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Small Tea Cultivation in India and the Future Ahead: A Case Study from West Bengal Region*

CASE STUDY, MANAGERIAL ECONOMICS
ET Cases - GSMC, 9 Pages
AUTHOR(S) : Nirmal Chandra Roy, Research Scholar, Dr. Debasish Biswas, Asst. Professor - Department of Business Administration, Vidyasagar University, West Bengal

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Small Tea Cultivation in India and the Future Ahead: A Case Study from West Bengal Region

 

Tea is called as the ‘Queen of Beverage’ and is consumed most after water. India is the largest producer and consumer of tea in the world and the tea industry provides employment for more than 2.5 million farmers and workers. In India, tea industry is one of the oldest agro-based well-organized industries. Traditionally, one of the important and profitable industries contributes big amount to the national income. Till date, it is bearing its heritage.

Tea industry in India comprises of two components –Set Tea Estates; and Small Tea Growers (STGs). Set tea estates or Estate Gardens are those having an area of plantation beyond 10–12 hectares or 25 acres of land and also having factory of their own within the premises of plantation. On the other hand, STGs means those having an area of plantation within 10–12 hectares or 25 acres of land. STGs do not possess own factory for processing tea from the leaves and have to depend on the bought leaf factories and others. Small tea growers’ contribution in India’s total tea production is 35%.

The small tea plantation has been considered a major source of livelihood and employment for the population of the regional economies. It is located in the backward and rural regions of the major districts of Jalpaiguri, Alipore Duar, Cooch Behar, North Dinajpore and Darjeeling in West Bengal.....

Origin and Growth of Small Tea Plantation

The concept of small tea cultivation came into existence when Kenya (1950’s) had decided to produce tea for export. The experiment taken by Kenya (1950’s) succeeded and a modern trend of small tea holders or growers arose in developing and developed countries to produce cash crop like tea. Since then there was a steady shift in tea cultivation from big plantation to smallholdings. However, in India the emergence of Small Tea Plantations is of very recent...........

From Paddy, Pineapple, Wheat, Potato, Jute to Small Tea Cultivation

In the late 1980s, farmers of the northern part of West Bengal resorted to tea cultivation. The farmers in this region earlier engaged in the cultivation of pineapple (North Dinajpore and few parts of Jalpaiguri as well as Darjeeling), wheat, potato, jute and paddy randomly across the entire Dooars. Due to paucity of available markets, high cost of cultivation, lack of the genuine prices of the product and on the other hand, the pressure of the moneylenders made them vulnerable and a number of farmers every year committed suicide...........

Entrepreneurship and Employment Opportunities in Small Tea Cultivation

Entrepreneur is an economic agent who plays an important role in the economic development of country. For the purpose of economic development, establishment of small business or small manufacturing units are important in a developing country like India. It provides opportunities for the unemployed youth. It requires low capital and low level of barriers to entry and even less competition. In the northern part of the Bengal, besides unemployment the economy is replete with many other problems like poverty, illiteracy, poor health, etc..............

Associations and Confederations

The apex body of growers in West Bengal is the United Forum of Small Tea Growers’ Associations (UFSTGA). It is a federation of eight associations in Uttar Dinajpur, Jalpaiguri, Darjeeling and the Kishanganj District of Bihar. These are:
1. Jalpaiguri Jela Khudro Cha Chasi Samiti
2. Uttar Banga Khudra Prantik Chasi Samiti
3. Uttar Dinajpur Small Tea Growers’ Welfare Association
4. ............

Formation of Small Tea Grower Self-Help Groups (SHGs)

To protect and promote the STGs in India the Tea Board of India under the Tenth Plan Program (2002- 2007) introduced the idea of formation of Self-Help Groups among STGs. Actually, the Tea Board was late to realize regarding the contribution of STGs in tea industry in India has made some space in policy and planning..............

The Present Problems

Price fluctuation of green tea leaves

As per the common features of the small tea cultivation is that the growers do not possess factories of their own and they have to depend mainly on the Bought Leaf Factory (BLFs), Estate Factories and fewer on the SHGs factory of STGs, to sell their green tea leaves.............

Exploitation by the Intermediaries

As the price of the green leaves fluctuates over the year and the non-members of the growers association suffer a lot because of the intermediaries..........

...............

The Problems may Arise in Future

Oversupply or limit in processing capacity of green leaves

The present practices is that the processing factories set the limits on the supply of the quantity of green tea leaves during peak season adding to the woes of the STGs. The processing units (both the estates and BLFs) fixed a maximum amount to be transported and purchased for every ‘carrier’ and refuse to take any extra...........

Demand and Supply of Efficient Labor

It was observed that most of the small tea growing areas face labor shortages during peak seasons. It is expected that the mushroom growing new plantations will be confronted with the source of work force leaves beyond the pre-determined quantity.........

...................

Exhibits

Exhibit I: State-wise Number of Small Growers Registered with the Tea Board of India

Exhibit II: Various Problems Faced by the STGs

Exhibit III: Average Price of Green Leaves (2011-2015) (in INR)

Teaching Note Preview

Small Tea Cultivation in India and the Future Ahead: A Case Study from West Bengal Region

 

Synopsis

The case study gives a brief description about the Small Tea Growers (STGs) of West Bengal, how they resorted to small tea cultivation and benefits of the small tea cultivation, etc. Further, the case study depicts multifarious challenges faced by the STGs in the West Bengal region. The STGs aspire to get rid of the challenges and transform tea cultivation to be more remunerative.

The small tea plantation sector now occupies an important space in the economy of Northern part of Bengal (North Bengal) and contributes to the generation of rural employment. Young and upcoming local entrepreneurs mostly own these gardens, thereby solving the unemployment problems of educated and uneducated youths of the rural as well as urban areas. But now- a-days the small plantation sector passes through a period of crises due to a set of factors, which includes lower profitability and raising cost of production. It is expected if the trend goes long the concept small plantation will be eroded and the economy the region will be affected. The big question is the existence of the small tea plantation in the economy of Northern part of Bengal. This case study navigates the participants through the central issues of entrepreneurial challenges and opportunities. Accordingly, a tentative teaching plan has been prepared [Exhibit (TN)-I]

Prerequisite Conceptual Understanding

  • • Debabrata Mitra, “Globalization and Industrial Relation in Tea Plantation”, New Delhi: Abhijit Publications, 2010
  • • Biswas Debasish and Roy Nirmal Chandra, “Problems and Prospects of Small tea Growers in India with special reference to North Bengal region”. Advances in Management, 2013. Vol. 6(12), pages 27-34

 

Case Positioning and Setting

This case study can be used for the Entrepreneurship Development Course as well as Agro-business Management in MBA, Executive MBA or Executive Development Programs.

Expected Learning Outcomes

  • • The importance of agri-business entrepreneurship in the form of small tea cultivation in the rural India
  • • The various opportunities and challenges of agri-business entrepreneurship
  • • Proper utilization and management of indigenous natural resources

 

Assignment Questions

  • I. What should be the next strategy of the STGs for survival and sustenance? Should they switch over to the traditional paddy, potato, jute, wheat cultivation?
  • II. What should be the appropriate way to mitigate tussle between tea manufacturing factories and the STGs?
  • III. ............

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Abstract

Small Tea Grower (STG) segment accounts for almost 35% of the total tea production in India. The Tea Board of India defines 'STG' as a person who has a tea plantation area of up to 25 acres, but most of them own less than 2 acres of cultivated land.

It provides ample avenues for self-employment generation of educated as well as uneducated youths besides engaging themselves into their family responsibilities. The high profitability coupled with the prospect of getting steady income with minimum effort has attracted a large number of youth especially in the rural areas. Furthermore, this can be considered as a key force for economic growth of a region. The tea cultivation on small holding which is empowering many in the rural areas is the green revolution of North Bengal.

On the contrary, the STGs are also confronting a large number of problems because of legal pitfalls. Tea growers are deprived of getting benefit from different schemes of the Government. Due to absence of a factory of their own, they are deprived of the real price of the green leaves.

In this case study an attempt has been made to showcase the future of the STGs by interviewing them. For this purpose, 150 respondents from the district of Jalpaiguri, Cooch Behar and North Dinajpore in West Bengal were chosen by stratified random sampling method. Conclusions and recommendations were made on the basis of the responses from the respondents.



Pedagogical Objectives

  • The importance of agri-business entrepreneurship in the form of small tea cultivation in the rural India
  • The various opportunities and challenges of agri-business entrepreneurship
  • Proper utilization and management of indigenous natural resources

Case Positioning and Setting
This case study can be used for the Entrepreneurship Development Course as well as Agro-business Management in MBA, Executive MBA or Executive Development Programs.


* GSMC 2016, IIM Raipur

This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
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