Nepali tea has great international market potential as colleagues of FES Nepal learned during a recent visit to Jhapa (Eastern Nepal). However, challenges remain to fully realize the potential for Nepal’s tea sector due to the lack of certification and testing, branding issues, and poor working conditions and limited access to social protection for tea workers.
Last month the governments’ analysis of the budget indicated an economic deficit for Nepal. For a country whose economy is largely dependent on agriculture and remittances, this is not a big surprise. However, tea is in demand because well-made teas from Nepal taste as good as mid-grade Darjeeling and cost much less than that from neighbouring countries. Nepal is making a yearly income of around 8 billion USD from tea production, according to Birtamod section of National tea and coffee development board, Jhapa.
According to Harka Bahadur Tamang, central president of Tea Cooperative Federation, Jhapa, 50 per cent of the tea produced is being exported to India and third countries via India, while 50 per cent is being consumed in the internal market. Ninety-five per cent of the tea produced in Nepal comes from Province Number 1, mainly from Jhapa and Ilam districts.
According to Indra Prasad Adhikari, chief of the Birtamod section of National Tea and Coffee Development Board (NTCDB), “There is a high demand of high-quality tea also in the Nepali market, which is still largely imported from India.”
Nepali tea can be divided into two categories based on their processing techniques: cut, tear, and curl (CTC); and orthodox. CTC tea is primarily produced in an industrial capacity while Orthodox tea is named after the traditional methods of producing tea, which include withering, rolling, oxidation and drying. Half of Nepal’s CTC tea is destined for India, where most of it is blended and resold. But Nepal also ships sizeable quantities of orthodox tea, which is used in blends.
Despite the potential of Nepali tea to turn into a profitable sector, numerous problems continue to challenge Nepal’s tea industry, ranging from certification, labour shortages and high cost of organic farming, to branding, failure to identify new export markets, and a lack of updated technology and expertise. Farmers continue to struggle with inputs for organic tea even though demand is on the rise and it has the potential to fetch higher prices. To be able to fix the price for their produce, farmers and entrepreneurs need adequate support from available state mechanisms. In addition, there is a gap between what consumers are paying as the final price and what farmers are receiving at their end. Most farmers employed in tea are smallholder farmers and are, therefore, deprived of the economies of large-scale production.
The issue of lack of certification is considered by tea entrepreneurs to be the primary reason for the failure of Nepali tea to command fair prices in the international market. Even the certification that was started of late is mainly carried out through third-party organic certification. The high cost of organic certification also poses a big challenge to tea growers, along with procurement of organic fertilizers and bio-pesticides in required quantities.
While there is an urgent need to reduce the cost of organic certification, the state should put in additional efforts to put effective mechanisms in place for product validation and credible certification. As certification alone may not be enough, timely initiatives should be taken to secure a trademark for all varieties of tea. Likewise, specific research on branding initiatives to identify niche markets and segments becomes an imperative.
Source : FES
