The tea industry in Assam, India's top tea-producing state, faces challenges such as rising production costs, stagnant consumption, and subdued prices. Jagjeet Singh Kandal, Country Director for development agency IDH, suggests shifting some tea plantation areas to oil palm crops to address these issues.
Oil palm is a high-revenue agricultural commodity, and reducing tea production could improve demand and prices for the remaining crop. The transition to oil palm would take five to six years, but it could provide farmers with alternative income sources. India currently imports 95% of its palm oil, so domestic production could reduce reliance on imports.
The government is supporting farmers in growing oil palm through the Palm Oil Mission. IDH has also implemented programs in Assam to diversify crop production and connect farmers with markets. The tea industry in Assam has seen a rise in small-scale farmers, contributing to the oversupply of tea.
To address this, the Assam government is considering providing subsidized tea to ration card holders. Additionally, the state aims to bring 3.75 lakh hectares of land under oil palm plantations to reduce dependence on edible oil imports. Despite these efforts, the tea industry in India is expected to experience a decline in revenue this financial year due to lower exports and operating profitability.