The Existential Crisis of Darjeeling Tea

January 13, 2019

By Sourya Majumder

By Sourya Majumder

‘Worker absenteeism’ or ‘absentee landlords’: what is ailing Darjeeling tea?

The Peshok and Dhotre tea gardens, shut down by Trinamool MP-owner K D Singh two years earlier, are being revived and run by workers themselves. Could this be the way out for an industry in decline?

Darjeeling tea faces an ‘existential crisis.’ That is what plantation owners have been claiming, ever since the industry came to a standstill in 2017 during an agitation demanding separate statehood for Gorkhaland. But workers in two ‘sick,’ or closed, tea plantations in the district believe that the sector’s ailments are much older.

As per plantation owners’ lobby Darjeeling Tea Association, a complete labour shutdown during leaf-picking season for four months in 2017, worker ‘absenteeism’ on the rise since the introduction of the National Rural Employment Generation Scheme (NREGS), and a downgraded credit rating by banks are to be blamed for a reported 67 per cent fall in tea production last year.

However, workers in Peshok and Dhotre tea gardens point at a history of financial mismanagement and diversion of industrial credit from the sector, with the Government of West Bengal looking the other way. They also hint at a possible solution.

In April 2018, these women (who constitute the majority of employees) and men took over the two tea gardens. Since then, their wages have more than doubled and preparations are on for the next ‘first flush’ leaf-picking season beginning in end-January. Should the plantations’ management not release wages due to them by then—allegedly a backlog of almost three years to the tune of approximately ₹nine crore (including benefits and gratuities)—the workers have also drawn up plans to revive the gardens’ productivity, which has dipped to precipitous lows in recent years after being ignored by successive ‘absentee’ owners for decades.

Variables and constants

The history of Peshok and Dhotre tea gardens bear parallels with that of the Indian political economy since 1947. Indraman Gurung, a worker in Peshok for over forty years, recounted how this estate used to be the landholding of a Ram Deen Rai when he started working in the plantation as an adolescent. In 1976, on the brink of insolvency, it was seized by the government and handed over to Tea Trading Corporation of India, a public sector company. After working under this arrangement for almost two decades, the government withdrew, leaving its employees to suffer through a complete shutdown for the next twelve years, that reduced them to, what Gurung described as, ‘famine-like’ conditions. It was only in 2006, with the entry of the Alchemist Group, a private conglomerate then headed by Trinamool Congress billionaire-lawmaker in the Rajya Sabha Kanwar Deep Singh, when a modicum of stability returned to workers’ lives—a fragile peace that would not last more than a decade.

The current generation of workers in neighbouring Dhotre had never seen such severe deprivation earlier, says Ashish Lama, a resident of the area. The shutdown in May 2017 that lasted over a year (that is, till the workers took charge themselves) forced a majority of residents, close to 70 per cent of those employed, to leave in search of employment in metropolises. Older permanent workers were reduced to precarious employment in nearby estates on contract. Lama believes that most of his neighbours would prefer to return but are unsure of stable employment in the sector.

Between 2004 and August 2016, the Alchemist Group had acquired approximately 2,075 hectares in Darjeeling district—this included 995.23 hectares of plantation land along with a factory to process and package tea leaves, divided into Peshok, Dooteriah (now, Dhotre) and Kalej Valley tea estates—employing 2,544 permanent workers and around 800 on contract.

The group’s then-chairperson K D Singh ran into troubled waters in 2013 when news broke of several ‘chit funds’ associated with individuals close to the Trinamool Congress, the ruling party in West Bengal, going belly-up. Funds collected from small depositors by groups such as Singh’s, making promises of multiplying investments, were found to have been squandered by their promoters on vacuous deals. (As an aside, Singh is also the majority stakeholder in Anant Media Private Limited which brings out the investigative fortnightly Tehelka.) Within a year of this exposé, workers allege, payment of wages, benefits and gratuities in the tea gardens ground to a halt.

If the Securities and Exchange Board of India (SEBI) is to be believed, Singh is currently in the process of ‘siphoning off’ his wealth to a holding company in Cyprus, a known tax haven in Greece, and leaving the country. Meanwhile, in 2016, the Peshok and Dhotre plantations changed hands and went to Trident Agrocom Exports Private Limited (hereafter, Trident), a Mumbai-based company incorporated in May 2015, just over a year before the handover. As per the Gorkha Janmukti Morcha, a regional contender to Singh’s political party, this firm had scant experience in the sector and was controlled by an individual close to Singh. Workers claim that its CEO, Alok Aggarwal, had allegedly earlier been an investor in the Alchemist Group. 

While enthused workers resumed operations on the promise of dues being released in installments, Trident too withdrew within a few months of taking over without fulfilling its obligations. Next came Fortune Chemicals Limited, a 28-year-old trading and export firm registered in Ahmedabad, Gujarat.

Interestingly, publicly accessible documents from the Ministry of Corporate Affairs reveal that three individuals—Avanish Kumar Singh, Prakash Ram Rawal and Kamlesh Rajendra Prasad Pandey—are listed on the boards of both Trident and its successor

Trouble arose once again within a few months of Fortune Chemicals Limited taking over—workers allege that it failed to clear the dues inherited from its predecessor and by May 2017, on the pretext of losses suffered during the Gorkhaland agitations, had stopped paying wages altogether. When the matter went before the District Magistrate, Darjeeling, the plantation owners were held up for not having renewed their leases on these gardens since 1987. Documents submitted by Fortune Chemicals Limited as proof of ownership were rejected—neither labour representatives nor government officials had been present when the alleged ‘handover’ between the Alchemist Group and Trident had taken place. Fortune Chemicals Limited was asked to begin registration procedures anew.

Sending deputations to the Assistant Labour Commissioner, Darjeeling and Joint Labour Commissioner, Siliguri to intervene on behalf of the now-unemployed workers, and entering into formal correspondence with the Registrar of Cooperative Societies to work out an alternative ownership structure went nowhere. This led the workers to take over the plantations’ operations in April 2018.

When workers rule

Margaret’s Hope Tea Garden, an hour and a half away from Peshok and Dhotre, was the site of the first organized labour struggle by tea plantation workers in West Bengal. On 26 June 1955, six workers (including a pregnant woman and a 14-year-old) were shot dead by the police in this plantation to quell an uprising against its management for a practice known as hattabahar—firing workers at the slightest provocation and making them unemployable throughout the region. It was this struggle, led by the then-undivided Communist Party of India, which led to the institution of paid leaves, maternity benefits and payment of annual bonus in tea gardens in the area.

In A Concise History of the Darjeeling District Since 1835, an Englishman named E C Dozey records 1841 as the year when tea seeds imported from China were introduced in the Darjeeling hills by the British East India Company. But it would not be until 1862 that tea would make its way to Dhotre (then, Dooteria), at a recorded outlay of ₹eight lakh. Dozey notes that the plantation was auctioned off within a year to a doctor in Calcutta (now, Kolkata) for a mere ₹20,000. In the 19th century, a plantation’s viability was largely decided by the labour available locally. For this, it had to compete with the Gurkha (now, Gorkha) Regiment of the British Indian Army.

Today, plantation owners claim that it is out-migration from the region which is to be blamed for the sector’s woes. But does this explanation paper over deeper problems? Those related to the way in which a plantation’s ownership has been structured since colonial times and the incentives in place for owners to sustain garden productivity in the long run? Going by recent developments, it indeed appears to be so. Rising worker ‘absenteeism’ seems to have deeper, structural underpinnings.

The Peshok and Dhotre plantations are now being managed by workers’ committees. In Peshok, such a committee consists of 34 workers with representation from both the upper and lower divisions. In Dhotre,each of its four divisions has delegated about ten representatives each.

Rajen Gurung, a tea garden worker in Peshok for almost four decades now, is now treasurer of such a committee. He claims that though the sector remains profitable, it is being weighed down by the diversion of credit raised in the name of tea gardens to other verticals under the conglomerates who own these tea gardens. Sharan Rai, president of the Peshok Tea Garden Workers’ Committee, asks, ‘Loss kaise hota hai aise garden mei?(How can such a garden run into losses?)’ He argues that if five kilograms of green leaves purchased at roughly ₹250 from workers produces a kilogram of black tea which sells in the range of ₹800-1,000 in the domestic market alone, it is unlikely that prudent management could result in loss-making plantations. 

Last October, these worker-run gardens were able to distribute the highest Tihar festival bonus among the 87 plantations in the Himalayan region—15.5 per cent of profits in Dhotre and 13.75 per cent in Peshok—despite having a shorter plucking season and missing the most profitable ‘first flush’ pickings altogether.

As per committee members this writer spoke to, they did so by plucking green tea leaves and selling to the Lopchu tea estate nearby for processing as their own factory was ‘locked out.’ With limited bushes in shape for picking, leaf pickers working for three hours a day made between ₹300 and ₹400, based on quantity of pickings. Most approached NREGS for work during the rest of their time. To put this in perspective, workers in most plantations in the region were being paid a minimum wage of ₹132.50 at the time for labouring eight hours a day. (In August this year, nearly three lakh tea garden workers in Darjeeling and the Terai went on strike to increase this amount to ₹176.)

Of the ₹50 received by the workers’ committees for each kilogram of green leaf sold, ₹30-35 would be taken by tea pickers and the rest put aside for expenditure on transportation, plantation of new bushes, bonuses, and the committees’ upkeep.

In Peshok, the committee was also able to release provident funds owed to eight retired employees. In a first, this was achieved through collective pressure by the workers on the regional labour office instead of the customary ‘commissions,’ that is, bribes paid to middle level managerial employees to do so on their behalf. 

After a successful picking season overseen by workers themselves, members of the workers’ committees claim that negotiations were initiated to release all arrears and receive proof of security from the owners before returning to the way things were run. However, these have been stalled for the time being until the leases of these gardens are renewed by Fortune Chemicals Limited following the District Magistrate’s directions.

And if such negotiations were to fail? Committee president Rai outlines plans for such a contingency: the workers would then approach the Block Development Officer to issue NREGS ‘job cards’ to all plantation employees and aid the formation of a cooperative. Should such assistance arrive, the committee is confident of being able to plan and execute the revival of the plantation’s productivity and sustain its operations in the future. Rai says, ‘Ab maalik aaye, na aaye, hum garden chalayenge. Aur behtar chalayenge. (Whether the plantation owner returns or not, we will continue production. And we will manage it better.)’

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In response to questions sent to Fortune Chemicals Limited over e-mail regarding its ownership structure and performance record, the company sent the points reproduced below (edited for clarity):

1. ‘We, Fortune Chemicals Ltd, are a 28-year-old company who have won the rights over the Dooteriah-Kallej Valley tea gardens through the honourable NCLT [National Company Law Tribunal] court, Union of India, who has, after thorough due diligence of our promoters, company and background, satisfactorily awarded us the rights of the company Dooteriah-Kallej Valley [Tea Estates Private Limited].’ 

2. ‘We have written to the respected DM [District Magistrate] Darjeeling intimating her about the NCLT transfer of the gardens in our favour along with relevant documents. Our CEO Ms Sonal Loharikar visited Darjeeling in October 2018 and had detailed discussion about [with] trade unions and labour unions on way forward to revive the gardens and we are on [in] advance stages of negotiation for successful implementation.’

3. ‘Fortune Chemicals Ltd is a 28 year [old] company with absolute clean track record.’

4. ‘Trident Agrocom [Private Limited] had an agreement with old owners of the Dooteriah-Kallej Valley Tea Estates Pvt Ltd. In August 2016, however, due to Alchemist not performing the terms of the agreement Trident Agrocom revoked the agreement and opted out.’

5. ‘After that, one old creditor of  Dooteriah-Kallej Valley Tea Estates Pvt Ltd having outstanding [presumably, dues] since 2014 , dragged the company for bankruptcy and liquidation to honourable NCLT comprising of Justice Bench in December 2017.’

6. ‘The company was taken under control of NCLT and the Government of India appointed their nominated  professional who ran the company for six months, did all investigation and put up notice in newspaper for sale of the company.’

7. ‘Fortune Chemicals Ltd was one of the application [presumably, applicants] to the Government of India for takeover of the Dooteriah-Kallej Valley Tea Estates Pvt Ltd, amongst several others.’

8. ‘The NCLT, Government of India, selected after thorough due diligence Fortune Chemicals Limited as a successful resolutional application and ordered to transfer the ownership rights of the company [to it].’

9. ‘Fortune Chemicals is in process of opening the gardens and running the same from 2019.’

10. ‘Trident Agrocom was in charge of gardens from September 2016 to November 2017 (till NCLT took over) and all salaries, wages, PF [provident fund] for the period September 2016 to October 2017 was paid and cleared by them.’

‘Beyond that all charges and allegations are baseless and out of context.’

Sourya Majumder is an independent researcher and one of the authors of Loose Pages: Court Cases That Could Have Shaken India.