A "storm in the tea cup"?- Indian tea growers' woes!

A Indians have this habit of depending for every thing on the government and the farmers are no exception. Whether there is a market slump or depression of crop prices, they run to the government for getting subsidies to compensate for their likely loss. Latest to cry hoarse about market turbulence vis-a-vis prices are tea gardeners who claim that due to lower prices being realized they are under financial stress making their operations non-viable. It is true that keeping in steps with global market dynamics, prices of all commodities, especially those being exported, cannot escape wild swings in market prices but they do not complain when they reap windfall profits during periods when global prices go up through the roof! in a free economy profit or loss is influenced by consumer demand and supply situation and government has a limited role to play in ensuring that such situations do not cause permanent damage to the sector concerned. There is some substance in the argument of tea planters that historically government has forced on them some social responsibility for better welfare of the plantation workers and enforcement of such laws must be relaxed at times of distress. Here is a take on this issue as orchestrated by the industry.  

"Tea prices in South India are at unviable levels, with the average price during the year 2014 up to September dropping to Rs 85 a kg from Rs 105 during the corresponding period last year. At the same time, wages have gone up between 9 and 19 per cent in the three tea producing southern states of Karnataka, Tamil Nadu and Kerala," Vijayan Rajes, president, United Planters' Association of Southern India (Upasi), said. The increase in wages, which has no linkage to productivity, coupled with spiralling costs of other inputs such as fertilisers, has crippled the tea plantations and they are on the verge of collapse, he said. Rajes said the co-relation of wages and the price level was an easily accessible health indicator of the tea industry. When the daily wage in Tamil Nadu was Rs 8.20 in 1980, the average price was Rs 12.66 a kg. The equation gradually changed and in 1995 both were almost on a par — the daily wage at Rs 39.88 and the average price at Rs 41.25 a kg. "If one indexes it on a scale of 100 with 1995 as the base, the wage in 2014 has gone up to Rs 528 in Tamil Nadu, Rs 485 in Kerala and Rs 681 in Karnataka whereas the average price is at Rs 207. In addition to the basic wage, the organised sector spends an additional 75 per cent for discharging the obligations of social costs. Central and state governments are yet to provide support for the sustenance of tea plantations," Rajes said. There are around 70,000 small and marginal tea growers, with a land holding of approximately 49,000 hectares in South India depending wholly on tea. Almost half of South India's tea production is contributed by this segment with the tea leaves supplied to the Bought leaf factories. During the period from January to August 2014, South India's tea production stood at 158.49 million kgs compared to 147.73 million kgs, showing a year on year increase of 7.3 per cent. During 2013, the production stood at 241.79 kgs, a marginal growth of 1 per cent. Plantation sector is additionally burdened with social costs providing housing, medical, educational and other infrastructural facilities to the huge population it supports, which in the normal course is provided by the local administration and the Government for the local population. While the large amounts are saved as the basic civic amenities to the estate population are provided by the estate management, no concessions are given to taxes and other levies. The recommendations and assurances given by many expert Committees for reimbursing part of the expenses incurred for social costs still remain in paper, Rajes added."

Of course even in a wealthy country like the US farmer subsidies are part of the government policy and there is even an anachronism in that farmers are paid money for not cultivating the land to prevent surplus production and consequent market glut causing price depression! Therefore government has a responsibility to ensure tea planters do not suffer too much forcing them to close their operations due to mounting losses. It is here where government needs to have a mechanism to counteract such times of distress which may be of a temporary nature. After all India is the major producer and exporter of tea in the world after China and it is in the interest of the country to see that no major dislocation is caused by occasional economic problems which may be just a passing phase.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

FOOD WASTE-GOVERNMENT INTERVENTION ADVISABLE?

What ever one may think or say about Pakistan as a viable nation, credit must go where it is due. This is with reference to the restrictions put in place in 1997 regarding hosting feasts on occasions like marriage which many observers believe has benefited the country in terms of reducing unnecessary wastage of food. The restriction is basically on the menu that explicitly compels the hosts to confine to very few items. In contrast a poor country like India has millions of millionaires who spend billions of rupees to organize parties and feasts with more than two dozen courses. While one should have no quarrel regarding the right of individuals to spend their money as they deem fit, it is another matter that in most cases more than 50% of the food served ends up in the public garbage dumps. Of course there are scavenging destitute population and animals and birds benefiting from this waste. It is funny to note that GOI is now concerned about these lavish feasts and want to consider imposing some restrictions. Whether such concerns will translate into any concrete action remains to be seen

"Indians planning lavish wedding parties may face pressure to slim down their menus, as the government considers curbing celebrations that highlight a growing gulf between rich and poor. Food Minister K.V. Thomas said April 18 that a panel will consider limiting the number of guests who can be invited to weddings and other social events, as well as the dishes they can be served. Neighboring Pakistan restricts such revelers to one plate of food, he said, something India could emulate. While India's government is reacting after soaring food prices dented the popularity of Prime Minister Manmohan Singh, leading to nationwide protests, wedding planners and policy experts said the proposals would be impossible to enforce and fail to address the root cause of food insecurity in India, home to 42 percent of the world's undernourished children, according to the International Food Policy Research Institute. "It's absolutely ridiculous, it's a reactionary, poorly thought through, populist measure which I don't think is implementable," said Ashish Abrol, a former Deutsche Bank AG wealth manager and employee of International Business Machines Corp., who started the wedding planning firm Big Indian Wedding last year. Consumer-price inflation at 9 percent is the highest in the Group of 20 nations after Argentina and Russia. Thomas says up to 30 percent of food is wasted at weddings in India. About 40 percent of India's fruit and vegetables rot before they can be sold because of a lack of cold storage facilities and poor transport infrastructure, according to government figures".

How far the government will be able to enforce such restrictions is a matter of conjecture. Years ago there was the Guest Control Order which was promulgated to save food when there was food scarcity in the country and the experience in making it work was not encouraging. Austerity must be a national culture and if every one makes necessary sacrifice wastage automatically gets eliminated from the society at large. If there are exceptions for VIPs and other influential people to the food control order, naturally ordinary citizen will not be enthused about the whole idea. India is considered the capital of "black money" and it is known that construction of super luxury homes and throwing lavish dinners are the major routes for spending such unaccounted wealth. Such restrictive orders should not be another route for the babus to make money through bribes for closing their eyes to blatant violations by these super rich people!

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com