South Asia Report : Plight of tea plantation workers and smallholder famers

12 December 2022 by Sushovan Dhar , SAAPE , Sudhir Shrestha , Sivagnanam Prabaharan

“Tea Plantation Workers Sri Lanka.jpg” by Dennis Keller is licensed under CC BY 2.0. To view a copy of this license, visit

Four countries in South Asia – India, Sri Lanka, Nepal, and Bangladesh – are among the top tea producers in the world and have strong growth prospects. The tea sector has provided direct and indirect employment to millions of workers and farmers in the South Asian region. Demand for made tea has also been increasing with the annual increase in consumption by 2.5% over the last decade, with the increment mainly observed in the producing countries. Tea from South Asia is being sold to domestic consumers and exported to as far as North America, Europe and the Middle East.

With branding and marketing, the value of the end product, especially in the foreign market, is high and has been rising – for instance, Dilmah, a local value-added brand in Sri Lanka, sells in the United States at USD 13.63 per 200 gram (equivalently, USD 68.15 a kilogram). However, compensation to workers and farmers, who lie at the bottom of the value chain, has been meagre. The minimum daily wage of tea plantation workers is as low as USD 1.77 (in Tripura State) in India, USD 1.87 in Bangladesh, USD 2.78 in Sri Lanka, and USD 3.5 in Nepal, and the increment, which often takes place biannually, is too minimal to compensate for even the inflation Inflation The cumulated rise of prices as a whole (e.g. a rise in the price of petroleum, eventually leading to a rise in salaries, then to the rise of other prices, etc.). Inflation implies a fall in the value of money since, as time goes by, larger sums are required to purchase particular items. This is the reason why corporate-driven policies seek to keep inflation down. in the economy. The minimum wages in the tea sector are lower than the minimum wages declared by the governments in other sectors in India, Nepal and Bangladesh – the minimum wage for other sectors is USD 4.67 in Nepal, USD 7.11 in Bangladesh, USD 3.88 in Assam, USD 4.45 in West Bengal, and USD 4.46 in Tripura. Such meagre minimum wage in the tea sector is inadequate to provide for a decent living in terms of nutrition, clothing,
health, and education.

The social security provisions of provident fund and gratuity cover only the permanent workers; however, permanent workers occupy limited share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. of the workforce with the increasing informalisation of work in the sector. For instance, it is estimated that only 30% of the tea plantation workers in Nepal are regular workers. Likewise, the regular workforce employed in tea sector in Sri Lanka declined by around 72% between 1981 and 2018. In this way, tea estates are avoiding their responsibilities of providing social security to their workers by hiring seasonal or irregular workers, thus, replacing the permanent workers and changing their terms of employment. Meanwhile, both the
temporary and the permanent workers are not provided with any medical and accidental insurance. Moreover, the accommodation facilities (linen rooms) provided to workers are dilapidated and have to be maintained by the workers themselves at their own expense.

Women workers occupy at least half of the tea plantation workforce in South Asia but
the plantation fields, where most women work, are not women-friendly. Female workers struggle with hygiene-related issues during menstruation, maternity and child
care Care Le concept de « care work » (travail de soin) fait référence à un ensemble de pratiques matérielles et psychologiques destinées à apporter une réponse concrète aux besoins des autres et d’une communauté (dont des écosystèmes). On préfère le concept de care à celui de travail « domestique » ou de « reproduction » car il intègre les dimensions émotionnelles et psychologiques (charge mentale, affection, soutien), et il ne se limite pas aux aspects « privés » et gratuit en englobant également les activités rémunérées nécessaires à la reproduction de la vie humaine. . Nutrition during pregnancy and postmaternity is inadequate due to which the children borne suffer from malnutrition and stunting. Women are bound to carry heavy loads of tea leaves even during the periods of pregnancy and post-maternity. There are no provisions of proper toilets and washrooms in the plantation fields due to which many women workers have to take days off from work during menstruation, causing income loss. There is also an issue of the gendered division of labour with women restricted to plantation fields with little possibility of advancement towards the managerial level.

Likewise, smallholder tea farmers are not paid a fair price for green leaves. One of the local governments in Nepal has attempted to set the minimum support price for green leaves, but its implementation is challenging as farmers complain that they did not get the fixed minimum price from buyers. In order to fight unjust practice, many farmers in Nepal have formed cooperatives to bargain for a better price and a few have even established factories that process green leaves and produce ‘made tea’. However, they are legally restricted by the state from branding their products and obtaining quality certification, preventing them from competing with the private sector.

In this way, the conventional business model has failed to fairly distribute the returns
received from the sale of end products among workers and farmers. For instance, a kilogram of Dilmah sells for USD 65 in the US while workers in Sri Lanka get the wage of USD 2.67 a day. While the increase in valuation of the product by the consumer is undoubtedly good news for the industry, it is to be ensured that such returns are fairly shared with workers and peasants. Smallholder farmers and plantation labourers perform a significant function in the tea value chain by growing green leaves and processing them while traders, exporters, packagers and wholesalers disproportionately get the most out of the end consumer price in the name of branding, marketing and distribution, although these functions are equally crucial in landing the products to the end consumers. Thus, the tea industry in South Asia has high sales with good prospects, as observed in terms of the rising demand for tea. Yet, the tea estates, manufacturing and packaging companies, traders and exporters in the region tend to make extra profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. by pressing on the wages of workers and on the price of green leaves deserved by peasants.This calls for alternative business models which fairly compensate workers and peasants in the value chain.

Taking note that plantation labourers and small-scale tea growers are at the bottom of the receiving end of the tea value chain and are most discriminated against and marginalised, this research report, based on its findings, recommends the governments of tea – growing countries, private and stateowned tea estates, and tea trading Market activities
Buying and selling of financial instruments such as shares, futures, derivatives, options, and warrants conducted in the hope of making a short-term profit.
companies in South Asia to implement the following courses of action for ensuring fairness in the tea value chain in the region:

 Recommendations for the governments of teagrowing countries in South Asia

1. The governments should ensure the implementation of the declared national minimum wage for all workers, of both formal and informal nature, in all tea gardens, be it large tea estates or small tea gardens, of South Asian countries and efforts should be made towards ensuring a living wage for workers.

2. Wages are to be determined and reviewed periodically based on scientific
evidence (such as the inflation rate in the economy and the increase in the price of the end product) through the process of collective bargaining, which refers to the process of negotiating terms of employment, including wages, social security and working condition, between the employers and the labourers with facilitation from the government authority such as national or state tea board.

3. The tea boards and labour-related authorities in respective countries must monitor the effective implementation of social protection measures, such as provident funds and gratuity, which are to be deposited in the workers’ bank account or paid in cash with payments made on time.

4. The provisions that discriminate against women and men must be ended by ensuring that laws designed to protect women workers, such as the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Acts, are implemented.The specific health needs of women during menstruation, pregnancy, and maternity must be met indiscriminately. The governments should develop a mechanism to ensure the implementation of gender-friendly policies in tea estates. All nation-states should sign up for the United Nations Women’s Empowerment Principles (WEP). As parties to the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW), the South Asian governments should end the gendered division of labour and ensure the implementation of women’s right to equal work and equal pay.

5. The governments of tea-producing countries should pressurise tea estates and tea manufacturers to ensure a transparent value chain, mainly in terms of timely release of information on the level of production of tea leaves/made tea and share of the distribution of returns obtained from sales to workers (in the form of wages and bonus from profit) and smallholder farmers (in the form of the price paid for green tea leaves).

6. The government should strictly enforce the implementation of the provisions contained in national labour laws and tea plantation-related laws, especially related to minimum wage, social protection and working condition, which have been brought into effect through hardfought workers’ struggle. Appropriate standards and monitoring mechanisms are to be strengthened so as to ensure that labourers can report any labour rights violations regularly without fear. Such legal provisions, as mentioned in labour laws and tea plantation related laws, should also be extended and implemented in the case of casual labourers, including those hired by smallholder farmers in small tea gardens. Also, there should be no discrepancy between the national labour and teaplantation laws. The tea plantation workers are to be equally treated as the workers in other sectors, mainly in terms of wage and social protection. Producers are to be incentivised to abide by workerfriendly legal provisions and guarantee the best practices of providing a fair living wage, social security and decent working condition to workers.

7. Provisions of adequate maternity leaves, low work burden during the postmaternity period and the menstruation cycle, clean toilets in the fields, crèche facility or child care centre, and nutritious food for mother and children must be arranged for, first, through the drafting of women-friendly legislations and second, through proper implementation of the existing labour legislation by private and state-owned tea estates as well as smallholder plantations and cooperativerun tea gardens and factories. While many progressive women-friendly legislations have been in existence which were passed in response to workers’ struggles, their implementation is lacking and the states must ensure that they are implemented effectively.

8. Rather than being heavily skewed towards prominent industrialists, investment and incentive mechanisms (such as subsidies in loans and chemical fertilisers) should be directed towards smallholder farmers to make tea farming sustainable and help them upgrade it towards an organic model and, at the same time, cope with the problems of declining productivity. Likewise, the state should declare appropriate minimum support pricing for green leaves to stop the exploitation of smallholder farmers by tea processing factories. The state should initiate a procurement system so that farmers are provided with a minimum support price. In addition, a crop insurance system is to be introduced in tea farming to prevent farmers from climate-related and other shocks.

9. There are many instances of plantation workers working in the same tea field for decades with even their sons/ daughters working as replacements when their parents retire. However, even after working for generations in the same tea plantation field, they are not provided with any ownership over the land they have cultivated for a long time. At the same time, state plantation areas in South Asia are increasingly being privatised and sold to the private sector and Multinational Corporations (MNCs) and even being used to establish hotels in the name of tea tourism while workers are deprived of land rights. Amidst this harsh reality, the government should ensure that land right is guaranteed to workers under certain provisions, which is a crucial step to uplift the workers from the ongoing exploitation. Furthermore, allotting public tea estate land to the private sector and MNCs for a purpose other than tea plantation must be stopped as it threatens the livelihood of millions of workers who depend on tea plantations.

 Recommendations for the private actors in the tea sector in South Asia

1. Tea estates must provide a basic social protection scheme in addition to the minimum living wage determined as per the country’s situation. Tea producers, including tea estates, manufacturers, and packagers, must attend the collective bargaining process (among the workers’ union, producers’ association and government) and abide by the decisions made in such tripartite negotiations. It is to be ensured that workers’ needs for a living wage and social security are genuinely represented and addressed in such tripartite negotiations. Further, urgent efforts are to be directed towards promoting transparency in the tea value chain so that workers understand the contribution of their labour hours in producing end products and how such contribution is valued.

2. Tea estates and manufacturers are to arrange for a decent working environment in tea gardens, including shelter, health, hygiene and education facilities to the level of the governments’ standard.

3. The health and hygiene needs of women, especially those related to the reproductive health of women workers, are to be compulsorily addressed in the workplace. Tea estates must arrange provisions of adequate maternity leaves, low work burden post-maternity and during the menstruation cycle, clean toilets in the fields, crèche facility or child care centre, and nutritious food for mother and children. At the same time, tea estates, both private and State-owned, must adhere to women’s rights to equal work and equal pay, and ensure their career path towards supervisory roles in the tea estates. A proper grievance-handling mechanism for addressing the possible cases of sexual harassment in the workplace must be arranged.

4. Tea estates and manufacturers must provide fair prices to smallholder farmers for green tea leaves so that tea farming is commercially viable. There can be partnerships with farmers to maintain quality, especially concerning organic production and plucking of quality leaves, so that overall value creation can be increased.

 Recommendations for tea buyers and consumers in South Asia and beyond

1. Tea trading companies and buyers must ensure that the workers in tea estates and processing factories, from where the traders and the buyers purchase tea, are fairly compensated with living wage and are provided with proper social protection and decent working condition for men and women workers. Therefore, pressure from tea trading companies and buyers to the extent that they would refrain from buying the products tainted with human rights violations would, at least, make the producers abide by the provisions of legal minimum wage, timely payment of provident fund and gratuity to workers, and gender-friendly working condition.

  Recommendations for the workers’ and peasants’ union in the tea sector in South Asia

1. With the increasing informalisation of work in the plantation sector, it is vital for workers’ unions to prepare strategies to expand their membership to irregular and seasonal workers in the industry. It is also equally beneficial for smallholder farmers to join plantation unions to have a collective voice in pricing green leaves and plantation unions are to take the lead in organising them. The plantation and workers’ unions should also capacitate themselves on the knowledge of the distribution of values across the value chain so that they can effectively participate in the collective bargaining process. Meanwhile, an ideal condition would be for workers’ unions and plantation unions to identify commonalities in their struggle and launch mobilisation campaigns demanding fair compensation, decent working condition, social security, and dignified life.

Source : Saape

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