While the cost of growing tea has soared by as much as 94% in the past five years, crippling smallholder growers, the market hasn’t been keeping pace, with prices paid to these growers increasing by just 25%. Compare that to the price of tea on UK shelves, which has risen by just 3.8% over the last three years.
In its new report, RealiTEA, Cafédirect reveals that in order to offer tea at the low prices seen on UK supermarket shelves, compromises have to be made. These compromises usually come at the expense of the farmers at the beginning of the supply chain and directly impact on the quality of tea that ends up in the cup.
For an industry worth £629m in the UK, this is shocking, says Cafédirect. Alarmed by the situation facing their smallholder tea partners, and the future of a good cup of tea, Cafédirect conducted a series of interviews with tea growers from Uganda, Kenya and Tanzania.
Their responses showed that the traditional, artisan skill of hand-plucking the tender top two leaves and a bud (widely considered the only part of the plant suitable for making tea) is being replaced by far less accurate machine cutting. Machine cutting is the standard for mass market, low-grade tea, which results in twigs and the tougher lower leaves in tea bags.
Until now, expert smallholder growers have rejected these mechanical changes, not just because of the effect on quality, but also to protect the long-term health of the bushes and reduce the environmental impact. However, continual pressure on price is forcing famers to make the choice between quality and survival.
The tea farmers also highlighted spikes in production costs, such as the price of oil, which increases transport and fertiliser prices. Living costs have rocketed, with the worldwide cost of food increasing by over 137% in the last five years. This drives up labour costs, such as bringing in extra help during harvest season.
Oxfam’s recent report on tea workers’ wages highlighted the chronic underpayment on plantations, demonstrating that it’s not just smallholders who are suffering at the hands of monopolies.
Wilson Tugei, chairman of the 100% member-owned Siret cooperative in Kenya, describes the extent of the impact to the smallholder growers: “The farmers often have to make compromises elsewhere. When prices are low or crops fail, farmers will have to sell their food stocks, fell trees to burn or sell for charcoal, or they might resort to lease out their tea farms, often at a very low price.
“They will make sacrifices in their personal lives, too. It may be that they cannot afford to pay school fees for their children, or that they might have to change their diet to save money, thereby compromising their health. Some are forced to financially overburden themselves by securing overdrafts and loans to meet their daily needs.”
“The global tea industry is in crisis,” said John Steel, CEO at Cafédirect. “Tea has long been considered a cheap commodity in the UK, a telling sign of a lingering colonial mindset that distances consumers from the real value of tea, with many large companies exploiting local resources while reaping huge profits for themselves. Our demand for cheap goods is twisting and buckling the supply chain and we can’t just sit in a bubble and ignore it because it’s not on our doorstep.
“Look at the horse meat scandal and the horrifying clothing factory collapse in Bangladesh. Businesses are driving down the cost of goods to meet consumer expectation of low prices, rather than meeting their demand for quality and value. It is a downward spiral, stripping out moral and ethical standards and undermining quality. Ultimately we all lose out.”
According to the Fairtrade Foundation, 85% of tea production is controlled by seven multinational companies through their factories and estates, which poses the question of where the profits end up.
When it comes to tea, the ethic of ‘buying local’ is best translated to buying from smallholders. Harriet Muhebwa Katiti, chairwoman at Igara Tea Factory in Uganda, said: “If you buy direct from smallholders, then you know the money is going back into the local economy. If you buy from a multinational, then money will be taken out of the country and spent in other places.”
© FoodBev Media Ltd 2019