As workers suffer, Assam tea business chain retains 60-94% of earnings in India, abroad

A recent paper, published by the high-profile UK-based NGO Oxfam Great Britain (GB), has revealed that supermarkets and tea brands in India retain more than half (58.2%) of the final consumer price of black processed tea sold in India, with just 7.2% remaining for workers. “For a typically sized pack of branded black tea sold in India priced at Rs 68.8 for 200g, supermarkets and tea brands would retain some Rs 40.4, while workers would collectively receive just Rs 4.95 per pack”, it says. 

Titled “Addressing the Human Cost of Assam Tea: An agenda for change to respect, protect and fulfil human rights on Assam tea plantations”, the paper is based on the findings of research studies by the Tata Institute of Social Sciences (TISS) and the Bureau for the Appraisal of Social Impacts for Citizen Information (BASIC), further says that it uses “retail prices as a proxy indicator” for its estimate.

Exported abroad, the paper, authored by Sabita Banerji, Robin Willoughby and Amrita Nandy, says, as for the tea sold in Europe and America, an even smaller amount goes to “labour costs to pay workers”. It says that

• In Germany, supermarkets and tea brands are estimated to receive 86.5% of the final consumer price for bagged black tea sold in the country, while labour costs to pay workers represent just 1.4% of the final price.
• In the Netherlands, supermarkets and tea brands are estimated to receive 83.7% of the final consumer price for bagged black tea sold in the country, while labour costs to pay workers represent just 2.9% of the final price. 
• In the United Kingdom supermarkets and tea brands are estimated to receive 66.8% of the final consumer price for bagged black tea sold in the country, while labour costs to pay workers represent just 4% of the final price. 
• In the United States, supermarkets and tea brands are estimated to receive 93.8% of the final consumer price for bagged black tea sold in the country, while labour costs to pay workers represents just 0.8% of the final price. 

The paper estimates, while 80% of Assam tea is consumed domestically in India, the four countries UK, Germany, the Netherlands and the USA, among others, “collectively imported nearly 40,000 tonnes of black tea from India in 2018.
Further estimating that Assam tea workers would needed to earn Rs 400 per day 2017 – quite in line with “living wage estimates from the Global Living Wage Coalition benchmark and the Minimum Wage Advisory Board for tea workers” -- the paper says, even India’s unions called for a national minimum wage of Rs 350 per day for unskilled agricultural workers, which was agreed upon by the Government of India in 2016.

An Assam tea worker holds his payslip

Pointing out that the minimum wages are yet to be implemented, the paper says, the permanent workers in tea estates are paid a cash component of between Rs 137 and Rs 170 a day. “Private plantations pay Rs 167 per day, but the state-owned tea estates pay as low as Rs 137”, it says, underlining, “This is well below the minimum wage level for unskilled agricultural workers”.
Pointing out that 50% of the tea worker households own ‘below poverty line’ ration cards issued by the Government of Assam, making them eligible for rations of 5kg of rice per family member per month, the paper believes, “This is official acknowledgement that tea workers do not earn enough to survive on.” 

According to the paper, more than a third (37%) of the households surveyed on the tea estates visited, reported that their expenditure exceeds their income, "which means that they have recurrent debt”, regretting, “Most workers are not aware of how their wages are calculated. This is sometimes because payslips are not provided – more than 50% of the workers interviewed said they do not receive a payslip against their weekly or fortnightly payment.”

A third of the households surveyed reported that their expenditure exceeds their income, which means that they have recurrent debt

The paper further says, “Provident fund deductions are a statutory requirement, but workers reported being unaware of the amount deducted. They also described difficulties claiming their benefits on retirement. Workers reported that it takes 12-36 months to receive their pension. In one case, the estate has gone into debt and can neither pay the pension nor return the workers’ contributions.”
Despite tea being a year-round crop (with seasonal peaks), the paper says, “Employment is not guaranteed – even for so called ‘permanent workers'.” Thus, “Worker-manager conflict over wages and conditions has led to some estates closing completely, leaving workers destitute. A worker on a government-owned estate that had closed for three years from 2001 to 2004 said that during the closure, workers and their families only avoided starvation by seeking menial jobs outside the estate, or selling wood stolen from nearby forests.”
Based on interviews with 510 workers on 50 Assam tea estates that supply to tea brands and supermarkets internationally, the paper give details on how women tea workers “undertake up to 13 hours of physical labour per day after just six hours’ rest”, and how "most workers do not have access to safe drinking water, and "Indian tea estates are legally obliged to provide decent housing, healthcare, education and working conditions – but are clearly failing to do so.”