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Due to the upcoming assembly election in Assam, the development issues of tea tribes in the state have been highlighted in the news. There is no doubt that there is a renewed focus on the tea labour community. This is apparent from the recent budget announcement by the Finance Minister allocating INR 1,000 crore for the welfare of tea garden workers in Assam and West Bengal.
On February 7th, 2021, at an election rally in Sonitpur, Assam, the Prime Minister said that those who were out to malign India’s image also wanted to “systematically” attack Indian tea. India’s tea has been “systematically” attacked, but not by external forces. Systemic weaknesses in the tea industry in Assam make it vulnerable. The plight of tea garden workers in Assam manifests the joint failure of the market, state, and civil society.
There are three systemic weaknesses in the tea ecosystem in Assam that require urgent attention from the government.
1. Outdated management practices
Assam’s tea industry is mostly confined to the tea supply chain’s unremunerative plantation activities. In the tea value chain, value addition activities such as blending, packaging, and marketing (which is the most lucrative) take place outside the state. An ILO-funded study observes that 53% of the profit from tea goes to the retailer, 33% to the blender, 7% to the factory, 6% to buyer/agent, 1% to the tea auctioneer/broker, and a mere 0.16% to the tea plucker.
Tea corporates engaged in tea plantation have not evolved with time. They lack innovation and imagination, as is evident from the fact they still follow several colonial-style practices in human resources and labour management and have outdated production technology.
A plantation manager has to juggle not only the activities of growing tea in the estates and making tea in the factory, but also the management of the entire community of workers and their family members, including schools, ration, health centres, and more. Colonial practices such as Bichaar Din—where the management resolves household conflicts—are still prevalent. This context leaves little room for management at plantations to innovate.
2. Exploitative legislation
Tea plantations come under the Plantations Labour Act, 1951, which requires tea companies to provide several social benefits, apart from wages. Tea companies in Assam, therefore, raise concerns about the high labour cost of producing tea—which is roughly 60% of the total cost of tea production. To bring down the social cost that they bear, and to make the tea sector competitive, companies argue that these costs should be shared by government agencies. Several studies, however, show that very few tea plantation managers fully implement the welfare schemes guaranteed under the act (such as housing, medical facilities, schools, creche, etc.), while the state turns a blind eye to such violations.
Tea garden workers in Assam are not covered under the Minimum Wages Act, and earn a daily wage of INR 167. As a poll sop, the Government of Assam has increased the daily wage by an interim amount of INR 50 per day, by an order dated 23rd February, 2021. This does not address substantive conditions such as high social cost and low productivity that have sustained low wages in Assam tea industry. Without addressing these factors, such sops may worsen the tea industry that is already ailing, and negatively impact its long-term competitiveness and viability.
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3. Systemic marginalisation
The tea tribes are one of the most marginalised communities in Assam. They are still considered ‘outsiders’ and are denied affirmative action benefits in the state in which they have lived for more than 150 years. They are denied Scheduled Tribe (ST) status in Assam, thereby depriving them of various constitutional provisions and government schemes. The government reaffirmed its commitment to provide ST status to the tea tribes to garner the support of the community during the anti-CAA uprising in the state, but it is yet to be implemented. Civil society organisations have not been able to intervene as they have limited access, since the majority of the community is confined within the tea company’s property.
The community constitutes 20 percent of the population and is the backbone of an industry that is one of the state’s main revenue generators. The community fares poorly on all development parameters. To highlight a few: Relative to the national average and even average of the state of Assam, more tea garden children drop out from school and are underweight, and more adolescent girls are anaemic. The maternal mortality rate in the tea gardens of Upper Assam is 404, a rate higher than anywhere else in the country.
The Way Forward
The solutions to the woes faced by Assam’s tea industry do not lie in attacking its imaginary enemies. A series of systemic reforms are needed to address conditions that sustain a low level of equilibrium in the local tea industry.
- First and foremost, reforms are needed to create incentives to invest in improving the quality of tea and adopting sustainable practices at plantations. For the last six to seven years, the average price of tea has remained flat and may have even declined in real terms. While the poor prices may be partly due to the weak demand for tea in the recent period, this alone does not appear to be the complete explanation for the unremunerative prices. It is suspected that large buyers of tea are coordinating on low prices in tea auctions and keeping prices artificially low. This situation calls for an urgent review of the functioning of the tea auction system and reforms to check ‘cartelisation’ if any. Reforms in the price discovery mechanism will go a long way in strengthening the incentives for quality production, and promoting fairness in wages. There is room for the Competition Commission of India to intervene.
- The government must promote investment in value addition in tea and modernisation of local plantations through targeted investment subsidy and tax breaks.
- The Plantations Labour Act has become outdated and requires substantial reforms. It is time that the government rationalises the social obligations of tea plantations stipulated in the act and instead promotes higher wages for the tea workers. This would also benefit the large casual labour force in the tea industry who scarcely benefits from the provisions in the act. Rationalisation will also enable focus on economic objectives such as productivity and technological improvements, besides mitigating the colonial hangover of a patronising manager-labour relationship at tea plantations.
- Finally, going beyond doles offered during elections, the government should take long-term measures to improve the welfare of the tea community by according them the much-needed ST status and expanding the outreach of its welfare programs to the tea community.
This article was originally published on India Development Review.
About the author: Bisoya Loitongbam is a social development specialist with 15 years of cross-functional experience, including implementation of large-scale government programmes, designing donor-funded projects, grantmaking, and financial service delivery. She has worked across sectors including government (DAY-NRLM), philanthropy (Azim Premji Philanthropy), private (ICICI Pru, Ernst & Young), and multilateral organisations in areas of social security, gender, promotion of women-led enterprises, financial inclusion, and institutional strengthening of women’s collectives. She is a management graduate from IRMA with an engineering degree from NIT, Warangal.