

Arguing that all stakeholders, including 500,000 people residing on the tea estates, are being adversely affected due to the present crisis, the planters say the disruption could lead to possible sickness and closure of several tea estates, a trend that would be difficult to reverse. 

Unavailability of the 2017 season's premium second flush tea in the global market was a major blow to the brand equity of Darjeeling tea. 

Planters now fear permanent damage to the future market and value of the premium quality beverage from the region. 

Post-second flush, the Darjeeling tea harvested in the monsoon and autumn is mostly sold at around or below the cost of production. Tea produced during these periods do not attract many foreign buyers, according to Basu. 

Meanwhile, the availability of Darjeeling tea for auction has taken a huge hit due to disruptions in production, leading to depleting stocks in the tea auction centre. 

"Darjeeling tea arrival has come to a halt as there was no production. Darjeeling tea on offer for auction is less this year compared to last year," an official of the Calcutta Tea Traders' Association (CTTA) told IANS. 

On Wednesday, about 56,000 kg of Darjeeling tea were on offer for Sale No. 28, as against the around 93,000 kg on offer for Sale No. 28 last year, the official said. 

Around 47,000 kg was sold, fetching an average price of Rs 571.23 kg, the CTTA official said. 

Darjeeling tea is usually offered from the city auction centre and a declining trend is visible in the amount of tea coming under the hammer. 

According to data, the Darjeeling tea offered in Sale No. 27 was around 67,000 kg in the 2017 season against the around 77,000 kgs on offer a year back.