Volume 119 No. 18 2018, 3549-3568 ISSN: 1314-3395 (on-line version) url: http://www.acadpubl.eu/hub/ http://www.acadpubl.eu/hub/ PERFORMANCE OF TEA INDUSTRIES IN SOUTH INDIA A COMPARATIVE ANALYSIS 1 Dr. S. SivaKumar, 2 Dr. N. SaravanaBhavan, 3 Dr. G. Velmurugan & 4 Prof. R. Subashini 1 Assistant Professor of Economics, VIT, Vellore, Tamilnadu, India 2 Assistant Professor of Commerce, VIT, Vellore, Tamilnadu, India 3 Professor of Commerce, VIT, Vellore, Tamilnadu, India 4 Asst. Director (Students Welfare), VIT, Vellore, Tamilnadu, India 1 siva.kumars@vit.ac.in, 2 saravanabhavan.n@vit.ac.in, 3 gvelmurugan@vit.ac.in, 4 rsubashini@vit.ac.in Abstract Tea is the leading beverage consumed by the people in the world next to water. There is no supporting document regarding the countries and people who don t like tea ever. Tea occupies an important place in the economy of the tea producing countries. India is the second largest producer and consumer of tea in the world next to China. In India tea is cultivated in many states like Assam, West Bengal, Himachal Pradesh, Mizoram, Tamil Nadu, Kerala, Karnataka etc. The tea producing states in India are highly contributing to the national economy in the form of GDP, states income, employment, foreign exchange, standard of living of people and others. There are differences among the tea producing states in area under tea cultivation, volume of tea production, export volume and value of tea. The researcher has taken up this issue to analyze and compare the performance of tea producing states in South India. The study area is India. The present study uses the secondary data collected from various sources for the study. The research has used the statistical tools like average, percentage etc., to analyse the data. The study covers the period of 15 years from 2001 to 2015. The study found that the area under tea cultivation has increased marginally, Tamil Nadu is the leading producer of tea in South India, Tea export from Tamil Nadu and South India has declined over the years and average yield per hectare is the highest in Karnataka when compared to other tea producing states in South India. The study suggests that there is a need for stringent effort on the part of the 3549
Tea Board of India and government to increase the production of tea, to protect the conversion of cultivable lands into buildings in Tamil Nadu especially in the Nilgiris district, the government should ensure reasonable price for tea leaves and efforts are needed to increase the tea export from south India to increase the foreign exchange earnings. Key words: Tea production, Tea export, Foreign Exchange, Area under tea etc. Introduction Tea is the leading beverage consumed by the people in the world next to water (Markmanellis, 2014). India is the second largest producer and consumer of tea in the world next to China (Basu Mujumder, A. et al., 2012). Tea is cultivated in many parts of the country. Tea is highly grown in the Northern states like Assam, West Bengal, Tripura and Himachal Pradesh and in Southern states like Tamil Nadu, Kerala and Karnataka. In states like Assam and Tamil Nadu, tea is cultivated in vast acreage. Indian tea was very famous in the world tea market once but after the globalization policy, Indian tea was not able to withstand in the market. Many small tea producing nations like Kenya and Sri Lanka started dominating the entire tea market in the world. It is the cost of making tea, price of tea, quality of tea and others determine the position of any country in the world tea market. As India failed to meet the all the basic requirements, she lost her place in the world market. 2. Objectives of the study The study has the following objective. To study and compare the performance of tea industries in south India. 3. Literature review Bhowmik (1990) examined the trends in export of Indian tea. He observed that the increase in domestic demand adversely affected export. The internal consumption has been increasing consistently while export of Indian tea stagnated at around 200 million kg. per annum. The increase in domestic demand is reflected in the auction price. During the year 1989 the price of ordinary tea is doubled from Rs. 30/- to Rs. 60/-. But the supply response to the increase in price has been very poor, there has not been much increase in production. The production has almost reached saturation level with the existing bushes and became uneconomic as a result of aging. It 3550
is found that one-third of the total existing bushes are uneconomic. In order to increase productivity replanting and rejuvenation are necessary, but it requires huge investments. The growers are resorting to short-term increases such as spraying and increased use of fertilizers for boosting production. The researcher suggests that government support may be extended as subsidy for replanting for long term increase in productivity. Potential exportability of Indian tea has been studied by Asha (1993). The study is focused on the potential exportability of agricultural exports, taking tea as a case, considering the case of expansion of domestic market due to growing population pressure. Indian tea export faces the threat of competition from the growing domestic market as well as the competing countries and as a result the domestic price is increasing. The study reveals that Indian tea is getting less and less due to growing domestic market, resulting in the decline of potential competitiveness of tea export. The export market of Indian tea has been analyzed by Krishna (1995). He observed that production of tea in India has been increased at an annual percentage growth of 1.5 per cent, but the total volume of export declined. Reasons for this decline in exports were lower imports by CIS countries, Iran, Egypt and Saudi Arabia and competition from other producing countries. Sri Lanka is emerging in the world market with increasing productivity and price competitiveness. The export market of tea is also studied by Sundaram (1995). He observed that tea industry in India faced a crisis in 1992 when production lowered, export fell down and the price slumped. India's share in export market has been declining. Since the extensive cultivation is limited in scope, the productivity of the existing plantations has to be increased for increasing production. Most of the tea bushes in India have become uneconomic. Scientific management of small gardens, replanting the existing area, etc. is some of the measures that may be taken for improving productivity. For effective marketing, both in domestic and in international market, branded products have to be introduced with strict quality control. Mitra (1991) argued that the absolute yield of large farms was much higher than that of small farms due to better package of practices adopted in large farms sector in tea cultivation. Mishra S.R. (1984) analyzed the size and efficiency of tea plantation in West Bengal. He had chosen 40 plantations in Terai and Deoars and randomly selected 10 from each of the four different size groups. The study concluded that positive relationship existed between farm size and yield. The yield was higher in large size estates and size was not only the factor which determined the yield, the yield was the product of several other factors. The significant difference in productivity of tea 3551
plantations was due to insufficient resource use in some plantations. The large area plantations enjoyed economy of scale and they achieved more advantageous specialization of plant and machineries. The logical implication of the findings was that the productivity can be increased if the existing size is reorganized. NCAER (1977) conducted a study on Darjeeling tea plantation in 1977 and found that the yield per hectare had positive relation with the size of estates. The tea estates having more than 200 hectares have shown higher productivity than the all India average and the estate less than 100 hectares had shown low productivity. 4. Research Methodology a. Research problem - South India is the leading producer of tea but still the north Indian tea dominates the Indian tea industry in all respect. There are divergences between the tea producing states in southern India in the areas of production, area under tea cultivation, tea export and yield of tea. To study and analyze the reason for this divergence is the central problem of the study. b. Study area The study area is the tea producing states of south India namely; Tamilnadu, Kerala and Karnataka and the research has compared the performance of all these tea producing states in South Indian tea industry. c. Sampling data- The study covers the period of 15 years starting from 2001 to 2015 d. Sampling method The present study is based on secondary data collected from reputed and the reliable sources. e. Method of analysis The researcher has applied basic statistical tools like average, percentage to analyze the data. 3552
5. Analysis and Discussion Table 1: Tea production (in M. Kgs.) Year Tea Tea Tea production Tea Tea production Production in Production production in in Karnataka in South in India Tamil Nadu Kerala India 2001 131.83 65.85 5.44 203.12 853.7 2002 141.84 59.18 5.71 206.73 838.5 2003 166.57 58.01 5.27 229.85 878.1 2004 163.02 62.15 5.62 230.78 893 2005 154.60 67.03 5.38 227.01 946 2006 152.27 68.76 5.26 226.29 955.9 2007 153.13 61.83 5.03 220 944.7 2008 170.53 70.29 6.08 246.90 980 2009 169.36 68.96 5.81 244.13 979 2010 170.72 66.75 5.90 243.37 966.4 2011 165.89 68.88 5.43 240.9 988.3 2012 170.56 63.10 5.72 239.4 1126.3 2013 174.46 62.84 5.59 241.8 1200.41 2014 169.79 65.58 6.74 242.11 1207.31 2015 174.71 63.48 5.52 243.71 1208.78 Source: International Tea Committee (ITC), Tea Board of India 4 3553
Table 1 explains the production of tea at different levels. At the national level, India has progressed in the production of tea as the second leading producer of tea in the world tea market. The total production of tea is 853.7 million Kgs. in 2001 and it has increased to 1208.66 million Kgs, in 2015. The rise in production of tea is 354.96 million Kgs, which constitutes 41.58 percent. At the regional level, the contribution of south India to the national tea production has improved. In 2001, the total production is 203.12 million Kgs. and it has increased to 227.57 million Kgs. in 2015. The rise in tea production is 24.45 million Kgs. which constitutes 12.03 percent over the years. Amongst the tea producing states in south India, the share of Tamil Nadu is impressive when compared to the share of Kerala and Karnataka. In the year 2001, the total tea production of Tamilnadu is 131.83 million Kgs. and it has increased to 163.09 million Kgs. in 2015. The rise in the production of tea is 31.26 million Kgs. which constitutes 23.71 percent. The contribution of Kerala is 65.85 million Kgs in 2001 and it has declined to 57.97 million Kgs. in 2015 which shows negative progress by 11.97 percent. The share of Karnataka has marginally improved. In 2001, the total production of tea is 5.44 million Kgs and it has increased to 6.51 million Kgs in 2015 which constitutes 19.67 percent. It is clear that the share of Tamilnadu in south Indian tea is impressive because of large area under tea cultivation and prevailing suitable weather conditions. Table 2: Tea Export (in M. Kgs.) Year Tea Export from Tea Export from Tea Export South India North India From India 2001 97.2 85.4 182.6 2002 106.6 94.4 201 2003 81.5 92.2 173.7 2004 96.8 100.8 197.6 3554
2005 100.1 99 199.1 2006 119.9 98.8 218.7 2007 72.7 84.1 156.8 2008 87.8 108.2 196 2009 92.7 98.8 191.5 2010 90.8 102.5 193.3 2011 85.2 130.22 215.42 2012 82.3 125.96 208.26 2013 91 128.06 219.06 2014 NA NA 207.440 2015 NA NA 228.660 3555
Table 2 clearly explains that the tea export from India has increased over the years. India is the fourth largest exporter of tea in the world tea market. India s tea is still demanded more in the international market. It exported 182.6 m Kgs in 2001 and it has increased to 228.66 m.kgs in 2015. The increase in the value of export is 46.06 m. Kgs. which constitutes 25.22 percent. As far as South India is concerned, there is a decrement in the quantity of tea export over the years. In the year 2001, the total quantity of tea exported is 97.2 m. Kgs. and it decreased to 91 m. Kgs. in 2013. The fall in value is 6.2 m. Kgs which is 6.38 percent of the total export. The fall in tea export from South India has been compensated by North India. There is a continuous increase in the tea export from North India. It has increased from 85.4 m.kgs. in 2001 to 128.06 m.kgs. in 2011. The rise in tea export of tea is 42.66 m. Kgs. which constitutes 49.95 percent. This is because of the reason that there is a continuous increase in tea production supported by the leading tea producers namely Assam and West Bengal. South India is the leading exporter of tea in the world. It is meeting 17 percent of the world demand for tea. The tea exported from south India is meeting the requirement of the people of 30 countries (B. Radhakrishnan et al., 2012) Table 3: Area under tea cultivation (in Hectare) Year Area under tea Area under tea Area under tea Area under tea Area under in Tamil Nadu in Kerala in Karnataka in South India tea in India 2001 75,625 36940 2128 1,14,693 5,09,806 2002 75,619 36967 2128 1,14,714 5,15,832 2003 75,619 36967 2128 1,14,714 5,19,598 2004 75,978 37107 2128 1,15,213 5,21,403 2005 80,939 36772 2112 1,19,823 5,55,611 2006 81,279 36236 2137 1,19,649 5,67,020 3556
2007 80,903 37139 2141 1,20,181 5,78,458 2008 80,903 37139 2141 1,20,181 5,79,353 2009 80,903 37139 2141 1,20,181 5,79,000 2010 80,903 37139 2141 1,20,181 5,79,400 2011 80,903 37139 2141 1,20,181 5,79,400 2012 80,460 37140 2140 1,19,740 5,79,350 2013 NA NA NA NA NA 2014 NA NA NA NA NA 2015 69,620 35,010 2,220 1,06,850 5,66,660 Source: International Tea Committee (ITC), Tea Statistics and UPASI, Tea Board of India. Table 3 reveals that there is an improvement in the area under tea at national, regional and state level. At the national level, the total area under tea cultivation shows a positive sign. It has increased from 5, 09,806 hectares in 2001 to 5, 66,660 hectares in 2015. There is an increase of 56,854 hectares within 15 years and it constitutes 11.15 percent. At the regional level, the total area under tea cultivation in south India has declined from 1, 14,693 hectares in 2001 to 1, 06,850 hectares in 2012. There is a decrease of 7843 hectares over the years and it constitutes 6.83 percent. At the state level, the area under tea cultivation has declined both in Tamil Nadu and Kerala and increased marginally in Karnataka. It has decreased from 75,625 hectares in 2001 to 69,620 hectares in 2015 in Tamil Nadu, from 36940 hectares to 35010 hectares in Kerala and from 2128 hectares to 2220 hectares in Karnataka. It constitutes 7.94, 5.22 and 4.32 percent respectively. It is clear that among the tea producing states in south India, the area under tea cultivation has fallen at higher rate (7.94%) in Tamil Nadu. This is because of the reason that there are cultivators who are unable to bear loss, not fetching good price for the produce selling their lands for construction industry. This has not only reduced the area under tea cultivation but also the production and productivity of the factors. 3557
Table 4: Average yield of tea Year Average yield Average yieldaverage yield Average yield Average yield of tea in Tamil of tea inof tea in of tea in South of tea in India Nadu Kerala Karnataka India 2001 1751 1764 2615 1771 3418 2002 1893 1563 2741 1802 3377 2003 2203 1569 2476 2004 3605 2004 2146 1675 2641 2003 3633 2005 2022 1591 2545 1899 3548 2006 2014 1641 2547 1910 3594 2007 1984 1507 2423 1851 3518 2008 2108 1893 2839 2054 NA 2009 2093 1857 2714 2031 NA 2010 2110 1798 2754 2025 NA 3558
Source: Tea Statistics and UPASI. Table 4 reveals that yield of tea in India, South India and in different tea producing states in south India show an improvement throughout the years. At the national level, the yield of tea is 3418 Kgs/ha in 2001 and it has increased to 3518 Kgs/ha in 2007. There is an increment of 100 Kgs /ha which constitutes 2.95 percent. At the regional level, the yield of tea per hectare in south India has increased from 1771 Kgs /ha in 2001 to 2025 Kgs/ha in 2010. There is an increase of 244 Kgs/ha which constitutes 3.78 percent. In the case of states, the yield per hectare has increased from 1751 Kgs/ha to 2110 Kgs/ha in Tamil Nadu, from 1764 Kgs/ha to 1798 Kgs/ha in Kerala and from 2615 Kgs/ha 2754 Kgs /ha in Karnataka. This shows an increment of 359 Kgs/ha, 34 Kgs/ha, 139 Kgs/ha which constitutes 20.56%, 1.95% and 5.32% respectively. As far as the average yield of tea is concerned, it is 3527.57 Kgs. which is far beyond the average yield of tea of states and south India. This higher yield per hectare at the national level is contributed by the average yield of the North Indian states like Assam, West Bengal and others. The average yield of tea in Tamilnadu, Kerala and Karnataka are 2032.4 Kgs., 1685.8 Kgs., and 2629.5 Kgs., respectively. Among the south Indian tea producing states, Karnataka s average yield tea is higher than other states average. 6. Findings and Suggestions The following are the important findings of the research study. 1. Tamil Nadu is the leading producer of tea both at regional level (South India) and at the national level (India). It contributes71.68 percent and 14.45 percent to the total tea production of the south India and India respectively. The tea production in Tamilnadu has increased by 23.71 percent between 2001 and 2015 which is higher than Kerala s (11.97%) and Karnataka s (19.67%) tea production during the same year. Still it is found that there are fluctuations in the production of tea at all levels due to failure of monsoon, heavy frost during winter and trade policies of the government, unreasonable price for tea leaf, labour unrest and others. 3559
2. The share of south Indian tea has declined by 6.38 percent and the share of north Indian tea has increased by 49.95 percent between 2001 and 2013 to the national tea export. The rise in tea export from North India over South India is because of the continuous increase in area under tea cultivation, the emergence of new states in tea cultivation like Tripura, Mizoram and others, production of quality tea especially by Assam and high price fetched by North Indian tea. 3. It is found that the area under tea cultivation has decreased by 7.94 percent in Tamilnadu, 5.22 percent in Kerala and increased by 4.32 percent in Karnataka between 2001 and 2015. Though the proportion of area under tea cultivation has fallen in Tamilnadu over the years, it is one of the leading states in total area under tea cultivation. Its share at the south Indian level is 65.16 percent and 12.29 percent at the national level. 4. The yield of tea has increased in all the tea producing states of south India namely; Tamilnadu, Kerala and Karnataka by 20.56 percent, 1.95 percent and 5.32 percent respectively between 2001 and 2010. But among the south Indian states, Karnataka tops in the average yield of tea per hectare with 2629.50 Kgs/ha. and Tamil Nadu with 2032.40 Kgs stands second in the list but Tamil Nadu's average yield is better than the South Indian average (1935). The following are the important suggestions made for the study. 1. Efforts should be taken by the Tea Board of India and the governments to increase the production of tea in the country. India was the leading producer of tea till 2000 but it lost its place to China in the subsequent years. China has realized the health and trade importance of tea and still emerging as a leading producer of tea in the world. 2. India was once the leading exporter of tea and now she is the fourth largest exporter of tea in the world. Srilanka is the leading exporter of tea at present. There is a need for improvement in quality of Indian tea to boost up the export in the years to come. India is losing the market of the traditional importers of Indian tea. Efforts are needed to sustain the existing consumers and finding the new consumers and also to increase the volume of tea export in the world tea market. 3560
3. Due to the progress of real estate sector, many of the cultivable lands are converted into big buildings and apartments. Though the area under tea cultivation has been increasing, the growth rate is not up to the mark. Concretive steps are needed from the government to protect the sale of and construction of buildings in cultivable lands and avoid landslides especially in the areas like the Nilgiris district where tea is cultivated under large scale. 4. There is a huge gap between the price of tea leaf and the price of tea dust. Tea leaf is priced around Rs. 15/- per kilogram but the tea dust is sold around for Rs. 250/- per kilogram. This variation affects the productive efficiency of the factors. In order to increase the yield per hectare, it is suggested that the price of tea leaf per Kilogram mustn t be less than Rs. 25/- and stopping the wild animals threat in tea fields. 7. Conclusion Despite some issues in the tea sector itself, it is still contributing to the exchequer of our nation. All the tea producing nations are encouraging the cultivators to cultivate more tea as it has immense health, social and economic benefits. There are chances for increasing the area under tea cultivation at the cost of multi-story buildings which are not harm to the economy. Tea cultivation has ecological benefit also which prevents soil erosion, prevents pollution etc. Efforts should be made to control the negative aspects of the tea sector like fall in price of tea leaves, wild animals disturbance, conversion of tea fields into big buildings and making our nation a leading nation in the production and export of tea in the world. There are still scopes for further research in this area. I believe that my research work on south Indian tea industry will surely help other researchers in future. References 1. Asha, K. (1993), Competitiveness of India's Agricultural Exports - A case of Tea Exports, M.Phil. Dissertation, Centre for Development Studies, Trivandrum, (Jawaharlal Nehru University, Delhi.) 2. Basu Mujumder, A., Bera, B., Rajan, A. (2012), Tea Statistics: Global Scenario, International Journal of Tea Science, Vol. 8, Issue 1, pp. 121 124. 3561
3. Bhomik, Sharit, K. (1990), 'Tea: Will Prices Fall?', Economic and Political Weekly, April 14. 4. International Tea Committee, 2014. 5. Krishna, Sridhar (1995), 'Tea: Exports Fall Because of Reduced Production; Commodity Focus, Journal of PTI Economic Service, District industrial Centre, Thiruvananthapuram, Vol. XX, No: 5, November 1. 6. Markmanellis (2014), Tea, the second most widely consumed drink, after water a meme, Tea History, April 21, 2014. 7. Misra S.R. (1984) size productivity relationship in tea industry, Productivity, Vol. 25 (3). 8. Mitra, Neelajan (1991), Indian tea industry: problems and policies, Economic and Political weekly, vol.26, No.48, PP.M.153 M.156. 9. National Council of Agricultural Economic Research Techno Economic Survey of Darjeelign Tea industry 1977, New Delhi. 10. Radhakrishnan, B. Durairaj, J., Siby Mathew, Mohan Kumar, P., Udhyabhanu, K.G., Sankaranarayan, P., Ilango, R.V.J. and Subair, M.A. (2011), Performance of South Indian Tea Industry during last one decade and challenges ahead, Planters Chronicle (June, 2012), pp. 5 19. 11. Reddy, V.N. (1991), 'Global Tea Scenario: 2001 AD; Economic and Political Weekly, Vol. XXXVI, No: 8, November 30. 12. Sundaram, Satya, I (1995). 'Tea Industry: Exports and Quality Hold the Key.' Facts for you, Market Survey, Vol. 16, No: 9, March. 13. Tea Board of India. 2015. 3562
14. Dr G. Agila, Dhamayanthi Arumugam, A Study On Effectiveness Of Promotional Strategies At Prozone Mall With Reference To Visual Merchandising, International Journal of Innovations in Scientific and Engineering Research, Vol. 5, Issue.6, 2018, pp.47-56. 3563
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