Darjeeling First Flush Experiencing Jittery Start

DARJEELING, West Bengal

The arrival of West Bengal’s chief minister for a two-day business development summit signals a strong desire to expand opportunities locally. But Minister Mamata Banerjee’s arrival comes amid heightened anxiety in the Darjeeling Hills as tea workers complain about conditions there. The first flush harvest, critical to the financial health of 87 gardens, begins this week with only reluctant support from workers. Those awaiting the second installment of a 2017 bonus are a flashpoint. Only 14 of 87 gardens have complete payment, according to The Telegraph (Calcutta). On Monday, some members of the Gorkha Janamurti Morcha (GJM) labor union were urging workers to stay home. The GJM led a 104-day work stoppage in 2017 that cut production to less than 8 million kilos, resulting in a loss of about 67%. The strike began in June 2017 after workers had plucked the lucrative first flush teas.

Delays now are more serious as tea plucked during the first month of the harvest accounts for 35 percent of total revenue. This year, growers in Nepal are ready to supply the world an alternative, comparable Himalayan Tea that is priced 60 percent less than Darjeeling. Kaushik Basu, secretary of the Darjeeling Tea Association, told the Economic Times that the “total estimated loss that Darjeeling tea industry suffered in 2017 is to the tune of INRs 350 to 400 crore ($61.6 million). We are writing to the commerce ministry on this so that they can take it up with the finance ministry,” he said.

Garden owners drew down their banking lines of credit last year to meet expenses and pay the annual bonus equal to 19.25 percent of each worker’s annual wage. A.N. Singh, managing director of Goodricke Group, told the Economic Times  “We had suffered a loss of INRs 10 crore ($1.5 million) from our Darjeeling operations in 2017. We have been able to survive as we have gardens in the Dooars and Assam. But those planters who are only into Darjeeling tea are facing a lot of problems in getting bank finance this year.” Financial reporting service ICRA concluded the loss of crop adversely impacted overall revenue and financial health of many gardens. Political unrest severely disrupted cash flow and export revenue dropped by 4 percent per kilo. As a result, reported the Economic Times, UCO Bank and Bank of India directed branches not to issue new credit or raise existing limits for loans above $750,000 unless the firm has an “A” rating. “Ratings of many Darjeeling tea companies have been downgraded to BBB from A which makes it difficult to get working capital loans from the banks,” said Sanjay Bansal, chairman of Ambootia Group, the largest Darjeeling tea producer. Minister Banerjee is championing a partnership of state government and the Gorkha Territorial Administration (GTA). Benoy Tamang, who chairs the GTA, said Darjeeling “is a land of abundant natural and human resources.” He said eco-tourism and adventure tourism could attract high-end hotels and that tea remains a great opportunity, but cautioned the unrest needs to be resolved. Sources: Economic Times, Times of India, The Telegraph (Calcutta), The Business Standard