Although market prices for tea have reached historical highs in 2009-2010, absolute prices are level with or below where they were 30 years ago.
Below you can find out about:
- Challenges faced by tea producers
- Benefits of Fairtrade for producers
- Fairtrade certified producers
- Buying and selling Fairtrade tea
- Fairtrade Standards for tea for small producer organizations and for tea plantations
Although market prices for tea have reached historical highs in 2009-2010, absolute prices are level with or below where they were 30 years ago. At the same time, producers face significant increases in living costs due to food price inflation, reduced crops/yields and depreciation of local currencies versus the dollar.
After water, tea is the most popular drink in the world with 70,000 cups drunk per second. Like cocoa, sugar and coffee, tea is in many ways a vestige of colonial times. Many tea plantations in India, Sri Lanka, and East Africa were originally established during the British Empire. Globally, perhaps as many as 50 million people are involved in the tea industry in many of the world’s least developed countries. Tea is usually grown on plantations and less typically by small scale farmer cooperatives.
Challenges faced by tea producers
Tea is a diverse product with grades and types ranging from mass-market teas used in teabags to high-quality specialty leaf and organic teas. Market prices vary widely, not just according to grade and type, but also depending on the production methods used and the geographical origin. While market prices are currently high, producer costs have risen significantly due to significant increases in input costs (fuel, fertilizer, transport etc) linked to the price of oil and adverse currency movement versus the dollar, as tea is often traded in US dollars.
Tea producer crops and yields are also a concern as weather patterns become increasingly unpredictable with drought conditions reducing production in recent years.
A shift in market demand has affected income as well. In leading Fairtrade consumer markets, such as the UK, there has been a shift toward cheaper African teas and away from tea sourced in India and Sri Lanka along with growth of green teas from China and Vietnam.
Poor labour conditions for tea workers in plantations
Tea workers living on tea estates often depend on the owners for many basic needs, such as healthcare, housing, access to water and primary education for their children
Although labour and pay conditions for tea workers are often regulated by government, historically much tea work is considered unskilled and thus paid at minimal levels. The plight of plantation workers is a well-known issue in many tea-producing countries like India, Sri Lanka and Kenya.
Tea workers living on tea estates often depend on the owners for basic needs, such as healthcare, housing, utilities and access to water and primary education for their children.
However, poor profitability over the past 30 years has eroded investment in infrastructure and led to cost cutting measures. Basic needs are often unmet leaving workers and their children few alternatives but to continue the cycle of dependency and vulnerability.
Climate a concern for many tea producers
Tea production is heavily reliant on established rainfall patterns. In recent years there has been a reduction in overall rainfall levels in many tea-producing regions. These changes have been linked to deforestation and changing weather patterns. The rainfall that does come is often more extreme with long dry periods punctuated by violent floods. As a result, water is not properly absorbed into the soil and/or water table.
Uncertainty around local weather patterns makes it even more important for tea producers to consider how they adapt. Fairtrade is one of the leading pioneers in this area, through collaborative work by Café Direct and GTZ, a German development organization that supports sustainable development. With the Adaptcc (Adapt to Climate Change) programme in East Africa, these organizations have worked with tea producers on a pilot project to look at ways in which they could help mitigate the effects of climate change on their livelihoods. Read more about the project here (PDF).
Benefits of Fairtrade for producers
An increasing number of tea companies and small farmer organizations are working to attain Fairtrade certification to ensure growers and workers are treated more fairly and receive decent wages greater than or in line with legal minimum wage.
Tea workers from Fairtrade certified estates and small holder organizations also benefit from a Fairtrade Premium which is currently paid at 50 US cents per Kilo or $1.10 per Kilo depending on the tea grade. Globally in 2009 over $6m in Fairtrade Premium was paid directly to Fairtrade tea worker committees, for community benefit (schooling, health care, community resources etc.).
The FAIRTADE mark also helps tea producers gain access to new markets. For example, a group of tea producers in Malawi found great success following the Fairtrade Tea Price Review in 2007. Read more here (PDF).
Fairtrade has established standards in tea production for both plantations and small producer organizations.
Standards for tea plantations
Fairtrade Standard requirements for plantations with hired labour stipulate that:
- A Joint Body, including workers and management, must be formed to decide on the use of the Fairtrade Premium,
- The premium cannot be used to cover operating expenses, but rather to improve living and working conditions,
- Forced labour and labour by children 15 years and under is prohibited. Work for children over 15 cannot interfere with their education. They cannot do work that could pose a health risk,
- Workers have the right to establish or join an independent union,
- Salaries must be equal to or higher than the regional average or than the minimum wage,
- Health and safety measures must be established in order to avoid work-related injuries.
Standards for small producer organizations
Fairtrade Standard requirements for small producer organizations stipulate that:
- Revenue is distributed among the members of the cooperative or association,
- All members must have a voice in the decision-making process and in the organization,
- Small producer organizations should manage the Fairtrade Premium democratically and reinvest it according to community needs.
Fairtrade certified producers
You can read a case study of Fairtrade tea producers on the Fairtrade Foundation website. To find out which tea producer organizations are currently Fairtrade certified, you can check the database available on the FLO-CERT website.
Find Fairtrade Minimum Prices and Premiums