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December 21, 1999

BUDGET 1999-2000

Blitz for the Dar(jee)ling brew

tea gardens of north-eastern India

Nitin Gogoi in Darjeeling

In the final days of the second millennium, one of the most famous beverage brands of the century is being given a publicity blitz, to help it to reclaim its rightful place in the premium segment. Yes, one is talking about Darjeeling tea.

But before one proceeds, here is a story that is often told and retold in Darjeeling.

Email this report to a friend An English lady called up the Tea Board Office in London to ask for help in locating the best Darjeeling tea available in the city. A helpful official agreed to accompany her to a well-known departmental store and select the best of Darjeeling tea. They went to the store's tea counter and asked for Darjeeling tea. A packet was produced. The label on it clearly said "Darjeeling Tea: Produce of Sri Lanka!" Astonished, the Tea Board official pointed out the apparent anomaly. The salesman gave a knowing smile and remarked: "Sir, don't you know the best Darjeeling tea comes from Sri Lanka?"

The anecdote may well be apocryphal but it best sums up the problem faced by the Darjeeling tea industry. The name of Darjeeling tea, arguably India's best-known premium brand -- one kilogram of best quality Darjeeling tea is known to fetch as high a price as Rs 13,000 -- is being rampantly misused the world over.

As Ronen Dutta, secretary of the Darjeeling Planters' Association, the apex body of the industry in the West Bengal Hills, puts it: "The quantity of Darjeeling tea sold worldwide is nearly 45 million kg -- four times the actual production here."

Much before the patenting of basmati rice became a raging controversy, Darjeeling tea has been facing a similar problem. To be fair to the industry, it did launch a logo in 1986 specifically meant to be used for tea produced in Darjeeling. "But," says Dutta, "so far we did not have any legal means to check or prevent anyone from misusing the Darjeeling name."

That is about to change now. A mega ad campaign to publicise Darjeeling tea has at last begun, both in print and on television. Coupled with the publicity campaign, the DPA took two other steps.

  • One, it engaged a well-known firm, Kumaran & Sagar, to register the Darjeeling logo under the provisions of Trade Related Intellectual Property Rights or TRIPs of the World Trade Organisation.
  • Two, in association with the Tea Board, DPA employed a European firm to carry out random checks on various Darjeeling brands of teas sold across the world and initiate legal action against the offenders.

These measures are sure to help the industry in the long run since only genuine tea from Darjeeling would then be accepted, feel DPA officials.

Problems galore for the Darjeeling tea industry

As if the problems with marketing the brand were not enough, planters in Darjeeling are faced with a host of other difficulties like low-yield, rising input costs and stagnating production.

This has put a big question mark over the survival and sustenance of the tea industry with an estimated annual turnover of Rs 1.40 billion.

"The Darjeeling tea industry," says Dutta, "is caught in a vicious circle. It cannot increase production since the market for these high-priced teas is limited. And because production is not increasing, very few gardens can make any operating profit."

Dutta, who has been the DPA's secretary ever since it was revived in 1984, has a point. The average cost of making one kg of Darjeeling tea is Rs 150 whereas the average price that the tea commanded at auctions in 1997 was Rs 140. In comparison, the per kg input costs in Assam tea estates are not more than Rs 50 whereas the average price fetched by the CTC (cut, tear,curl) teas of Assam is well above Rs 75.

In any case, the Darjeeling tea industry, much smaller in size than the one in Assam, was self-sustaining so long as the British were in India. Till Independence, when the planters in Darjeeling were British and the consumers too were largely Englishmen, economic viability was automatically ensured.

After the sahibs departed, the demand for premium teas from Darjeeling within the country dropped dramatically. Connoisseurs of Darjeeling tea point out that most Indians prefer hard-boiled tea for which the CTC variety is perfectly suitable.

Darjeeling tea however needs a special treatment. Its unique feature is the strong aroma and light liquor. The demand for Darjeeling tea thus decreased suddenly. Lack of promotion coupled with increasing costs and continuing low yield (500 kg per hectare as against 1700 kg in Assam) crippled the industry after the 1950s.

Some two dozen tea-estates closed down between 1950 and 1970. Even between 1979 and now, a further 24 gardens have ceased to exist reducing the total area on which tea is planted in the hills from 20,000 hectares to 17,800 hectares at present.

Factors responsible for the downturn

With profit margins being low, very few companies can afford to uproot ageing bushes and replant new ones. As RK Mody, manager of Warren Tea's Phoobsering Tea Estate says: "Replanting new bushes in one hectare of land here could cost as high as Rs 250,000. In plain areas, the same work can be done at one-fourth of our cost."

In any case, in tea gardens located in the Assam Valley or in the Dooars, tractors can be employed to plough the fields but on the slopes of Darjeeling the work can be done only manually, increasing the costs manifold. The hilly terrain also contributes to higher input costs in every field. Procuring rations for workers, maintaining the supply lines, transporting made-tea to the warehouses in Calcutta from the hills adds up to a large fuel bill. In most cases, as a planter says, "it is a hand-to-mouth existence."

Add to that the vagaries of nature. An extended and sustained monsoon in 1998 for instance led to a heavy loss in many gardens. As a whole, DPA member gardens lost planted area of nearly 50 hectares leading to a monetary loss of Rs 108.4 million due to landslides.

Phoobsering, one of the leading gardens in the area, alone lost six hectares of land under tea because of landslides. As Mody says: "Apart from the area lost, there are intangible losses due to landslides which cannot be quantified. For instance, when a landslide occurs in a particular area, the workers are wary of working there during heavy rains fearing for their lives. Obviously, we cannot take the risk and so a lot of valuable plucking time is lost in the process."

GC Somani of Jayshree Tea echoes his sentiments. "This year, the havoc caused by nature has set the industry back quite a bit," he says.

If nature is largely obstructionist, the human factor in the area is no less hostile to the tea gardens. The Gorkhaland agitation in the late Eighties has led to a growth in militant unions among workers over the past decade, leading to increased friction between the management and the workers.

Adding to the confusion is the multiplicity of unions in the area. The management is thus compelled to deal with several leaders, each wanting a new demand to be fulfilled.

Light at the end of the tunnel?

So is there light at the end of the tunnel for the besieged Darjeeling tea industry? Leading planters are wary of predicting the future but attempts are certainly being made to rectify the problems.

At the beginning 1998, a proposal was mooted to raise a development fund for promoting Darjeeling tea. Each member garden was asked to pay a rupee per kilogram of tea produced. With an average production of about 10 million kg annually, this would have meant a corpus of Rs 10 million. The Tea Board was to provide a matching grant. An ideal concept on paper. Unfortunately, many members of the DPA were reluctant to shell out the money until ultimatums were served.

A tea plantation in India Now, sources say, nearly 90 per cent of the members have paid up, equipping the DPA with substantial funds to unleash a series of programmes to promote Darjeeling tea worldwide.

By the beginning of the next millennium, DPA is hoping to be on course to recapture the Old Glory of Darjeeling tea. Unless that happens, the picturesque tea gardens in Darjeeling with the backdrop of the magnificent Himalayan range, would remain only a distant memory in the next century.


Jobless? Go Assam, grow tea!


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