Abstract:
It has appeared that in the highly productive tea smallholding
sector of Assam there is mismatch of production of green tea leaves and
the processing capacity of the factories to accommodate the flush. The
limit set by the factories on the supply of tea leaves produced by the
smallholders has few repercussions. In addition to the possibility that a
proportion of tea leaves remain un-plucked or not plucked, a fair price
for tea leaves is not ensured to the smallholders in an unregulated
environment of price fixation. This limits margin of profit, which finally
affects investment in maintenance in the smallholdings. Moreover, an
assessment on the operational hours lost by the tea factories due to
erratic electricity supply reveal additional constraints in the tea sector.
Arrangement of alternative power though has prevented the wastage
level of green tea leaves it raises operational costs of the factories. The
decision to acquire a backup power is however considered a rational
decision on the part of the factories as the cost of not having backup is
larger in frequent power cut situation. This paper consolidates the
argument that adequate provisioning of public infrastructure help to
reduce the cost of production and thus raise competitiveness and
inclusiveness of a production sector. While the bearing of low
productivity and high labour cost on competitiveness has attracted the
attention, the influence factors like infrastructure in production,
processing and marketing seems to have not received much attention.
Hence this paper explores the influence of infrastructure on the
performance of tea sector by taking the case of smallholding sector in
Assam.
