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Darjeeling growers seek halt to Nepal tea imports

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July 17, 2016: Imports of ‘deceptively similar-looking’ teas from neighbouring Nepal are threatening Darjeeling’s tea industry and growers have urged the Centre to take steps to stop low-cost imports.

The commodity imported under the Indo-Nepal Free Trade Agreement is sold in the domestic market affecting both demand and the price of Darjeeling tea, which is reeling under the impact of climate change and high labour costs.

“Teas, imported from our neighbouring country under the agreement are sold to unsuspecting Indian customers in the retail markets,” chairman of the Darjeeling Tea Association Sheo Shankar Bagaria said. “These teas were low-priced as tea is cultivated mostly in the unorganised sector and wages are 50 per cent lower.”

Losses

Almost all the 87 tea estates in Darjeeling reported losses during the last fiscal year, Mr. Bagaria said.

The industry wants the government to amend the Indo-Nepal Free Trade Agreement (due for renewal in 2017) to block the import of orthodox teas. Imports from Nepal stood at 10.5 million kg in 2013-14, accounting for half of total imports as per latest official statistics.

Tea Board officials said that several measures are being put in place to combat this. Mr Bagaria made an appeal to the President Pranab Mukherjee at DTA’s annual general meeting in Darjeeling to curb imports. Tea and tourism act as the backbone of the economy in this region and the estates employ 60,000 workers on a permanent basis and 40,000 seasonally. The plantation area houses more than four lakh people, which is about half the hill population, Mr. Bagaria said.

Falling output

Declining crop is another source of concern for the industry. From 14 million kg in 1991, output fell to 8.7 million kg in 2015.

Pressure from overseas buyers has forced the tea-garden owners to shun the use of chemicals and adopt organic farming. About 54 per cent of the crop is now organic. But the absence of chemical plant boosters and the ageing tea-bushes (some almost 100 years old) also result in a lower crop.

However, it is climate change, which is affecting the fortunes of the Darjeeling tea industry the most.

Unpredictable weather has affected production for the last five years, Kalyan Basu DTA Secretary general said. This year, production of the first-flush teas, cropped between February and April and among the priciest, was affected due to drought-like conditions. This was followed by unprecedented rains, which affected the April-June crop. The second flush teas too are much sought after by importers.

Climate change

“Climate has become chaotic,” said A.N. Singh, managing director of Goodricke. The former Chairman of Indian Tea Association admitted that at least two of Goodricke’s five gardens are making massive losses (about Rs.4 crore annually). Mr. Bagaria said that this year crop was 35 per cent lower and another year of losses was being anticipated by the companies. The 87 gardens are controlled by 30-odd owners. Only some are listed companies.

Climate change is also affecting the quality of tea and although the brew still retains its unique muscatel flavour, prices have been low in the export and domestic market. Industry officials said wages (constituting 60 per cent of the total product cost) were high and the industry was also witnessing a labour shortage. The tea workers were migrating to other sectors, they said.

By Indrani Dutta