Tea Board India was founded in 1954 during a period when the nation was transitioning away from colonial legacies. The Board was instructed to promote cultivation, processing, and domestic and foreign trade. Unfortunately, it was also saddled with enforcing regulations — lots of them.
The Board’s 156-page official manual of operations cites “rules” 99 times and “regulations” 22 times. The words “control,” “controlled,” and “controlling” appear 107 times.
In contrast, the manual mentions trade fairs and “tea promotion” just twice — and then only to warn staff from traveling to foreign lands. Advertising is not discussed. There are no provisions to advance the work done by smallholders.
Instead, there was until recently a rule that small growers could not obtain a permit until they submitted a soil analysis proving that their land was sufficiently fertile to support economically viable production despite lack of scale.
Some of the mandated oversight is needed and is appropriate to assign to a tea board. For example, monitoring production totals, acres under tea, aging stock, labor productivity. Or compiling statistics on total transactions and export destinations. But many of the Board’s tasks should instead be done by other agencies.
Scrutiny
Now the Tea Board has come under systematic scrutiny. In August, India’s Comptroller and Auditor General (CAG) submitted a 176-page audit that is critical of the Board for failing to meet its regulatory mandate.
The audit documents many failings, the most telling of which is that production declined during the five years under review (fiscal 2016–2021). Auditors estimate that 46% of land cultivated by large growers is no longer economically viable due to the aging of tea bushes.
The audit triggers a Parliamentary review. It’s important that Parliament take action to reduce the Board’s role as a regulator and instead reinforce its mission to encourage and develop the tea industry.
Pivot
Close oversight is out of sync with a competitive global tea market that rewards agility and innovation. The meddlesome instruments of regulation — operating permits, licenses, approvals, bans, codes of practice, terms and conditions — discourage innovation and improvement. It’s better to step back and let tea producers adopt good agricultural and manufacturing practices as developed by the Tea Research Institute. Non-government organizations like Trustea, a domestic certification group, can promote safety and inspire growers to produce better-quality tea.
To be more specific about improving the Board, here’s what Parliament and the Ministry of Commerce and Industry should do:
- Direct the Board to adopt a marketing strategy focused on growing global consumption of tea rather than just setting short-term sales targets. The Board should emphasize value rather than price. It should promote the distinctive taste of Indian tea in both commodity and premium grades.
- Relinquish to Indian Customs and local law enforcement the task of limiting inferior imports and combatting smugglers. The Board cannot enforce these rules effectively because they lack the funding, personnel, and resources to do so. Let other agencies handle this, which could help create a real deterrent.
- Assign the Food Safety and Standards Authority of India (FSSAI) responsibility for lab tests and quality assurance in tea factories.
Smallholders first
The most important reform should be shifting the Board’s focus away from regulating minutiae. Let it work to inspire today’s hundreds of thousands of small tea growers to take control of their destinies. Smallholders currently produce 52% of India’s tea. This share will continue to increase, helping democratizing production.
More of the revenues from tea need to reach growers. As rural entrepreneurs come to better understand how great tea is made, they will aggregate into communities, improve their product, and add more value themselves.
Throughout the world, smallholders produce most of the tea. Yet their net earnings are only a tiny fraction of the product’s retail price. To increase that share, farmers must learn to become rural entrepreneurs. The initial task is straightforward: Improve tea quality by employing sustainable agricultural practices and efficient manufacturing.
Small growers must come to understand that they are entrepreneurs. Making more money requires looking beyond the field or factory. They must strive to earn higher prices at auction and profit from direct sales. Growers will prosper by looking beyond their everyday tasks in order to collectively learn how to grow revenue.
Tea Board India is uniquely positioned to lead the way.