Comparative Study: Tea of Nepal and India
Introduction
Tea is the second most popular drink in the world, after water. For a number of developing countries it is also an important commodity in terms of jobs and export earnings. Tea production is labour intensive and the industry provides jobs in remote rural areas. Millions of livelihoods around the world depend on the production of tea. For a number of tea exporting countries, including world champion exporters Kenya and Sri Lanka, tea is a critical source of foreign income. However, as with many commodities, producer prices have fallen dramatically in recent years. If corrected for inflation, world market prices for tea in the period from 2000 to 2005 were half what they were in the 1980s. And as production costs have not been falling at the same rate and have increased lately, this has obviously put pressure on profitability in the industry. There is evidence that this in turn has negatively affected working conditions and the livelihoods of plantation workers and small-scale farmers in tea producing countries.
The most important cause for decreasing prices is a persistent situation of oversupply on the international market. There is fierce competition between a number of producing countries for market share, by expanding production. Another reason is uneven value distribution. The tea supply chain tends to be complex, with many actors, producers, collectors, traders/brokers and packers involved. However, the buying and retailing end of the market is dominated by a handful of multinational companies that are still profiting from stable retail prices. In contrast with other agricultural commodities such as coffee, cocoa, soy, oil palm or fruits such as bananas, pressing issues from a sustainable development and poverty eradication perspective have received much less attention. Along with other stakeholders such as producers, officials and consumers, multinational tea packers (companies that sell often branded tea blends in bags or packets to consumers)
Tea is the second most popular drink in the world, after water. For a number of developing countries it is also an important commodity in terms of jobs and export earnings. Tea production is labour intensive and the industry provides jobs in remote rural areas. Millions of livelihoods around the world depend on the production of tea. For a number of tea exporting countries, including world champion exporters Kenya and Sri Lanka, tea is a critical source of foreign income. However, as with many commodities, producer prices have fallen dramatically in recent years. If corrected for inflation, world market prices for tea in the period from 2000 to 2005 were half what they were in the 1980s. And as production costs have not been falling at the same rate and have increased lately, this has obviously put pressure on profitability in the industry. There is evidence that this in turn has negatively affected working conditions and the livelihoods of plantation workers and small-scale farmers in tea producing countries.
The most important cause for decreasing prices is a persistent situation of oversupply on the international market. There is fierce competition between a number of producing countries for market share, by expanding production. Another reason is uneven value distribution. The tea supply chain tends to be complex, with many actors, producers, collectors, traders/brokers and packers involved. However, the buying and retailing end of the market is dominated by a handful of multinational companies that are still profiting from stable retail prices. In contrast with other agricultural commodities such as coffee, cocoa, soy, oil palm or fruits such as bananas, pressing issues from a sustainable development and poverty eradication perspective have received much less attention. Along with other stakeholders such as producers, officials and consumers, multinational tea packers (companies that sell often branded tea blends in bags or packets to consumers)