Small Grower tea production-a comparative economic analysis of Kerala and Tamil Nadu

Abstract

Tea is the queen of beverages and a commodity of commercial significance. India accounts for about 23 per cent of the area under tea in the world and contributes 21 per cent of the global tea production. India's share in global tea exports in 2021 was 10.18 per cent. The Tea Board of India defines small tea growers as those having areas up to 10.12 hectares and without any processing facility. Small tea growers constitute an integral part of the Indian tea industry. Out of the total tea produced by small tea growers in India, Assam accounted for the highest share of about 49 per cent followed by West Bengal (31%), Tamil Nadu (12%) and Kerala (6.42%) respectively. In this context, a comparative economic analysis of the small grower tea production in Tamil Nadu and Kerala was conducted with the specific objectives viz., to analyze the economics and efficiency of small grower tea production; to study marketing of small grower tea production and identify constraints faced by the small tea growers in Kerala and Tamil Nadu. The study was based on primary data collected from small tea growers. Sixty farmers were randomly selected from each state based on multi-stage sampling method. The Nilgiris district was purposively selected as it accounts for 80 per cent of the area under tea cultivation in Tamil Nadu. Idukki and Wayanad districts were selected from Kerala as these districts accounted for 70 per cent and 23 per cent share of the area under tea cultivation in the state, thus making a total sample size of 120. Data was also collected from 20 market intermediaries from each state including green leaf agents, Self Help Groups, Primary Producer Societies, ‘Bought Leaf Factories’ and Farmer Producer Organizations, thus making a total sample size of 40. The establishment costs of small tea farms were estimated as ₹3,72,752 and ₹4,16,471 per hectare for Tamil Nadu and Kerala respectively. In Tamil Nadu and Kerala, the weighted average maintenance cost for tea was estimated as ₹86,782 and ₹90,439 per hectare respectively. The total cost of cultivation for tea was worked out as ₹1,32,134 and ₹1,40,652 per hectare per year for Tamil Nadu and Kerala respectively. The cost of production of tea leaves was worked out as ₹13.49 and ₹13.92 per kg, in Kerala and Tamil Nadu respectively. The efficiency of tea cultivation was analyzed using the Cobb-Douglas production function. In Tamil ii Nadu, variables such as quantity of fertilizers and age of the plants were found to be decreasing the yield.