Unfolding Crisis in Assam's Tea Plantations

Employment and Occupational Mobility

Deepak K. Mishra, Vandana Upadhyay, Atul Sarma

• Publisher: Routledge India
• Year: 2014
• ISBN:
  9781317809326
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

As the Indian economy integrates into global circuits of production, exchange and accumulation, the burdens of adjustment are shared unequally by different sectors, classes and regions. This study unravels the livelihood strategies and living conditions of labour in the tea gardens of Assam. The tea sector has been undergoing a crisis since the 1990s, with stagnant production, decline in exports, and closures of many tea gardens leading to large-scale retrenchments in the labour force.

Based on a detailed analysis of secondary data and primary field research, the study examines the extent, types and implications of inter-generational occupational mobility (or immobility) among tea garden labourers in Assam. In the process, it reflects on how even a sector that had brought capital and labour from outside and contributed significantly to the country's export earnings failed to create dynamic growth linkages within the local economy. The experience of the labour force in the Assam tea sector, the authors argue, is important for making sense not only of the development dynamics of the region, but of the contradictory ways in which forces of globalisation and neo-liberal reforms have been reshaping the worlds of labourers in the margins.

The book will be of interest to students and scholars of labour studies, development studies, management studies, and studies of north-east India, as well as to policy-makers and those in the tea industry.

1

Introduction

The tea industry occupies a significant position in the history of the development of the Indian economy in terms of its contribution in exports, income and employment. The tea sector is said to be undergoing a crisis since the early 1990s. This crisis in the tea industry is manifested through stagnation in production, decline in exports and closure of tea gardens. Although its linkage to the opening up of the economy has been widely commented upon, at the root of the crisis lies low productivity in the tea sector. There is a growing body of opinion that argues that high labour costs — a result of state regulations to ensure some security to workers — are the root cause of the failure of the Indian tea industry to be competitive in both the global and domestic market. As tea estates are being closed down and labour is being retrenched to cut down costs, tea garden labourers are facing a crisis of livelihood. For a number of reasons, it is difficult for them to move out of the gardens and find alternative sources of livelihoods. Their story is among many such contradictions that remain at the margins of the narratives of a globalising and ‘shining’ India.

India’s recent growth performance is widely credited to the bold steps that were taken to deregulate and liberalise the economy with the reforms initiated in 1991. While the overall growth of the economy has fuelled considerable optimism within and outside the country, India’s agriculture sector has failed to grow at an appreciable rate. In fact, productivity growth in agriculture has decelerated since the 1990s, leading to an agrarian crisis in many of the poorer regions of India. The informal sector that provides employment to nearly 90 per cent of the workers has also been showing signs of continuing distress in this period of rapid economic growth. Nearly 70 per cent of those who depend on the informal sector have been estimated to be poor. There are indications that as the Indian economy integrates further into the global circuits of production, exchange and accumulation, the burden of adjustments is being disproportionately shared by small and marginal farmers, agricultural labourers and workers in the urban informal sector. This study, though focused on a much narrower question, attempts to understand the work conditions in Assam’s tea plantations that share the characteristics of both agriculture and industry. Although the tea sector is officially part of the organised sector, informalisation and casualisation of labour have been among the key dimensions of the recent changes in this sector.

Historically, the plantation economies in general and the tea sector in particular have been associated with bondage and indenture labour systems, implying varying degrees of unfreedom for the labourers. Notwithstanding the state-initiated efforts to safeguard the constitutionally guaranteed minimal rights to the workers, reorganisation of the sector in response to changing market conditions and near-complete unionisation of the workers in this sector, there seems to be limited mobility of tea garden workers (or ex-tea garden workers) or their descendants in terms of diversification of sources of earnings and employment. There seems to be a considerable degree of ‘crowding in’ of tea garden workers and their families in the tea sector itself. In the context of rapid and increasing mobility of workers across sectors and spaces, a process that has gained further momentum with increasing global integration of economies, the apparent intergenerational immobility of tea garden labourers is an important and, to some extent, intriguing question that deserves detailed research attention.

This study is an attempt to investigate some important dimensions of labour market characteristics in the tea sector. Although it is a study of the tea sector during a period of crisis, it is not an investigation into the possible causes of the crisis. The focus is on the labour market and the implications of the ongoing crisis and restructuring of the sector for the tea garden labourers and their families. While investigating the changes in the gardens through the prism of labour relations and employment conditions in the tea gardens, the study raises several questions that have significance, we believe, beyond the spatio-temporal context. It reveals the way forces of globalisation and neo-liberal reforms have been reshaping the world of work of the labourers at the margins, at the same time we have not followed a standard comparison between pre- and post-reform periods. The issues that we have investigated here — labour relations, occupational mobility, livelihoods diversification and intergenerational changes — go beyond the changes that have taken place in the recent past. Without explicitly going into a historical analysis of the way labour relations have evolved in the gardens, we have attempted to understand and contextualise the changes in conditions of work in relation to the specific forms of labour organisation in gardens, which of course have been shaped, to an extent, by the historical specificities of the tea sector in Assam. In particular, we focus on the following questions. What is the extent of intergenerational mobility and occupational diversification among the tea garden labourers? What is the nature, direction and pattern of occupational diversification, if any? Is it distress-induced or a response to newer and better opportunities? If there is little diversification and most of the workers and their descendants are ‘crowding in’ in the tea sector itself, is the immobility at the tea-sector level or are the workers tied to specific tea gardens and employers? Is occupational immobility associated with any mobility in the income ladder or not? What are the underlying causes of the relative immobility or diversification of occupations at the household level? What are the implications of all these for the households’ survival and well-being? And, finally, what are the policy implications of these developments?

The Tea Industry in India

Tea is India’s oldest industry in the organised manufacturing sector. It has continued to maintain its position as the single largest employer in this sector. One out of seven workers in organised manufacturing is a tea plantation worker. India is the largest producer of tea in the world, producing around 790 million kg annually (Tea Board 2004). Around 30 per cent of global tea production is produced in India. India is also the world’s largest consumer of tea. Among the four largest tea producers in the world, viz. India, Bangladesh, Sri Lanka and Kenya, India exports the lowest amount of tea.

The tea industry in India began with the founding of the Assam Company in 1839, although the potential for growing tea was discovered earlier, in 1824, by Major Robert Bruce when he came across indigenous tea bushes in Assam (ITA 1933 cited in Bhowmik 1981). Since then, the industry has seen continuous expansion and consolidation during the colonial period. At present, the four major tea producing states in the country are Assam, West Bengal, Tamil Nadu and Kerala. Today, Assam produces around 52 per cent of the total tea produced in India and employs around 56 per cent of the labour force working in this sector (Tea Board 2004). Among the different districts of Assam, Dibrugarh alone accounts for 34 per cent of the total tea produced in the state, while around 26 per cent of the total production comes from Sivasagar district.

The tea industry in India is said to be facing a severe crisis, particularly after the disintegration of the Soviet Union, the largest importer of Indian tea. However, over the past decade, domestic consumption of tea has increased at a faster rate than production — at a steady rate of around 15 to 20 million kg annually. The steady increase in domestic demand and the inability of the tea sector to enhance production has resulted in a decline in tea exports. The decision of the government to allow cheaper tea imports from Bangladesh and Sri Lanka, according to tea producers, has only deepened the crisis (Bhowmik 2002).

While low labour productivity is frequently cited as the main reason behind the crisis faced by the sector, other variables such as inability to expand the area under cultivation, ageing of the tea bushes,¹ inadequate replanting of bushes, inadequate investments in plant modernisation and labour welfare measures,² and traditional, cost-ineffective management practices have also contributed towards the near-stagnation of production (Sivaram 2000; Bhowmik 2002). The present study attempts to investigate the trends in production, productivity and employment in the tea sector, particularly in Assam. As a backdrop to the analysis we describe the broader context in which these changes have occurred.

Labour and Globalisation

Globalisation, as a process of economic and non-economic restructuring, involves increasing economic integration among national economies.³ Several dimensions of globalisation have been noted in the literature⁴ (Beck 2000; Helleiner 2000). Globalisation has been distinguished in terms of its three different manifestations:

[F]irst, the multiplication and intensification of economic, political, social, and cultural linkages among people, organizations and countries at the world level; second, the tendency towards the universal application of economic, institutional, legal, political, and cultural practices; and third, the emergence of significant spillovers from the behaviour of individuals and societies to the rest of the world. (von Braun and Diaz-Bonilla 2008: 4–5).

In some of these formulations, globalisation has been conceptualised as a process of fundamental restructuring of the global economy in historically unprecedented, irreversible ways (Skonieczny 2010). Many authors have, however, questioned this conceptualisation of globalisation as a historically unique process of change. They have attempted to show that in its essence, globalisation represents a relatively advanced phase of capitalism, which has strong historical connections (Hirst 1997; Sweezy 1997). Of course, many new developments of the global economy have impacted the global political economy in diverse ways, but these changes have been analysed with reference to the historical context under which capitalism has developed and has consolidated its position across the world. By its very nature, capitalism is an expanding system. It has transformed non-capitalist forms of production and distribution across the world. In its attempt to bring newer spaces under the overarching logic of capitalist production it has been reaching out to new areas as well as newer aspects of life and livelihoods.

While acknowledging that most pre-capitalist economic formations exhibited elements of commodity exchange to one degree or another, he argued that capitalism differentiates itself as a fully operational commodity system by virtue of two interdependent processes having reached a critical stage of development: a ‘stretching’ of commodity relations in both a territorial and quantitative sense to the point where production for a regional or national market displaces subsistence production as the primary form; and a ‘deepening’ of commodity relations in the sense that these now encompass not only goods and services but also labour power itself (Lysandrou 2005: 774).

International flow of goods, services and capital has been one of the most remarkable aspects of capitalist growth in the 19th century. Some authors, in this context, have attempted to argue that it was the post-war decades which saw the rise of protectionist trade regimes and Keynesian macroeconomic management of national economies which were an exception. Otherwise, international trade and trans-border movement of capital have always been an integral part of the capitalist system. In the renewed emphasis on trade and trans-border economic flows since the 1990s they see a necessary connection between the pre-second world economic order and the post-Soviet world economic order.

[I]t is worth recognizing that the recent splurge in globalization is part of an ongoing process with a long history. To begin with, capitalism was born in the process of creating a world market, and the long waves of growth in the core capitalist countries were associated with centuries-long spread by conquest and economic penetration. In the past as in the present, competitive pressures, the incessant need for capital to keep on accumulating, and the advantages of controlling raw material sources have spurred business enterprise to reach beyond its national borders. The tempo and nature of expansion has of course varied over time… (Magdoff 2002: 278).

Notwithstanding the historical connections with the past, this phase of capitalist world order had its own specific features. The scale of international flow of commodities, services and capital, the phenomenal improvement in transport and communication technologies, the rise of telecommunications and information and communications technologies (ICTs), and the significant rise of financial capital are all features of contemporary global capitalism that bring to it new dimensions. The emergence of the New World Order, after the demise of the Soviet Union, has led to changes in the political and economic management in such a way that capitalist market economies, combined with liberal democracy, are celebrated as the only viable and desirable form of political and economic organisation. The last decades of the 20th century were marked by an unprecedented ascendance of neo-liberal ideas. There were attacks on labour rights of various kinds and all the variants of social democracy that had emerged across advanced capitalist countries initiated sweeping reforms. Summarising the implications of these developments in the developed world, Andrew Glyn (2006: 49) notes:

Complementing the turn to financial austerity, the degree of government intervention in the dominant market sector of the economy has been drastically cut through privatization and latterly reductions in a wide range of product market regulations. Finally there has been a forceful campaign from the international organizations in favour of freeing up market forces in the labour market by cutting unemployment benefits, minimum wages and employment protection, the hard-won gains of the 1960s and 1970s.

Under the competitive pressure of globally mobile capital, and under the influence of global financial institutions like World Bank and the International Monetary Fund (IMF), third world countries started adopting measures that catered to the demands of capital. In order to emerge as, or remain, an attractive destination for capital, domestic deregulation and trade liberalisation policies were adopted by many developing countries across the board. Critics point out that these macroeconomic policies pursued across the developing world have led to deflationary pressures and have resulted in the erosion of capacities of national governments to intervene to pursue independent macroeconomic policies. This does not necessarily mean ‘end of geography’ or ‘end of the nation-state’ (Scholte 1997).

Borders still matter for most activities as they did in the past, and the different social and cultural profiles of countries still leave their imprint on the organisational forms of activities as they have always done. What is different today, however, is that the majority of activities, regardless of where or how they continue to be executed, are now constrained in one way or another by the same financial parameters established by the world’s capital markets. Although unusual since without historical precedent, the financialisation of the global economy and the homogenisation of priorities is entirely in keeping with capitalism’s 500-year history as a commodity system and essentially represents nothing other than a new, defining stage in that history. (Lysandrou 2005: 793)

While at times there has been an over-emphasis on the dichotomy between state and market, careful scrutiny of third world experiences suggests that neo-liberal economic policy has resulted in the reconfiguration of the ‘developmental state’ as a partisan guardian of corporatist interests. States have intervened very strongly in favour of market forces, often used as a euphemism for big capital even while withdrawing crucial supports to labour and other marginalised sections. The state-versus-market debate has often over-simplified the range of policies that states have pursued to push forward the logic of neo-liberal economic governance.

The changes in production organisation in the age of globally mobile capital have raised newer issues for labour studies (Huws 2006). As against the older Fordist production organisations, the post-Fordist regimes went in for flexible specialisation, with an emphasis on a lean production base that enabled international mobility at an unprecedented scale. Searching for cheapest labour, raw materials, markets, low tax and less stringent environmental regulations, capital could acquire a degree of mobility that was unprecedented. The rise of white collar employment, development of information technology (IT) and IT-enabled services and global integration facilitated this transnational mobility of capital. Although critics have questioned the extent of this mobility and its capacity to transform production conditions across the Third World, nevertheless this capacity to look for cheap labour within and beyond borders has resulted in significant erosion of the bargaining power of labour within many national contexts (Harriss-White 2002). The focus of the book is much narrower. We do not even attempt to study the impact of globalisation on the Indian plantation sector in a systematic manner. Still, the changes that we have studied in the world of work of the plantation labour can be understood only with reference to these larger changes in the global economy, more so because the tea sector in India historically has been more closely integrated with the global economy than many other sectors.

Labour in Globalising India

Pre-reform India is generally described as an over-regulated, inefficient economy. Even in the post-reforms period, labour market reforms have been one of the most controversial issues in economic policy. It has been argued that India’s labour market regulations are heavily biased towards the organised sector that employs less than 10 per cent of the total workforce. This rigidity in the labour market, it is argued, has created disincentives for employers and has throttled the expansion of employment in the organised sector. As firms find it difficult to lay off labour they do not employ additional labour during periods of boom as well (Anant 2009). As a response to th...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Tables
• List of Figures
• Acknowledgements
• 1. Introduction
• 2. The Tea Sector in Assam in a Comparative Perspective
• 3. Employment Characteristics of Tea Labour
• 4. Occupational Mobility among Tea Garden Labourers
• 5. Causes and Implications of Occupational Mobility
• 6. Conclusions
• Appendix Ia: The Plantations Labour Act, 1951
• Appendix Ib: The Plantations Labour (Amendment) Act, 2010
• Appendix II
• Bibliography
• About the Authors
• Index