PLANTATION INFRASTRUCTURE AND THE PERFORMANCE OF ASSAM’S TEA SECTOR:An analysis on the smallholding tea plantation sector

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.