Tea export can grow triple-fold in three years

UdayaChapagain

Nepali tea is facing challenges at both the national and international fronts. The recently implemented Labour Act, non-tariff barriers at Nepal-India border while exporting the products to India and the third countries and Indian traders lobbying against Nepali tea are proving to be the Sword of Damocles which might fall anytime and damage the business of the Nepali tea traders.

Nepal produces about 22 million kg tea every year. It exported about 15.04 million kilos Tea worth Rs. 3.20 billion in 2018/19. The 80 per cent of total productionis sold in the Indian market while most of the organic tea produced in the hills goes to the European countries and other third country markets. About 300,000 kilos of organic tea is produced in Nepal.

Indian lobby and obstacles at the customs is the recent phenomenon. On the one hand, Darjeeling Tea Association (DTA) and Tea Board of India (TBI) are lobbying to persuade the central government that the tea from Nepal is substandard. On the other hand, the largest importer might impose non-tariff barriers like delaying the lab test of the tea and product clearance which will increase the cost of Nepali products and make them less competitive in the international markets.

It might come as a surprise to many that Nepal's tea business with the immediate neighbour is functioning on the generosity of the latter, and its not rule-based. It is also not reciprocal. India pressurises Nepal's government to bring its vegetables and fruits to local markets here but does not facilitates Nepal's export of tea and other agricultural goods. It seems that tea producers in Darjeeling want to maintain their monopoly in the Indian market and they are afraid of the growing demand of Nepali tea there.

At the same time, the government is indifferent towards the plight of tea producers and has terminated the subsidies on chemical fertilizers and other agricultural inputs needed for the tea producers. It has increased the production cost of tea. Paddy farmers are enjoying about 67 per cent subsidy on chemical fertilizers but the same is not applied for the tea entrepreneurs. This is injustice. The government has failed to import sufficient fertilizers required for all farmers.

Likewise, the Labour Act 2075 has created multiple challenges as the tea entrepreneurs have a large number of part time workers while the plucking is stopped for about five months a year. A task force led by the Labour Secretary Mahesh Dahal has presented some recommendations to resolve the issue but they are yet to be implemented.

The tea farmers and entrepreneurs have asked the government to allow them to change the objectives of the land so that they can adopt farming of other cash crops like rubber plants.

Similarly, they need concessional agricultural loan and support in the organic certification of the tea. The government should also support the business in digital marketing and promoting Nepali tea in the international markets through Nepali missions and consulates. Facility visits of foreign traders should also be organised routinely. If all these could be implemented, the size of tea export from Nepal could reach Rs. 10 billion in the next three years.

Nepal should learn from Vietnam and Sri Lanka where the government has backed the tea producers with subsidised loans, cash incentives on export and marketing. The best example that the government support can help in booming the industry is the Uttaranchal of India. With the growing incentives and facilities of the provincial government, Uttaranchal had surpassed Darjeeling in tea production.

Chapagain is Past President of Himalayan Orthodox Tea Producers Association (HOTPA).

Published in The Rising Nepal daily on 15 August 2019.