MN Bopana
In a country where 80% of large tea estates are unprofitable, workers are angry, prices are low, and quality is declining, Craigmore Plantations India, a 130-year-old plantation located in the Nilgiri Mountains, remains profitable and a model of sustainability. The 3,000-acre garden with its 1,400 resident employees is led by managing director MN Bopana who accepted the post in May 2004 at the age of 38.
Bopana had been with Tata Tea for 15 years but to take over a tea estate with the legacy and size of Craigmore, at the age of 38, was - and still is - uncommon. In 16 years, he has built a model for the tea industry. But as he says, “The story of Craigmore is not just about the tea.”
He speaks urgently and frankly about the problems facing the tea industry.
STiR: India’s tea industry is in crisis. What makes the current situation worse than what we’ve seen in the past?
Bopana: The industry is sick and ailing. Prices are a challenge. The overall cost of production has galloped by a ratio of 7:1 when compared to tea prices over the last two decades or so.
If you track any company’s all-grade average sale price and compare with its cost of production over the last two-three decades, the answer may be obvious.
Europe, despite demanding compliant teas, is pushing prices down. They have squeezed Argentina out, are squeezing the three African countries (Kenya, Uganda, and Tanzania) to drop prices consistently. The current model is not working with the buyers. Once successful gardens in Kerala, Munnar, Valparai, Vandiperiar are showing high losses in tea and will soon close down, putting the livelihoods of many hundreds of thousands of families in jeopardy.
The writing is on the wall. I fear for those who will continue in this business in the next generation. The revival of the Indian tea industry needs an unbelievably huge shakeup from its very roots!
STiR: How do you view the role of the central government and the Tea Board of India in supporting the tea industry?
Bopana: Governments must be enablers but in India, we have to deal with obstacles. We have a hospital for our workers, and I wanted to extend these services to the villagers living around here, at one rupee for consultations and rupees for admissions, including three full meals. One of the government departments prosecuted the company calling it a commercial business. I had to withdraw the service and no longer provide such services to the local community that we had helped for decades.
On Craigmore, we’ve had two dams since the 1970s or even earlier. I wanted to build a third one, submerging 15 acres of tea at the very end of one of our estate boundaries, to store rainwater and to improve groundwater levels in the plains below. It would have helped recharge the groundwater. It would have benefited or impacted the environment but not Craigmore directly. We needed 18 different permissions because the government didn’t understand why a corporate would do something like this. The project was abandoned as the cost has escalated beyond our means.
Another time, I received a court summons because a notice on our premises was not “at eye level”. I spent 15 half days outside the court in Ooty to explain this as well as some other hyper-technical issues we had been prosecuted on.
There is suspicion about everything.
STiR: What about the Tea Board of India?
Bopana: No one needs to account for decisions taken at the policy-making level. And decisions taken are arbitrary, in some office where people may not understand the nuances of tea cultivation or production or marketing, and without inputs from the producers or buyers. Therefore, large sums spent on opening new trade offices in various foreign countries are closed down in a few years with no business ever emanating from them. But who is answerable for the crores spent of the taxpayer’s money?
Craigmore is acknowledged as the world’s most rainforest compliant estate in tea but not a single senior executive from the Tea Board has ever visited Craigmore in over 16 years to see what we have achieved here, and what can be achieved on other plantations to improve the overall image of Indian tea.
There are archaic laws that need changing. No one explains why it takes six months to get an electricity connection for a new well to provide our workers drinking water. There is no synergy between the various bodies. The tea board wants us to replant bushes but in the Nilgiris, there’s a ban on earth moving machines needed to uproot old tea bushes and to make the land more acceptable for various forms of mechanization.
I strongly believe the days of subsidy must end and free trade permitted. At the same time, all interference from bodies like the tea board must cease. Only the fittest will survive, due to their own efficiencies and not due to doles.
STiR: What about the various associations or tea bodies that exist?
Bopana: The associations have become redundant. They don’t look after industrial negotiations, wage negotiations, tea research.
STiR: Will an expanding domestic market help?
Bopana: India’s advantage is that we are a consuming country more than an exporting one. But we need a better strategy to promote domestic consumption, change the perception that tea is an old person’s drink. There’s a need for a sustained effort to increase per capita consumption. With an annual increase of 50g per person, demand will match supply. If we increase per capita consumption by an average 100g per year, there will be a shortage that will see producers fetch better prices and some sanity restored in this industry.
That being said, a lot of domestic tea does not meet international food safety standards. Who’s going to regulate us? The ball’s been kicked around. Yes, the producer must take majority of the responsibility but who else?
STiR: Are certifications the answer?
Bopana: There are too many certifications. There are 6-7 bodies doing the same thing. Can’t we introduce a global standard for tea? At Craigmore, every consignment is tested for 399 substances just to meet EU food safety norms. Globally, we are acknowledged as the highest compliant rainforest certified for tea. But I have a bone to pick with the RA. I disagree with their audit system because they inform us before their annual audit visit. I have been asking them to do surprise audits, but it seems their concerns are about ensuring that their auditors may not find accommodation if arriving unannounced. But why won’t we make arrangements for them to stay if they land here unannounced? Even better, let RA who charges us substantially for these audits, provide their auditors accommodation if it makes the audit process more stringent.
STiR: What about a local certification like Trustea?
Bopana: Years ago, many big tea packing companies made a public announcement that by 2015, 100% of their tea will be rainforest certified. But something changed because they went on to say that they will be 100% sustainable and not 100% RA certified. Eventually, they brought Trustea as a certification body.
Certifications cost the producers money. There’s no incentive for small grower to get certified. If corporates become more ethical in their sourcing, choosing only certified and reputed producers, it will make a huge difference. It will also motivate small growers to improve various aspects of their cultivation or manufacture, in tune with global food safety requirements.
STiR: What are your recommendations to restore the industry to better health?
Bopana: To the board, I’d ask that they invest heavily in automation and cost reduction without damaging basic assets and infrastructure. To producers, I’d urge them to stop being regressive and adopt new technologies. And to large corporate buyers their business can only survive and grow if there are tea producers. Therefore paying a fair price is critical so that all shareholders continue to remain in business and prosper.