Fairtrade tea leaves foretell a better future

Change is brewing on an Indian tea plantation where, for the first time, women have power, writes Kate Hodal.

A white velvet mist is curling over South India’s Nilgiri Mountains when Selvam Natraj’s morning begins. Shuffling to work in her grey and blue argyle socks, brown loafers, burlap skirt, gold nose ring and turquoise cardigan, she cuts a strikingly bright figure among the rolling emerald hills of dense forest and tea plantations, her breath floating before her in the morning air.

Like most of her 1,000 tea-picking colleagues, Selvam, 53, starts work early. Standing just 5ft tall, she is considered the perfect height for “tea plucking”, backbreaking work that requires suspending a large wicker basket from the crown of her head and picking tea, come rain or shine, for eight hours a day, six days a week.

Having done the same job nearly every day for the past 31 years, she has a set routine: slipping a rubber finger glove onto her right thumb and forefinger, with a decisive snap of the wrist she twists the waxy green leaves off the Camellia sinensis plant (a 4ft tea shrub that can live well over 100 years). She tosses handful after handful into the basket behind her, until her daily quota of 17kg of tea can be set aside, and she can go home.

Although Selvam’s work may be exhausting, tea plucking has recently given her opportunities she had never thought possible. For it is here, among the waterfalls and villages of the southern Indian state of Tamil Nadu, at Chamraj Tea Estate, that some of India’s Fairtrade tea is produced.

Since 1994, when the plantation was certified, annual bonuses for the workers have doubled, wages have risen and the Fairtrade premium – a monthly stipend that goes towards community development – has provided a hospital, school, orphanage, pension and retirement scheme.

While much has been made of the economic opportunities that Fairtrade helps to create across the world, too little is said of the social transformations that such economic change can create. But here in the Nilgiris, social change is happening fast.

EMPOWERMENT

Tea is big business in these mountains, where terraces of green are dotted with tea-picking women in bright magenta, yellow, purple and chartreuse.

Chamraj boasts 850 hectares of tea across a 20km radius, and a whopping two-thirds of its 1,000-strong workforce are women. Just 10 per cent of its annual 1,200 tonnes of output is Fairtrade (and is sold to British clients such as Twinings, Jacksons of Piccadilly, and Clipper, and to the US, Europe and Asia), but the difference those sales have made is notable.

Tea plantations tend to recruit illiterate married couples and casual labourers as their workers, with the majority from India’s lower social castes. But it is the wives and women of these groups who are fully discovering the positive effects of Fairtrade , through increased financial independence, educational opportunities for their children, and advances in gender equality.

“Most of the women workforce belong to the lowest caste, which means that they are normally shunned by society and not consulted over anything for any matter,” says Chamraj’s director, Titus Gerard Pinto.

Now, however, almost as many women as men sit on Chamraj’s joint committee, elected tea pickers and officers who decide how the Fairtrade premium should be spent, Selvam included.

“I’m very happy taking charge now, either in the committee or at home, whereas before I was more shy,” she says. “Making decisions about things like the pension scheme has been good for me.”

“I’m not looked down upon any more,” adds Madina Rajapapa, 39, a picker who is also on the committee. “I’m respected more at home and in my community, and, even though I am uneducated, being on the committee has empowered me.”

Despite her 20 years picking tea, this is Madina’s first position of authority at the plantation, and she is proud to be one of the four women and five men to sit on the committee for the next three years.

“But these women wouldn’t even normally be allowed into other people’s homes because of India’s caste system,” says Pinto. “So for Selvam and Madina to be elected and sit as equals among not just each other but men, too – with whom, in India’s male-led society, they traditionally haven’t had much of a voice – is in itself a great symbol of respect.”

Fairtrade has also allowed women a greater financial independence from their families. The Fairtrade premium pays a lump sum every year into each worker’s bank account towards a pension and housing retirement scheme, allowing them to buy themselves some land and a house on retirement.

“Old age is a curse in India,” explains Chamraj’s Fairtrade officer, Greaves Henriksen. “Once workers stop earning, they are no longer considered 'valuable’ to their family or society and can become a financial burden instead.”

Samati, a widow who retired after working as a tea picker for 36 years, once worried about the effect her retirement would have on her family, but is now relieved that her pension has made her self-sufficient.

“For six years now, I receive my monthly pension and use it for my daily expenses,” she says. “I’m not dependent on my son or his children to provide for me, and I feel happy about that.”

As women in the Nilgiris continue to take on leadership roles, send their children to school and gain their own financial footings, they are empowering themselves in ways that Indian society – especially in the conservative south – has never before been forced to confront.

“Before Fairtrade, the women workers here had almost no power at home,” explains Pinto.

“The transformation since has been remarkable. Female feticide was unfortunately quite common in this region, but now girls are seen as has having a valuable economic role to play in society. Some women here feel so empowered that they’re choosing to leave their husbands. Now that they have the promise of their own money and a house of their own, they’re wondering what good the man is for.”

That women like Selvam and Madina even feel they have the right to consider such an option is not only a testament to their own quest for self-development, but a nod to the power of Fairtrade as well.

Original Story here

We expect another year of very firm tea prices: McLeod Russel

Aditya Khaitan, MD, McLeod Russel, in an interview with ET Now predicts another year of very firm tea prices.

The tea deficit widened to 130 million kgs compared to 110 million kgs that was estimated earlier. What’s your own estimate of the shortfall in production globally and particularly in India?

Globally the world market has reacted in terms of shortage because of the draught that hit Kenya as well as Sri Lanka and India is because of the consumption story. So if you look at the three countries in totality, we are looking at around about 130 million shortage in the inventory pipeline.

I do not see any of these three countries in the near future being able to produce this shortage and meet the consumption growth at the same time.

In India, we are growing at around 3.5% in the consumption pattern, so India needs approximately 35 million kgs every year to feed its consumption growth. You have other countries like Pakistan, Egypt, Middle East and the other countries also growing at a much more slower rate but it is adding to the consumption growth pattern.

So going forward, I see that demand-supply mismatch will remain for the next few years and prices will remain strong for the next few years to come.

Particularly in India, the major tea producing states like Assam and West Bengal are clearly not likely to produce tea until early April. Keeping that in mind, what is your estimate of the shortage that India is likely to face?

We started last year with a shortage of around 20 million. This year, I do not see the production meeting last year’s target, so we will end up with at least a shortage of 10 million. Add to that the 35 million requirement for the consumption growth, you are looking at close to 45 million shortage in the pipeline.

So we will start this year in the month of March-April with about 65 million shortage. Obviously this will work out to the pipeline inventory levels of all the major packers in a very, very low level and they will be hand-to-mouth .

Also, new season tea buyers tend to buy because it is fresher, it is better quality and hence the price reaction will be much, much stronger than what we saw roundabout March-April of last year.

What’s your estimate on tea prices in the coming months?

I would like to clarify that when you talk of prices being all-time high, you must also see from the base from which the prices have started rising. In India, we were running at around Rs. 99-100 for the top level teas in 1999-2000.

From there, the price of tea dropped to Rs 72, in fact lower, and we came down to levels which are below cost of production. So we are now only playing catch-up to meeting the requirement of what is the inflationary levels of tea that should be.

If you just take inflation as a barometer from 1999 to 2010, then we are well below the inflation level also. So you can say the prices are moving up but according to me, we are only playing catch-up. We are still Rs 25-40 lower than what it should have been at this time of the year.

Any estimate for the year 2010 in terms of an outlook
for price?

It is a very, very difficult question to answer because it is basically related to weather also, so going forward, it all depends upon how the season starts in the month of March and April. If we get the rains that we want roundabout February-March to start the season going.

If the weather comes in, I feel the market will still open much stronger and then may be by July, it might start tapering off when the main bulk of tea start coming in. But if we open the year with a drought, then being a commodity, prices can go to any levels.

What are your current realisations per bag then and what does a Rs 10 hike per bag mean in terms of margins for you?

We have been able to increase our volumes over the last few years. For us, we are presently in McLeod Russell producing close to 80 million and a Rs 10 rise will obviously transform to 80 crores to the bottom line.

We have also made two acquisitions overseas with Vietnam last year and recently we have acquired 15 million kgs in Uganda. So obviously the price increase that will take place will substantially add to the growth in the bottom-line.

Our equity is strong. Our debt is coming down every year, so basically going forward, a Rs 10 increase would tantamount to close to 80 to 90 crores to the bottom-line of McLeod Russell.

Do believe that even if the crop is normal next year, we could continue to face supply shortage?

As I said to you that even if India produces 20 million extra this year in its production, it will still be falling behind the demand of 35 million. So therefore, going forward we have come to a situation where according to me the market, the whole that has been created of close to 130 million, will take a long time for any of the three countries to be able to match up.

So do you believe then that you actually expect to see a full year of firming tea prices ahead of us?

Well, we hope so. As per what I can see on paper, yes, we expect another year of very firm tea prices.

You recently acquired Uganda Tea Company for about 118 crores. What’s happening there and are you also looking at raising any funds, any other acquisitions in the non-organic space?

We do not need to raise any funds. We have managed to make the acquisitions out of internal accruals. As I mentioned, our debt equity is quite strong. We have enough cash accruals to meet the requirement and yes, acquisitions are an ongoing process. We will certainly keep on looking at strategic opportunities and if they make sense, we will certainly look at it much more seriously.

So what about acquisitions in Africa. Is that a space you are looking at?

We have a team that is looking around keeping an eye on what’s happening in the various countries in Africa and if any opportunities are around and if they are willing to be sold, yes, we would certainly show interest.