Tea industry in Southern India in “dire straits”

United Planters Association of Southern India (UPASI) today said the tea industry, especially planters and small growers, are in dire straits due to fall in prices, increasing labour wages and high cost of fertilisers.

“The current crisis is taking the industry back to the worst ever period the tea growers had at the beginning of this century, as nosediving price has its effect on green leaf prices”, Vijayan Rajes, President, UPASI, said in a statement here.

Around 70,000 small and marginal tea growers with a land holding of about 49,000 hectares in the South depend wholly on tea for livelihood and almost half of the production is contributed by this segment with the tea leaves supplied to the bought leaf factories.

Besides, Kanan Devan Hill Plantations Company, a member of UPASI would be one particular vulnerable entity in this situation, with its unique ownership pattern of around 12,000 employees owning 69 per cent of the shares, he said.

Tea prices in South India with average price during 2014 up to September is dropping to Rs 85 per kg from Rs 105 during the corresponding period last year, a drop of 17 per cent, he said.

At the same time, wages have gone up between 9 to 19 per cent in the tea producing states of Karnataka, Tamilnadu and Kerala, Rajes said.

The huge increase in wages which has no linkage to productivity coupled with spiraling costs of other inputs like fertilisers have crippled the tea plantations, which is on the verge of collapse, he said.

– Courtesy of Economic Times