Poor profits, globalization, insurgents play havoc with India’s tea industry

But the business of tea? It’s best not to ask.

Manoj Jalan, a fifth-generation planter with a 5,000-acre (1,950-hectare) estate, summed up his situation simply: “This is a rough business.”

“I was born here, in this building,” Jalan said, standing in front of a colonial-era house. “Tea is a way of life for us.”

India has long been famous for its tea, and the US$1.5 billion (euro1.06 billion) industry launched by British colonials nearly two centuries ago is, after China, the world’s second largest. More than 1 million tons were grown in 2007, much of it here in the northeastern state of Assam.

But production costs are mounting and a brutal insurgency has targeted the planters. Globalization, with the spread of cheaper tea from countries such as Vietnam and Kenya, has increased competition. While there have been glimmers of good news recently — a US$320 million (euro225.67 million) revitalization package announced by the government, and an uptick in prices from historic lows — the business is still at the bottom rungs of profitability.

Things have changed since earlier generations of planters cleared the forests, planted the tea and built an enormously profitable industry.

“I must confess,” Jalan said. “They did a better job in their time than we’ve been able to do in our time.”

Planters like Jalan, whose families piloted the industry after independence from Britain 60 years ago, have been forced into a brutally competitive marketplace.

On one side are corporations that maximize profits through enormous scale, with dozens of estates and tens of thousands of workers. On the other side are the growing number of micro producers, many with just a couple acres of land, that are increasingly powerful in the market. All are competing in a market where prices have fallen 30 percent in just a decade.

Then there’s the United Liberation Front of Asom, whose revolt has killed some 3,000 people over two decades, and helped turn the region into a backwater of unemployment. Planters have been prime targets — more than a dozen killed and at least 20 more kidnapped. Extortion payoffs, farmers say privately, are common.

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