Co-operatives as a medium for reviving the small tea sector in the Nilgiris

Abstract

The tea industry in South India, particularly its small sector, has witnessed an unprecedented crisis since the year 2000. The small tea growers in the Nilgiris district of Tamil Nadu have been the hardest hit, with green leaf prices plummeting to non remunerative levels. Nearly a third of these growers are registered as members of cooperative societies that have, in the past, played a pivotal role in improving the economic conditions of the farmers of this hill district but were unable to provide the required support to the growers during this period of depressed prices. In fact, most co-operatives have seen mounting losses and declining loyalty. With elections to the society boards having been kept in abeyance for the past 5 years, growers have been left with little voice and stake in the affairs of institutions that were established for their benefit. Given the situation, this research paper has tried to analyze the performance of the tea co-operatives and the role of various factors in shaping the same. It has concluded that loyalty is the key to controlling overhead costs, which has a direct impact on the ability of the co-operative to pay a remunerative price for green leaf. Ironically, however, leaf price itself impacts on loyalty. Therefore, if the vicious cycle is to be broken, the co-operatives have to improve their revenues by upgrading quality and going in for value addition activities, and then using the surplus to ensure higher level of loyalty from their members to keep costs low. The Government would need to conduct elections and restore the accountability of the officials to the boards. It could also consider providing more functional autonomy to these societies, besides ensuring that competent and committed persons are posted to manage these institutions. In the ultimate analysis, the tea co-operatives have a responsibility to provide leadership to the industry in this hour of crisis and have the capacity to spearhead the revival of the small tea sector in the Nilgiris. It has been concluded in this study that co-operatives can, therefore, indeed become the medium of such a revival