Rebalancing the tea market by working with small growers
George Williams looks at how Traidcraft has supported tea growers in India over the last decade, most recently through our EqualiTea project in the north east of the country.
Traidcraft has a long history of working in the tea sector. We have been selling fair trade tea since the 1980s. In the 1990s we worked with Cafedirect to diversify away from coffee and cocoa and launch their Teadirect brand. Then in the mid-2000s we started working with ‘small tea growers’ in southern India, supported by the UK government’s Department for International Development. The term ‘small tea grower’ has a very specific meaning in India and applies to someone growing tea on less than 25 acres of land; however, at Traidcraft, because of our commitment to the most vulnerable producers, we worked with farmers growing tea on less than 2 acres of land.
What became clear very quickly from this work was the need to support small tea growers to work together to establish their own organisations that could provide them with both business benefits and a collective voice. The small tea growers formed into village-level groups, federated into associations. This approach enabled the farmers to achieve economies of scale when buying inputs such as equipment, and meant that they could aggregate their tea leaf and trade directly with the factories themselves – rather than through middlemen, or ‘leaf agents’.
This work led in turn to the founding of India’s first national level confederation of small tea growers. The body has since grown in size and influence to the extent that it is recognised within the Indian tea sector as the voice of small tea growers, and even sits on relevant committees at the Tea Board of India. This is a prime example of where Traidcraft’s work has led to a rebalancing of power within supply-chains: more and more tea has been produced by an increasing number of small growers in India, but until the founding of the national confederation they remained unorganised and overlooked by a sector traditionally dominated by the large estates.
In 2011 we began work to take a similar approach in the tea growing communities of the north east of the country through our EqualiTea programme. We have worked closely with our long term partner Centre for Education and Communication, supported with funds from the European Commission. Over the last five years we have supported over 44,000 small tea growers to form village level groups and reap the benefits that come from working collectively: accessing training from government extension services, buying inputs in bulk and reducing costs, trading together and cutting out leaf agents. The work has been independently assessed by an external evaluator who found interesting results: as expected, the programme had created considerable benefits for the farmers participating in the programme, but it had also helped out other small tea growers in the area.
The evaluator was able to look at the price differential between the farmers selling collectively through their groups direct to the factories and the those selling individually through local leaf agents. Over the course of the five years, local agents have had to steadily increase the price they offer per kilo of tea, from 5-7 rupees lower than the factory price before our work started, to an average of 3 rupees lower in 2016. The price differential is smallest in those areas where organised small tea growers have been most active. What this means is that even those small tea growers who haven’t participated in our project activities have benefited from higher prices as the local market dynamics have shifted the balance of power away from the traders and towards the farmers. For Traidcraft this is extremely encouraging since it demonstrates how our work goes beyond equipping individual producers with business and technical skills, to rebalancing market systems to increase returns for the poorest.
George Williams is Traidcraft Exchange’s Programme Funding Manager