Start commercialisation of tea plantation

Govt must announce 10-year tax-free regime for industry, allow duty-free import of raw tea

ISLAMABAD:

Minister for Planning, Development and Special Initiatives Ahsan Iqbal advised the nation to stop taking additional cup of tea as tea being a major import item siphons half a billion dollars every year.

The message got immediate reaction and was highly debated but the fact remains that we have two choices, either to reduce tea consumption or increase home-grown tea production.

After seeing the response of citizens, Iqbal visited the National Tea Research Institute (NTRI) at Shinkiari, Mansehra to see and understand the potential of tea plantation in Pakistan.

He announced that he would follow a comprehensive plan for commercialisation of tea plantation in Pakistan. He also appreciated the prevailing ecological conditions suited for tea plantation and production of high-quality tea.

It was not the first visit by dignitaries to the tea research station as back in the 1990s Nawaz Sharif visited twice and announced the commercialisation of tea on private lands. In 2001, General Pervez Musharraf also visited the NTRI and announced the commercialisation of tea plantation.

Pakistan is among the top tea consuming countries with total imports worth $590 million. The United Nations’ Food and Agricultural Organisation (FAO) reported that Pakistan with per capita consumption of 35.8% from 2007 to 2016 was among the top seven tea consuming countries.

Tea has emerged as a major import commodity, draining a large amount of foreign exchange every year. With a view to attaining self-sufficiency in tea production, the government has approved a tea cluster in the agricultural transformation plan published by the Planning Commission in 2020.

As tea plantation and processing have already proved successful in northern Pakistan, its commercialisation under the market mechanism requires the attention of political and bureaucratic decision-makers.

Though the Pakistan Agricultural Research Council (PARC) has established and maintained a tea research station over 50 acres along with green and black tea processing units with the technical and financial assistance of China at Shinkiari, the private sector has shied away.

A Pak-China team of tea experts tested 64 sites in Hazara and Swat, and identified around 64,000 hectares of land suited for tea planting in Mansehra during the soil survey from 1986 to 1989.

So far, Pakistan has not seen tea on a commercial scale over the past 35 years since the establishment of NTRI and Unilever Tea research stations at Shinkiari.

As tea plantation in Pakistan is socially acceptable, economically viable and environment-friendly, it offers a great deal of opportunities to embark upon.

Major social and economic benefits include job creation for millions of unemployed youth, provision of a healthy and rich drink, and self-sufficiency in tea production, which will not only help in resource mobilisation but will also reduce the huge bill of $590 million spent on tea import annually.

The major issue hampering commercialisation of tea is the unavailability of required quantity of land at one place to establish a tea estate. Land fragmentation due to successive shares in inheritance has reduced private ownership of land to a bare minimum, which is not sufficient for establishing a commercial tea estate.

Apart from other intensive field operations, land clearing and water development may also require financial resources that no one is ready to bear for a crop that may demand investment for the initial five years till the plants bear leaves for plucking at the commercial scale.

Technology including tea processing and blending units need to be imported to initiate tea processing on a commercial scale.

Major tea producing countries like Sri Lanka, Kenya, Indonesia, India and Bangladesh have leased out well-established tea estates, owned by the respective governments, to the private sector for commercialisation. This way these countries have successfully established commercial tea estates.

The way forward for Pakistan may include establishment of a tea cluster already approved by the government in the agricultural transformation plan. Governments of K-P and AJK must identify suitable waste lands for long-term lease to the potential tea growing companies on easy terms.

CPEC can also provide technical and financial support under B2B for the commercialisation of tea. The government of Pakistan as well as K-P and AJK administrations should provide all the required support to the private tea growers.

Apart from other incentives, the government must announce at least a 10-year tax-free regime for the promotion of tea industry, allow duty-free import of raw tea for blending, import of tea machinery and facilitate tea export.

This way, Pakistan may enjoy its home-grown tea on a commercial basis and reduce and ultimately eliminate the huge foreign exchange spending on tea import.

It is quite possible given a huge area suitable for tea plantation with which Pakistan will not only fulfill its own tea requirements but will also export tea of high quality.

The writer is a PhD in Natural Resources Management and served the K-P forest department before joining the civil service

 

Published in The Express Tribune, July 18^th, 2022.

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