value chain/ market analysis of the orthodox tea sub ... - Nepal Trade

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organization also serves as a forum for small tea growers to lobby for supportive policies atthe national level.3.5.3 Government Agencies and projectsMinistries and National Planning Commission (NPC): The Ministry of Agriculture andCooperatives, Ministry of Commerce and Supplies and Ministry of Industry are directly andindirectly involved in providing support to the tea sector and are responsible for formulatingand executing policy at the national level. The National Planning Commission is the centralbody for devising development planning in the tea sector.District Agriculture Development Offices (DADO): DADOs operate under the Departmentof Agriculture of the Ministry of Agriculture and Cooperatives and is functional in all 75districts. DADOs are the main points of reference for activities related to agriculture in anygiven district. Group formation, technical advice to producers, technology demonstrations,and trainings are some of the activities DADOs are involved in.National Tea and Coffee Development Board (NTCDB): The NTCDB was established in1993 under the Tea and Coffee Development Board Act of 1992. Its main objective is toformulate plans and policies for the development of Tea and Coffee at the national level andto strengthen the public, private sectors involved in the Tea and Coffee industry. It has twoRegional Offices and seven Tea Extension projects.Strengthening of Environmental Administration and Management at the local level(SEAM-N): SEAM-N is a project that began in 2001. It is led by the GoN and Finland andone of its primary activities is the production of bio-slurry and converting farms to organic.Commercial Agriculture Alliance (CAA)/Commercial Agriculture Development Project(CADP): CADP manages the Commercial Agriculture Fund (CAF), a cost-sharing grantprogram available to CAA general members to strengthen market-chain activities anddevelop linkages within the market chain. Some tea producer cooperatives and tea factoriesalready have joined CAA, thus becoming eligible to get project proposals approved forimplementation.Trade and Export Promotion Centre (TEPC): The Government of Nepal established a"Trade and Export Promotion Centre" in 2006. TEPC is a national trade promotionorganization with the primary objective of promoting trade. TEPC has been providingsupport to HOTPA/HIMCOOP in trade fairs.3.6 Policy FrameworkThe Government of Nepal has promulgated four policies for the development of the teasector. In 2000, the National Tea Policy 2057 was completed with ambitious targets toachieve within a 10 year period. In orthodox tea, it has planned to increase the operating areaof 30,133 ha, production by 30.13 million and exports by 27.11 million. The National TeaPolicy included several packages for development of the tea sector including exemption onland ceilings, rebates on land registration, and grants to small farmers. However, the TeaPolicy was widely regarded as a failure and its ten year validity has already expired.Value Chain/Market Analysis-Orthodox Tea 26
In 2004, the National Agriculture Policy (2004) was promulgated with an aim of makingagriculture more dynamic and profitable to help reduce poverty and focused on effectiveimplementation of the Agriculture Perspective Plan.The Agriculture Promotion Policy, 2006 was promulgated in 2006 to enhance theparticipation of private sector in the infrastructure development of agriculture market, tradeand agro-based industries in order to diversify, commercialize and promote agriculture sector.In 2009, the government promulgated Commerce Policy 2065. The policy aims to promoteexports of agricultural products. The Commerce Policy also envisaged the establishment ofcoordination among stakeholder agencies of the government and private sectors forimproving the competitive capacity by increasing the production of highly export potentialagricultural products.3.7 Value chain governanceThe trading of orthodox tea is mainly lead by Indian importers because almost 90 percent ofexports go to India. The price is usually determined by Indian importers/agents and is basedon the quality and grade of the product. Payment is mostly in credit. The relationship betweenexporters and importers is quite stable. The Indian importers/agents do not have restrictionson various grades of tea and they purchase all types of grades and price accordingly. At theprocessor level, there is an environment of mistrust between farmers and processors. Most ofthe processors are themselves exporters. Usually, farmers complain of lower prices offeredfor their green leaf whereas processors complain of poor quality leaf. There are also problemswith tea labour because many workers are not satisfied with the wages received and aredemanding an increased wage rate. There are closures of factories and tea gardens due toconflicts between processors and labourers.Usually, farmers sell their leaf to the nearby processors. However, some farmers supply theleaf to other processors if offered a better price. There are also occasions where the farmerssell to CTC processors.Organic production which has been adopted by tea estates including Gorkah, Kanchanjunga,Himalayan, and Shangrila tea estates, the process is little different from the conventional typeand require more human resources and documentation. Total conversion to organic requires aminimum of three years for tea estates. Until the organic certificate is obtained, tea estateswill describe themselves as organic in conversion or under organic conversion. Theinitial step of organic conversion is to familiarize oneself with organic production andimplementation methods. This requires training and strict monitoring of tea fields. If it isfound satisfactory, a local inspector recommends and provides a date for a certifying agent tovisit. The certifying agencies do the inspection of the field every year and at the third yearonly it issues organic certificate provided all their criteria are fulfilled. For the organicproduction, both the farmers and processors need to keep log books and diaries of severalchecks such as that of traceability (e.g. details of suppliers, estimated production, inputsplaced, details of pruning and plucking, quantity supplied, price provided, warehousing,personal hygiene and transportation). Staff members at the factory provide training, ensureproper implementation and conduct data collections. Organic production demands a mutualrelationship and trust between farmers and processors and they usually prepare contractagreements for mutual benefits.Value Chain/Market Analysis-Orthodox Tea 27
Page 1: VALUE CHAIN/ MARKETANALYSIS OF THEO
Page 5 and 6: ACRONYMSANSABAECBIMSTECCooperationC
Page 7 and 8: EXECUTIVE SUMMARYThe Nepal Economic
Page 9 and 10: 1. INTRODUCTION1.1 BackgroundANSAB
Page 11 and 12: 1.4 Study approach and MethodologyT
Page 13 and 14: Figure 2: Production trend of tea f
Page 16 and 17: The low availability of green leaf
Page 18 and 19: Table 1 Impact of organic transitio
Page 21 and 22: 2002/3, 2003/4, and 2004/5 till 200
Page 23 and 24: CountryImportfromWorldWorldimportSh
Page 25 and 26: orthodox tea is consumed domestical
Page 27: 3.2 FunctionsThe major functions in
Page 30 and 31: from Germany are halssen and Lyon G
Page 34 and 35: Green leaf is priced depending upon
Page 36: · Increasing world demandEnabling
Page 39 and 40: · Nepal is highly dependent on Ind
Page 41 and 42: 5. STRATEGIC AREAS FOR NEAT INTERVE
Page 43 and 44: 5.1.2 Processing· Assist in obtain
Page 45 and 46: conducted for its brand establishme
Page 47 and 48: the tea industry. The program shoul
Page 49 and 50: 7. ANNEXESAnnex 1: List of Major Im
Page 51 and 52: B. Those capable of buying up to 5,
Page 53 and 54: Annex 3: Export data of different c
Page 55 and 56: Annex 6: Top Tea Producing Countrie
Page 57 and 58: Annex 8: Types of Orthodox TeaLeaf
Page 59 and 60: Annex 10: Export Data (ITC, 2011)A.
Page 61 and 62: ImportersAnnex 11: Import Data (ITC
Page 63 and 64: ImportersC. Worldwide import of gre
Page 65 and 66: Annex 12: List of PSDM Participants
Page 67 and 68: SNAnnex 14: Orthodox Tea Producing
Page 69 and 70: 26Sagarmatha Tea Estate,Tamrakhop,
Page 71 and 72: Annex 16: Orthodox Tea Sector Cost/
Page 73 and 74: BLong term1 Establishment of traini
Page 75 and 76: Annex 18: Estimated production leve
Page 77: 131415Sakhejung HillRange TeaProces

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