Crisis in the AssamTea Sector:

While much of the discussion on the impact of globalisation on tea sector revolves around trends in tea auction prices and exports, the present study looks at the post-reform changes in production and labour use in the tea producing districts of Assam. The analysis of growth performance of the tea sector clearly brings out the fact that declining productivity in the sector at the all India level gets manifested in the tea gardens of Assam much more pronouncedly than in any other state or region. Within Assam, while there have been some gains in terms of area in few districts, the dismal performance in productivity growth has been all pervasive, particularly in the last few years. In terms of growth of employment, Assam’s performance has worsened in recent years. Although labour productivity had increased relatively comfortably during the 1980s, during the 1990s labour productivity growth slumped in many of the districts of Assam. Employment elasticity has come down in Assam in the nineties in comparison to the eighties. At the district level, it has declined for almost all the districts during the nineties. The slow growth in productivity as well as in employment has significant implication for labour households dependent on the tea sector. Increasingly they find it difficult to get absorbed in the tea sector, their traditional sources of livelihood.

Several recent studies and reports have reported the growing labour unrest andworsening living conditions of labourers in the tea gardens (Misra, 2002; Khawas,2006). While low labour productivity is frequently cited as the main reason behind thecrisis faced by the sector1, other variables such as inability to expand the area undercultivation, ageing of the tea-bushes2, inadequate replanting of bushes, inadequateinvestments in plant modernisation and labour welfare measures3, and traditional, cost-ineffective management practices have also contributed towards the near-stagnation ofproduction (Sivaram, 2000; Bhowmik, 2002)

The focus of this discourse is on Assam, one of the significant producers of tea in India. While much of the discussion on the impact of globalisationon tea sector revolves around trends in tea auction prices and exports, the presentstudy looks at the post-reform changes in production and labour use in the teaproducing districts of Assam. In Section II the trends of tea production in India andin Assam has been discussed. The growth performance of the tea sector in terms ofgrowth of area, production, and yield has been discussed at a disaggregated level. Inthe following section the trends in labour-use and employment has been discussed.Trends in the growth of labour productivity and employment elasticity in differentdistricts have also been discussed in this section. Summary of findings and concludingremarks have been placed in the final section.

In terms of trends in growth of production of tea, for both Assam and West Bengal,the seventies was the best period, among the five post-reform decades under study.While growth rates of production have been considerably low in almost all the majortea producing states, for Assam it was the worst. Among the southern states, growthin tea production was negative in Kerala and was exceptionally low in Tamil Nadu. Theimportant aspect of the growth performance of the states in the recent years is theremarkably poor performance in production in Assam, as well as north India as a wholeduring 1998-2004.

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