completed· Health

Capacity Building of Tea Farmers’ Organizations and Technology Delivery

Project background Nepal has a long history of Tea cultivation, initiated with the establishment of Ilam Tea Estate in the Hills of Ilam District in 1863 and Soktim Tea Estate. Tea is widely cultivated in the eastern hilly regions. Major tea producing districts are Jhapa, Ilam, Panchthar, Dhankuta and Terathum. Tea is one of the main cash crops in the hilly districts in Mechi zone contributing to rural and national economics and to alleviating poverty through income and employment generation. Orthodox tea, which is produced at altitudes between 3000 - 7000 ft are famous for its aroma, bright liquor and subtle, slight fruity flavor, which are mostly sought attributes by the consumers of overseas countries. Orthodox Tea is a high value, flavor intensive perennial crop with a potential for generating foreign exchange, reducing rural poverty, promoting economic growth and improving ecology and environment. The total land area under orthodox tea plantation is around 14,000 hectares; this industry consists of more than 35 tea states, around 18,000 small orthodox tea farmers and about 17 tea-processing factories (source: HOTPA). Currently Nepal is producing more than 1.7 million kg of Orthodox tea of which small farmers' contribution amounts to 67.8% (Baseline GTZ, 1997). 2.2 million kg of Orthodox tea is produced in a year 2010(source: HOTPA, 2010). Now Farmer's contribution is more than 85% in production and more than 95% is being exported. More than 90% of orthodox tea is exported to India and overseas countries and the rest is partially used for consumption and partially for blending purpose in black tea to impart good flavor. There are 14 mini processing factories operated by individual tea farmers and cooperatives which produce very nominal quantity but in the future its scope of operation will be increased due to interest of all cooperatives to establish such small factory so that they can produce tea by themselves without depending on factory. Due to the growing demand of Organic tea in the international market there is a realization of converting factories and garden of individual farmers into organic by certifying in a group and there are 3 factories and 7 groups already certified by NASA. As the international certification is expensive Code of Conduct for tea produced in Nepal is envisioned in a year 2003, which is owned by Himalayan Orthodox Tea Procedures’ Association (HOTPA) and jointly implemented by HOTPA and TEASEC with support from Tea Alliance, which regulates the production, processing and marketing of tea in Nepal with due consideration for ecological, social and economic dimensions. CoC implementation is at the primitive stage especially at the tea farmer’s level and need more promotion, education, and ultimately economic benefit to them. Now more farmers are attracted towards CoC tea due to the reason that the Internal Control System adopted in CoC has helped the farmers to also get Organic certification within very less time frame. Rationale In the previous phase program intervention with support from Agriterra and SNV, TEASEC has facilitate in establishing 49 cooperatives with 2,859 members and provided them with the services to build their capacity to manage their business. They were provided trainings on cooperative management and accounting. Business plans of all 48 cooperatives have been prepared. Now there are four district level cooperative federations in all program districts and Central Tea Cooperative Federation (CTCF) which is an umbrella organisation representing four district cooperative federations and is recently established. All cooperatives are now actively operating with regular savings and credit from their members, they are maintaining four ledger accounting system and few cooperatives have involved in selling green leaf to the factory with regular collection from their members. Cooperative federation in the district is now supporting cooperatives in delivering services with support by TEASEC Social Mobilizers. 15 cooperatives have submitted proposal to the Commercial Agricultural Alliance (CAA), a project implemented by the World Bank and 7 have received funds which has been utilized to invest in developing infrastructure in the tea sector. There are 1,200 tea farmers who are still not associated with the cooperatives or farmer’s groups. So the number of cooperatives is likely to increase in the future. These tea farmer’s will be further counselled and provided with services from the TEASEC. Very few female members (2%) are in the cooperatives and in the decision making positions. District cooperative federations do not have sufficient human resources to work in a full time basis. Social Mobilizers will thus be stained at District Federation office to maintain database of tea sector and by 2013 they will be permanently stationed there. There are existing 15 mini processing units which operate in areas where there is difficulty in transporting green leaf to the big tea factory. There are many such remote places where tea is grown in scattered pocket areas and so need to expand with more mini processing factories in the future. There is a growing demand and every tea farmer’s choice to certify their tea garden into organic certification. For certifying with organic it requires minimum of 3 years after complying with ICS. But Himilayan Sangrila has certified with organic by NASA within 2 years along with 2 cooperatives and 1 farmer’s group as a sub licensee. This has been possible due to the reason that they were previously certified with CoC and complying ICS. This means CoC standard is a stepping stone towards organic certification. Similarly, this trend is going to continue as Gorkha factory which is already complying CoC is going for certifying with Organic along with Eco and Sundarpani cooperatives. Monitoring of regular tea sector indicators is another aspect which is completely missing. TEASEC will have to take a lead in facilitating to regularly keeping the database of all major tea indicators as there is now a permanent reporting structure from individual farmers to Central Tea Cooperative Federation. Capacity of Social Mobilizers will be enhanced to keep tracking of information. The key points are summarized below to justify the need of program: - Government of Nepal, Ministry of Agriculture, and Cooperative has published “organic guideline” for certification of organic agriculture products. - HOTPA, an association of tea factory has a vision of converting all orthodox tea garden of Nepal into organic by the year 2012. Tea being exportable product to EU, Japan and those countries has regulation and pesticides band. - Major buyers from German (Mr. Thomas Holz) and America have already requested to provide them organic tea due to the reason that if any consignment is detected with pesticides than the whole industry may be collapsed. - Almost all chemical fertilizer used in Nepal is imported from India and other third country. Going into organic will stop importing fertilizer and save from losing foreign exchange. - In neighboring country India at Darjeeling are already in the process of converting their tea garden into organic. Darjeeling tea is looked as a competitor. - Organic market of orthodox tea is increasing in the positive trend. - European buyers are demanding tea that complies with the CSR standard and CoC covers those aspects of standard. - Approximately 95 % of orthodox tea is exported to Europe, Japan, America and India that reveals that market of organic orthodox tea is increasing in the positive trend. - Farmer cooperatives and its federations are instrumental to lobby and advocacy with the government and other donors that will ultimately increase bargaining power of the smallholder farmers. - 14 mini processing has already been established by the Individual farmers and cooperatives and this will continue to grow in the future. TEASEC will provide necessary services to