Ooty tea growers in worst situation

Its that cuppa that brings the morning cheer. But for the tea growers of Nilgiris, the cuppa is turning out to be a tear-jerker. The picture of gloom is best captured by the statistics that the 62,000-odd small tea growers in the region make it the second biggest such agglomeration of small tea growers in the world after Kenya, and a good number of them are in deep financial trouble. With the result, suicide stories that emanate from cotton cultivating regions of Andhra Pradesh and Vidharbha now seem poised to extend to the tea-growing regions of the Nilgiris district. In the past year or so, 115 small-scale tea factories have closed shop and six suicides have been reported.

The closures have left about 5 lakh workers and 150 entrepreneurs in the lurch. Among the reasons offered for the downturn are the slowdown in Russian demand for five successive years, unscrupulous middlemen and mounting debts. Plantation sources told ET that this had happened despite the good performance of the industry in the last two years. However, they were unable to explain the spurt in the number of suicides in the last one year. The combined production of the 115 small-scale tea factories that closed stood at 15 million kg (m kg) per annum. Not surprisingly, they were mainly exporting their produce to Russia. The very fact that 115 of the 165 factories have had to down shutters is a pointer to the gravity of the problem gripping the small-scale tea sector.

“With the Russian economy taking a beating since 2000, there has been low price realisation for our produce. And, most of the tea growers entrust the marketing of the produce to brokers who advance money on a weekly basis with at least 20% interest on a cumulative basis,” says A Natraj, president of the Nilgiris Small Tea Growers’ and Bought Leaf Manufacturers’ Association. “The industry as a whole has incurred Rs 200 crore by way of interest in the last five years and banks too charge 18% interest which is too high for us to absorb,” says Mr Natraj.The Nilgiris district’s annual credit plan (ACP) for 2006-2007 pegged the outlay at Rs 433.13 crore. But this represents only institutional lending which accounts for 20-30% of the total requirement. The rest apparently comes from moneylenders, who charge usurious interest rates.

Apart from harassment by moneylenders, selling of artificially coloured tea by some blenders and packaging agents have also contributed to the tea growers’ distress, industry sources say. Most of the small packaging agents in Tamil Nadu and Karnataka are allegedly using these colours that have lead content above the permissible limits, to give a red and orange tinge to tea.Confounded by these problems, the Bought Leaf Manufacturers’ Association has appealed to the ministry of commerce seeking an exclusive relief package for the closed/abandoned tea gardens. The association has also appealed to the state government to declare it as a sick industry and extend to it the benefits of an agro-based industry.

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