The unending Assam Tea Crisis and its implications


People from other states know Assam for two things – 1) Kaziranga 2) Tea. Both have been in the news last month for controversial reasons – Kaziranga has been in the news for forced eviction of the subalterns who, according to the Government were 'illegally' settled in the National Park while the rich continue to encroach upon the poor farmers' land 'legally'. Meanwhile Assam tea did manage to find some space in our newspapers and a minute or two on TV but it failed to capture our attention for long. What exactly is wrong with Assam tea? For a start Assam Tea hasn't been economically as profitable as it used to be mainly due to rising production costs and constant prices of the produce. Production costs have been growing at a compounded annual rate of 10% for the last 10 years while the tea prices have been laggard, a compounded annual rate of 6% only. There has been a decline in demand in the more expensive tea variety while the cheaper tea varieties have seen a considerable boost in demand due to which the profit margins of the Tea Industry as a whole looks dismal. Given the way the pan India tea auctions are structured many tea sellers are finding it difficult in marketing their produce successfully.

We sympathize with the plight of the producers unhesitatingly however as concerned citizens of Assam we must be equally concerned about the plight of the tea workers if not more. Tea workers have probably been the worst hit in the recent tea debacle, tea growers have enough capital to invest it in other profitable sectors but given the limited skill set and almost negligible capital of the tea workers they have a few subsistence options left. I write this article in the light of the recent protests of the largest Tea Labor Union Assam Cha Mazdoor Sangh(ACMS) during the All-India strike witnessed on the 2nd of September and subsequent to these strikes the union a few days ago demanded a 20% bonus, even this union has been subject to criticism from the All Adivasi Students' Association of Assam(AASAA) who have accused the union of being subservient to the tea growers. Having said that the bottomline is tea workers are working in deplorable conditions so much so that the India China Institute in a report in 2015 compared the conditions prevalent in Assam to that of the feudal societies. Of all the organized sectors in India Tea workers have the lowest wages. The report goes onto state that the wages are more unfathomable when taken into consideration the fact that the price of 125 grams of Twinings Assam loose tea leaves cost Rs 777 i.e. 8 times that of the wage laborer picking the leaves. A case of 'Economic Alienation'?Maybe.Narsimha Rao, the PM who masterminded the Indian Economic reforms in 1991 said in one of his last public speeches that trickle-down economics doesn't work, the poor of the society haven't benefitted especially the tea pickers who have had a tiny share of the profits as can be seen from the figure below.

The wages in the tea estates of Assam and West Bengal are pretty low especially when compared to the wages in the southern states of Kerala and Tamil Nadu, the average daily wage in Kerala is Rs 350 while in Assam the wage is Rs 177 almost half of what the workers in Kerala are paid.The onus has been on the trade unions to amass bargaining power in order to strike a favorable deal or else let it be without a fight and think of it as having been dealt a bad hand, trade unions have been an active part in Kerala in ensuring decent wages for the workers but they too are vulnerable to being bought out by the corporates and the political parties which has resulted in continual formation of new tea labor unions. Meanwhile in Assam the process of wage negotiation has never resulted in a wage favorable to the workers, the process itself is flawed. It is determined through a tripartite agreement – the employers, workers' unionand the State are parties to this agreement.  (Centre for Developmental Studies, CDS) observes a few key hindrances in realizing a decent wage in the Assam tea estates in his report sponsored by the Central Ministry of Commerce, as in the case of Kerala the people representing the workers are a class in themselves and they are white collar intermediaries according to Mr. Sarkar hence they do not feel the effect of any unfavorable wage negotiations. The employers seek refuge in the oft-repeated excuse of declining productivity to cover up managerial deficiencies. It is in the interest of the employers to have a large pool of indigenous workers so as to maintain a firm grip on the profit margins and state government too has a role to play in discriminating the workers by not pushing for drastic measures in ensuring decent living wages.

Inflation is a ubiquitous phenomenon in modern day economics and in India inflation has always been high which is not uncommon in fast developing countries. When analyzing the tea wages we need to account for the inflation so as to ascertain the true living conditions of the workers, such an inflation adjusted wage is called Real Wage while the wage not accounted for inflation is called Nominal Wage. The real wage of the plantation wage in India have been on a decline and as can be seen in the table below the real wages of the tea plantations in the country have gone down to Rs 1.78 (at 1960 price level), as said earlier the wages in Kerala and Tamil Nadu are double that of Assam so it's highly likely that the true real wage of Assam is lower than Rs 1.78 which indeed is a shame for Assam being the producer of 52% of the country's total tea produce and 1/6th of the total world tea production.

Real Wages (at 1960 price level)

Many reports have been complied to throw light on the deplorable conditions of the workers in Assam but none has been as comprehensive and detailed as the one made by Columbia Law School, who carried out a case study of Tata's tea plantation subsidiary Amalgamated Plantations Pvt Ltd (APPL). According to the report APPL is complicit in keeping the wages low by setting daily quotas for each task, if they are not able to meet the daily targets then the workers may face deductions of upto half of their daily wages. Though the tea estates have had better chemicals to up the productivity tea plucking techniques haven't changed much, even then the daily targets have increased by 40% on the APPL plantations between 2007-2013. As a result, wage deductions have become more frequent and adding salt to injury workers' wages are on average deducted by almost 30% for both statute enabled provident fund deductions and payments to the company for electricity usage, based on the sample of the case study 50% of the net pay is used to pay off the electricity fees to the company. Even after paying 30-40% of the wages the living conditions have been so bad that it must have made the workers yearn for Stone Age like conditions, which in this case would be a major improvement. The tea estates have always witnessed exploitation of the higher order and this is more evident when one looks at maternal mortality rates, in the 5 major tea producing districts (Sibsagar, Dibrugarh, Jorhat, Golaghat, Tinsukia) the maternal mortality rate is 404 per 100,000 live births while India's maternal maternity is 167 per 100,000 live births, exploitation had been so rampant in the tea estates during British Raj that the issue was once raised by one of the British parliamentarians in a house of commons sessions in 1883, in his address to the house he talked about the death rate of Assam tea estates being abnormally high at 465.7 deaths per 1000. Yes, that is half of the tea estate population. It's not just wage discrimination and poor living conditions that the workers have to put up with, tea estates have been the hotbed of human rights abuses be it the child slavery or slave trade. PM Modi in his Independence Day speech rakes up human rights issue in Balochistan to please the war hungry middle class of our nation but a more sensible step would be to shun Balochistan and deal with our Doomur Dullings and Monabaries first.

Tea was originally grown in China, later it spread to its neighbours. Britishers found it expensive to trade tea from China for gold coins hence they experimented tea cultivation in India, Chabua near Dibrugarh has the distinction of having the first tea estate in the country. Being a labor intensive industry the British relied on the Kachari tribes for labor however once the scale of production increased it brought in huge number of laborers from Jharkhand, Bihar, West Bengal. Many of them belonged to the bottom of the caste hierarchy and this colonial practice of employment based on castehas remained intact till date which is suggestive of a parallel captive society in the tea estates. Many of the tea pickers are Dalits or Adivasis while the staff of the tea estates dominated by Ahoms. In Assam there is no saint as revered as Sankardeva and it's ironic that we find such blatant caste based discrimination in Sankardeva's land and do not act upon it, maybe we value the morning tea more than their lives since we are the ultimate beneficiaries of low priced tea.

Compiled by Kabeer Bora

(Source- and Indian Labor Journal , February 2013)

(Image: Representational image used from the internet)