Print Edition - 2014-09-14 | MONEY
Hit by low price, tea farmers set up own mills
Sep 13, 2014-
Unhappy with low prices offered by big tea factories, farmers in the eastern hilly districts are setting up their own tea mills through cooperatives. The farmers have blamed big factories’ “syndicate” for decreased prices. In Ilam, about half dozen small tea factories have already opened, while as many plants are expected to come into operation in the near future. The district now has two dozen big tea factories and 38 small factories.
However, the products of the small factories are struggling find the market. People usually purchase tea produced by small factories for gift purposes, and very less quantity is exported to India and other countries. The small factories generally produce organic and green tea.
Tea farmers’ cooperatives, including Tinjure from Phakphok, Ajambare from Jitpur, Ilameli from Fikkal, Kanyam Tea Cooperative from Kanyam and Siddhathumka Cooperative have opened 11 small tea mills. Prithvinagar and Bahundangi Cooperatives of Jhapa have also opened two CTC tea factories. According to the Central Tea Cooperative Association, these medium-level factories process 500-1,000kg tea daily. One such factory needs Rs 6-10 million investment.
Farmers from Kanyam recently established a factory through a cooperative. A total of 136 farmers associated with Kanyam Tea Producers’ Cooperative, have made share investment of Rs 8.02 million in the project, according to Surya Khadka, manager at the cooperative. The farmers have taken loans worth Rs 3 million from National Cooperative Bank to operate the factory.
Khadka said that farmers had to set up their own factory as the big ones offered lower prices. The factory processes tea produced by cooperative’s members only. “The farmers have planted tea on more than 2,000 ropanis,” said Khadka. The factory offers Rs 30 per kg to the farmers, whereas other big mills offer just Rs 20.
The cooperative has also started producing compost fertilisers using earthworms to make tea farming fully organic. President of the cooperative Nara Kumar Shrestha said they established the factory to protect the farmers from price volatility. Earlier, the farmers had been forced to sell their produce to Indian traders as domestic factories offered lower prices. “The plan to open the Tea Auction House in Jhapa is expected to help domestic tea produces,” said Govinda Dahal, president of Central Tea Cooperative Association.
Published: 14-09-2014 09:33