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Abstract : This paper presents a set of suggestions for raising production and export
of tea from Bangladesh. The suggestions include modernisation of tea production,
bringing new areas like Panchagarh and Chittagong under cultivation, production of
organic and herbal tea. Some of these have already begun. This paper makes policy
suggestion to advance these further.
I. Introduction
Tea is a regular export item of Bangladesh. But due to slow growth of production
growing consumption and stiff competition from other tea exporting courtiers, tea
export of the country has declined. Export of tea to different countries by
Bangladesh witnessed substantial changes over time. In order to cope with such
changes, it is necessary to look for new buyers and pursue an aggressive policy in the
world tea market. This paper examines the present position and contains several
suggestions for raising tea export.
Domestic consumption of tea has steadily increased. This trend is likely to remain
and even may gain momentum. In the face of rising domestic consumption, a stable
level of tea export can be maintained only by a sustained increase in tea production.
Various aspects of tea production and export have been dealt with, among others, by
Khalid (1975), Majid (1991) and Sabur (2002).
II. Objectives
The paper aims at:
i) Examination of the present status of production, domestic consumption
and export of tea of the country;
ii) Exploration of the prospect of new areas for tea production; and
iii) Policy measures to increase production and export as well as quality
improvement, and roles to be played by the government and national
bodies.
III. Production
Production of tea in Bangladesh registered steady growth rising from 39.81 million kg
in 1980 to 53.41 million kg in 2001. Many of the tea bushes in Bangladesh are well
over 50 years old. This has resulted in loss of vigor and production. In the past, for
achieving short-term gains, planting efforts were more concentrated on new areas
than on replacements. As a result, the old areas did not receive proper care and
attention. The result has been a sharp fall in the yield from these gardens. Infilling
may be most profitably carried out in tea up to the age of 20-25 years. But infilling of
young tea plants should get priority.
The world production of tea has increased tremendously over the last 50 years. It is
interesting to note that the production increases in the major tea producing
countries have been due to large increase in the yield per hectare. In the nineties,
the yield per hectare in India was around 1500 kg, in Sri Lanka this was 1600 kg and
in Bangladesh it was only 1000 kg. The net outcome has been a relatively high per kg
cost in Bangladesh due to low yield and a consequent unfavorable competitive
position in the world market.
Later on poor quality of Bangladesh tea has turned into a problem. A number of
reasons account for this. First, the standard of leaf plucking is not satisfactory. To
increase production, the producers resort to rough plucking. The second one is the
age-old Orthodox method of processing in the out-modeled factories and machines.
Besides, the presence of high vacancies, poor quality plants, unchecked propagation
of pests and diseases in the tea bushes, absence of shade trees, etc. are some other
constraints to the yield of quality tea in Bangladesh.
Besides, there are too much fallow land in the tea estates. It can be said without
hesitation that even half of the potentiality of the land under tea cultivation has not
been exploited.
India and China are the largest tea consuming countries in the world and the amount
of their consumption was 615.33 and 420.43 million kg in 1996 respectively.
Whereas consumption of tea in Bangladesh was only 25 million kg at the
same time.
Thoughts on Economics 69
Consumption of tea has decreased in the U.k., Ireland Rep., Afghanistan, Pakistan,
Kenya, Australia and New Zeeland in 1999 in comparison to 1995. While in other
countries, consumption has increased at normal degree, but it increased
tremendously in Bangladesh, Turkey and Canada. Increasing rate of consumption
was the highest 49.45% in Bangladesh, while in Turkey and Canada it increased at
43.37% and 30.17% respectively. This high rate of consumption in Bangladesh gives
the opportunity to the tea producers to fetch the captive market with the relative
high prices of the tea of any quality. But in an open economy, good quality and low
price are the main factors for the acceptance of a commodity. That is why
Bangladesh needs to raise production of low priced and high quality tea to meet her
increasing demand and to increase her export of tea.
Table 1
Number of Tea Estates, Area under Tea Cultivation yield
of Bangladesh Tea since 1947-2000
Table 2
Production, Export and Surplus for Domestic Consumption
(Qty in mkg)
Year Production Export Left for Domestic Consumption
1973-74 29.89 21.53 08.36
1974-75 31.28 23.50 07.78
1975-76 31.30 22.33 08.97
1976-77 35.64 29.42 06.22
1977-78 36.35 28.63 07.72
1978-79 36.70 27.10 09.60
1979-80 39.81 23.88 15.93
1980-81 41.90 29.85 12.05
1981-82 38.54 31.32 07.22
1982-83 42.86 30.81 12.05
1983-84 39.46 30.74 08.72
1984-85 42.89 25.85 17.04
1985-86 38.77 29.82 08.95
1986-87 40.36 21.41 18.85
1987-88 41.62 27.56 14.06
1988-89 41.27 25.12 16.15
1989-90 42.56 22.57 19.99
1990-91 44.61 26.45 18.16
1991-92 46.79 23.64 23.15
1992-93 49.30 33.09 16.21
1993-94 51.73 27.42 24.31
1994-95 47.04 26.72 20.32
1995-96 52.14 21.43 30.71
1996-97 52.67 25.39 27.28
1997-98 51.25 24.45 26.80
1998-99 50.26 23.50 26.76
1999-00 50.22 12.61 37.61
2000-01 53.41 16.52 36.89
Source: Bangladesh Tea Board, Statistics on Bangladesh Tea Industry, 2002
Thoughts on Economics 71
selling policy for Bangladesh in order to stabilize this fluctuation. This calls for
holding exhibition of Bangladesh tea abroad and granting special facilities like
confessional shipment rate and tariff to exporter. Bangladesh Tea Board and the
Ministry of Trade and Commerce can design some web pages in Internet jointly or
separately to build up interest for Bangladesh tea in the world market. Seminars,
symposiums and Bangladeshi tea festival may be organized by the Tea Board and the
Bangladesh Parjatan Corporation can also play a vital role in this respect.
Tea plantation in Panchagarh began in 2000 when the Tetulia Tea Company Ltd.
(TTCL) came forward with a plan of a small-scale tea production by the small and the
marginal farmers. Since then, tea plantation has rapidly expanded here. At present,
21 companies have come forward to start tea plantation in Panchagarh with a
prospect of bringing 16,000 hectares of land under cultivation.
X. Organic Tea
Production of organic tea, that is, tea produced naturally without using chemical
fertilizer has begun in Panchagarh. The Kazi and Kazi Company have taken the lead in
this respect. Recently organic production of agricultural products has become very
popular, as these are free from the harmful effects of chemical fertilizer.
Thoughts on Economics 73
So, producing of organic tea in Bangladesh has gained immediate popularity and a
Japanese firm has already bought the whole lot of tea in advance.
Organic tea here is produced in such puritan form that no chemical pesticide is used
and mechanical vehicle is allowed. Only carts driven by cows and horses are allowed
to enter the gardens and processing areas. It appears that organic tea has a great
future here. In the developed world where labour is expensive and use of power
driven machines is common then organic tea production is very expensive. So,
Bangladesh can make dent into the world market of organic tea and Govt. efforts are
needed in this regard.
It appears now that Bangladesh is breaking away from these problems. The new
varieties of fragrant tea, production of organic tea, possibility of producing herbal tea
like clove and ginger-flavoured tea, and citreous tea like lemon tea will at last give
Bangladesh the edge in the international market that it needs.
The high demand for Bangladeshi fragrant tea and the selling out of all organic tea of
Panchagarh in advance and the development of BT-16 indicate that the fall in tea
export can effectively be reversed.
XV. Policy Recommendations
From the above discussion it becomes clear that for expansion of tea production and
its export promotion, the following policy recommendations may be put forward:
i) A determined effort should be made to infill all tea gardens with young
tea plants immediately to increase production of tea.
ii) Rough plucking of green tea leaves is to be avoided for quality
production of tea.
iii) To meet the local demand of low priced quality tea and to increase
export of tea appropriate measures coupled with government initiative
should be undertaken.
iv) Use of modern technology and machine is an imperative to produce
quality tea and to keep the cost lower. Tea producers should be
encouraged to replace Orthodox method gradually.
v) As Bangladesh can make a dent in the world market of organic tea, the
industry may be given due support that it needs and deserves by the
government.
Thoughts on Economics 75
vi) Attempts may be made at the government level to increase export of tea
to Muslim countries through bilateral contract.
vii) The government should play its due role by giving adequate and timely
credit, creating infrastructural facilities and preserving small-scale
production by the small and marginal farmers.
viii) Appropriate weight and importance on research should be given to
produce HYV tea and more new types of herbal tea.
ix) The Ministry of Forestry, the Ministry of Commerce and the Bangladesh
Tea Board, for the successful implementation of bringing new areas
under tea plantation, both in the northeastern and the southeastern part
of Bangladesh may take coordinated approach. This may help poverty
alleviation as the government would like to distribute land among small
farmers in these areas.
x) Seminars, symposium and tea festivals on Bangladesh tea may be
organized abroad by the Bangladesh Tea Board individually and in
collaboration with the Bangladesh Porjoton Corporation.
Conclusion
The suggestions made above, if carefully pursued, can bring about tangible changes
leading to a rise in both production and export of tea from Bangladesh. The
measures that should be followed would give Bangladesh an edge in international
competition.
The success of implementing these suggestions will can for government support in
terms of tax exemption, creation of adequate infrastructure synchronized with an
overall effort to modernize tea production and processing and a greater drive to
increase our tea export.
Reference
1. Bangladesh Tea Board (2005), Monthly Statistical Bulletin.
2. Bangladesh Bureau of Statistics (2004), Statistical Yearbook of Bangladesh.
3. Khalid, A.B.M. (1975), Some Problems of the Tea Industry in Post Liberation
Bangladesh, The Dhaka University Studies, Vol. 23 (Part A), 61-82.
4. Majid, Z. (1991), Sri Lankas Tea Production and Exports During 1970s, South
Asian Studies, Vol. 8, No. 2, 52-63.
5. Sabur, S.A. (2002), Tea Industry in Bangladesh: Marketing System and Price
Behavior, Journal of the Institute of Bankers, Bangladesh, Vol. 49, 20-39.
6. Shabbir, S.M.N.S. (2006), An Economic Analysis of Tea Export of Bangladesh:
unpublished Ph.D. thesis, Rajshahi University, Rajshahi.