Tea—South Asia
Although tea (Camellia sinensis) is native to China, tea production shifted from there to South Asia in the first half of the nineteenth century. Today South Asia is the most important producer and exporter of tea (in 1998 accounting for 30.3 percent and 38.8 percent, respectively). A massive workforce, about 1.5 million people, is engaged in tea production in South Asia, and tea is responsible for a considerable, though declining, share of export earnings for the producing countries. Tea is produced in about twenty-five countries, the most important (outside South Asia) being China, Kenya, Turkey, and Indonesia. The main consumers are (in descending order of consumption) Russia, the United Kingdom, the United States, and Egypt. Tea is produced in three main varieties: as orthodox tea (main producer is Sri Lanka), as CTC-tea (where the leaf is cut, teared and curled before firing/heating; main producers are India and Kenya) and as green tea (manufacture without firing; main producer is China). In South Asia a large and growing proportion of tea is consumed internally (in India more than two-thirds of production) as a popular and extremely cheap soft drink (often prepared on the road in "tea stalls") and sold most often in packets, very rarely in bags or as iced tea.
India
India is by far the most important tea producer in the world. In India tea production began in 1838 and slowly spread from Assam (still the most important teagrowing area) to other parts of north India and later to south India (Nilgiri Hills). First planted by individual farmers, tea quickly became a company business owned by British firms, which withdrew from the subcontinent (especially in the 1950s and 1960s) only because of declining tea prices, growing labor unrest, strict (government-imposed) social obligations (to provide employees with free housing, schooling, health care and so on), and narrow ceilings on foreign ownership.
Most Indian tea is produced on big plantations; small landholders play a role only in south India. Although India is responsible for nearly 30 percent of world tea production, it accounts for only 16 percent of world exports, as an increasing proportion is consumed locally. The government has often intervened in tea exportation by setting export quotas to protect local consumers (tea is treated as an essential commodity), by restricting plantations' land acquisition and use through land reform acts, and by imposing heavy taxes on tea companies. The Indian tea industry is in a healthy condition, apart from a few "sick gardens" taken over by the government, and productivity per hectare is very high. Nonetheless in 2001 south Indian wholesale prices of five rupees per kilogram made tea production unprofitable for small producers.
Sri Lanka and Bangladesh
In Sri Lanka tea production began in 1867. Individual planters were soon replaced by British companies, which managed their estates by means of local agency houses. Fieldwork and picking were carried out by an immigrant workforce that arrived in large numbers from south India until the Indian colonial government called a halt to the emigrations in the 1930s. The state has supported the expansion of the plantation system by taking over land to which nobody could provide a legal title, providing infrastructure, and ensuring generous tax treatment.
Independence in 1948 led to almost immediate revolt against the plantation system, escalating export taxes, government interference, and finally (in 1972 and 1975) nationalization of the tea estates, which were brought under two state corporations. Their unsatisfactory performance slowly paved the way for privatization of management in 1992 and for full privatization after 1996. Sri Lanka has lost export market shares (1998: 21 percent) and reputation for tea quality until recently; since privatization, performance is improving.
Bangladesh is responsible for only 1.9 percent of world tea production and consumes 60 percent of its own production.
The Future
Tea was once the pillar of India's and Sri Lanka's export economy and as such an easy target of anticolonial agitation. Since independence, tea has lost much of its former economic importance in these countries. The falling relevance of tea exports (but not consumption) for South Asia could not have been avoided, because world consumption is increasing very slowly, causing tea prices (in real terms) to stagnate or decline.
Further Reading
Betz, Joachim. (1993) Agrarische Rohstoffe und Entwicklung: Teewirtschaft und Teeproduktion in Sri Lanka, Indien, und Kenia (Agricultural Raw Materials and Development: Tea Business and Tea Production in Sri Lanka, India, and Kenya). Hamburg, Germany: German Overseas Institute.
De Silva, S. B. D. (1982) The Political Economy of Underdevelopment. London: Routledge and Keagan.
Forrest, Denys. (1985) The World Tea Trade. Cambridge, U.K.: Woodhead-Faulkner.
Rote, Ron. (1986) A Taste of Bitterness: The Political Economy of Tea Plantations in Sri Lanka. Amsterdam.
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