Tea production in Nepal: A bright future

Somnath Lamichhane

Tea is considered to be the most favourable drink for all seasons. With the growing demand, tea production is gradually making its progress both in quantity and quality in Nepal. The recent data shows that the area has been expanded to about 10,000 hectares. According to the feasibility study, the tea plantation is possible in Jhapa, Ilam, Panchthar, Terhathum and Dhankuta districts of east Nepal.

Tea plantation in Nepal began in 1920 BS which has spread to Soktim from Ilam, thanks to Gajaraj Singh Thapa, the then High Command (Badahakim) of Ilam front, who initiated tea plantation in Nepal. Endowed with good taste, quality and market, private tea companies began their leap forward for the plantation. His Majesty’s Government also gave top priority for the development of tea plantation. Accordingly, the government established Nepal Tea Development Corporation and entrepreneurs in the private sector also began their career as tea entrepreneurs. Before the establishment of government owned Nepal Tea Development Corporation incorporating seven different tea estates, the private established five different tea estates; namely, Budhakaran (Rangiyadanda), Giribandhu (Buttabari), Himalaya (Damak), Sattighatta (Sattighatta) and Mittal tea estate Baniyani) are now the biggest and renowned tea estates in Jhapa district.

The state-owned corporation occupies some 1650 hectares of land distributed in 7 tea estates. Among them, four estates are in Ilam and three in Jhapa districts. The Corporation had produced some 13,00,000 kg Orthodox and CTC tea annually at the time of full scale operation but now its production has declined to some 3,00,000 - 4,00,000 kg per annum. The Corporation has come under huge loss in production due to over-staffing, mismanagement, political interference and so on. Owing to this, the government is in the process of declaring privatization.

Both the public and private sectors have established their own tea processing units. Now, plantation and investment in tea has gone up to hundreds of million rupees. There are 12 processing factories in Jhapa, three in Ilam, one in Panchthar and one in Dhankuta district while four more are under construction in Jhapa district.

The eastern region of Nepal is firmly heading towards new way of industrialization both in commodity goods production and agro-based industry. Private entrepreneurs are sharply inclined for tea plantation which is visible even in remote areas of Jhapa, Ilam, Panchthar and Dhankuta district. A very small area of hundred ropani is enough for tea plantation. The Agriculture Development Bank and other financial institutions have also given top priority for tea plantation and production. The government has also provided a soft loan scheme (with 12% interest) in agro-based industrial sector. It is found that tea farmers are returning loan within five years whereas other farmers have difficulty in returning loan taken for cereal and livestock items.

Market potential
Nepalese entrepreneurs are struggling very hard for better access to the developed country for marketing their best tea items. Mostly, the Orthodox tea, produced best in hilly region, is exported to the European countries like Germany, Britain, France, and Japan. There is large demand of Orthodox tea mostly in European countries which have helped for better earning of foreign currency, creating new jobs and better utilisation of marginal land in hilly region. In addition, CTC tea has the most effective local market available. In Nepal, tea production is about 7 million kg per year while the country needs 8.5 million kg per year. Nepalese tea growers produce mostly Orthodox Tea, Green Tea, Crush Tea and Curl (CTC) tea. The private sector is demanding the government to further facilitate for tea production, market management and export potentials.

Social Impact
Tea plantation in remote areas of Jhapa and Ilam districts have created social problem to some extent. People, who occupy very small farmland, are migrating in different places. And, it is found in some village development committees of Jhapa district that the migration has affected the social, political and economical scenario. A recent data published by District Agriculture Development Office Jhapa claims that 5000 hectares of rice cultivated area is converted under tea plantation area within a period of 3-4 years. As a result, the migration is moving quickly which may generate public chaos and disorder in the near future in terai region.  The government has to work immediately to locate and prioritise the tea plantation area. Experts suggests that the tea plantation should be extended only in the marginal land instead of rice farmland.

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