Monday, February 07, 2011

Sustainable, Organic, Fair-Trade: A Conversation with Nigel Melican [i]


EDITOR'S NOTE: Like a convergence of heavenly bodies, the exquisite Cinnabar -- founder, editor, and lead writer for the indispensible site -- and the eminent Nigel Melican, owner of Teacraft Ltd and one of the world's most eminent scientific experts on the topic of tea -- came together recently at the World Tea Expo. It was the great good fortune of CHA DAO that Cinnabar agreed to contribute a guest entry, in the form of an interview, and that Nigel agreed to be interviewed on this occasion. We are tremendously grateful to them both. ¶ What follows here is a transcript of that interview. Because it was a substantial conversation, we shall be publishing it in three instalments; this is Part I.

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A few months ago, at the World Tea Expo in Las Vegas, Nigel Melican of Teacraft Ltd was gracious enough to grant me some of his valuable time to sit down and talk about sustainability, organic farming, fair-trade labor practices and related labeling and certifications within the tea industry. The following is a transcription of our conversation, slightly edited for improved clarity. The conversation took place in the sweltering atrium of a Las Vegas hotel, our voices competing fiercely with the blasting onslaught of smooth jazz being piped in over our heads.

Cinnabar (C): I have to admit that I'm somewhat skeptical of the programs and labeling for fair trade and organic farming.

Nigel Melican (NM): Yes, so am I. I met a Fulbright scholar in Tanzania who was looking at certification and the way that it impacts on small farmers across all the certifying possibilities in Tanzania that are open to them. Though she wouldn't say on record that she thought they were marketing hype to sell more tea, not to the advantage of the farmers necessarily, that's definitely her overlying view.

C: There's a lot of controversy about fair-trade practices in tea production in India. There's been a lot of backlash saying that workers aren't actually getting any benefit from it. Even though the plantations get certified, there's no follow-up after that to make sure that the benefits are actually going back into the community.

NM: Yes, it's looking bad. There are certain companies who, if someone in the company really believes in it then they'll follow it up and make sure that happens. But it can either slip between marketing and, I suppose, human resources, although very few tea companies have the sort of human resources department on the producers' side, and there must be some direct exploitation as well. Generally I think they go into it for the right reasons, but it doesn't always deliver in the way that it's supposed to.

C: In the panel discussion “Social Responsibility and Certifications: A Panel Discussion” (presented at the World Tea Expo in June of 2010), there was someone from one of the major the organic certification programs in the United States, and someone from Transfair, someone from Utz, and someone from the Rainforest Alliance. At a point someone in the audience was asking some pretty pointed questions about the ability of small farmers to be able to afford to get certified. And the representatives from the two big certification organizations said, essentially, "uh, it's to their advantage to get certified, because they make more money," but the people from the other two organizations were running programs that were a little more flexible. It was quite an interesting discussion. Then Joshua from Rishi Tea talked about how his company deals with some small farms that don't have the resources to get officially certified. They work with them directly and make sure that the tea producers are doing everything ethically and responsibly and Rishi presents that information directly to the consumer, which seems to me like it’s much more straightforward and useful than a certification label.

NM: But a company like Rishi, you can trust them. There are a lot of companies who are ... well, I wouldn't trust with my wallet ... Joshua's a nice guy.

C: Yes.

NM: There are shades of niceness. The tea industry used to be a wonderful profession, you know -- they used to treat their labor force pretty badly -- but amongst themselves, they were honorable men, and everything was done on a handshake. I've been in the tea business for thirty years, and I've seen it sort of go the way of the world.

C: Do you see situations where the organic practices are conflicting with the fair-trade practices?

NM: I can't actually think of anywhere they conflict, though people perhaps go into them for different reasons. Organics is much more about helping the land, and making it have an attractive product to market, than helping the actual worker and having an attractive product to market.

C: Yes, the focus is different.

NM: But I can't think of any examples of conflict between fair-trade and organic, and many people are practicing both.

C: Yes, I’ve noticed that there are plenty of companies that state that they're both on their labels. I'm skeptical of the labels because I'm not sure if there's really as much behind it as the label means ... a label's just a label.

NM: Well the label is a prompt, to prompt your perceptions of what's behind it.

C: It is good that people are thinking about where their tea comes from and what its impact is on the environment and the people who are producing it.

NM: A growing number of people are. I would rather have a product that had a sustainable label than an organic label, or would have a fair-trade label.

C: I don't really understand that much about agriculture, so in traditional tea farming, how damaging is the type of fertilizer, say, and the use of pesticides, in the first place?

NM: Well, all things are relative, and tea is a monoculture, and people tend not to like monocultures because of bio-diversity issues. But on the other hand, it's better to have tea as a monoculture than an annual crop with fallow periods, because then you get a lot of land washed away by rain. Tea is in there for 100, 150 years. It's got a fabulous rich structure and the best way to grow tea is to keep mulching it, so you keep building up the organic material in the soil. So, on balance, tea is a very sustainable crop.

C: I would think that just the fact that it doesn't have to be replanted every year is a huge increase in efficient use of resources as far as agriculture goes.

NM: That's right. A good example of sustainability in tea is Unilever: a monolithic company who are hard-nosed, and yet they started a sustainable tea growing exercise in Kenya nearly twenty years ago, and they've gotten to the stage now where by 2015 every leaf of their tea will have an internationally-recognized label for sustainability.

C: That's impressive.

NM: I hesitate to promote what Unilever does, as an ex-employee having worked for them for 27 years, but what they've done in tea really has been fantastic, and other people are following. The other companies really are having to follow because Unilever buys nearly 30% of the world's exported tea, and they've said "every leaf we buy has got to have a Rainforest Alliance certification." That means that a lot of producers have got to jump, and they've got to get Rainforest Alliance certification.

C: Because everyone has to compete with the big guy.

NM: Right, and because if you want to sell to the big guy you've got to have the certification.

C: One thing that I think is important in the whole discussion is the difference between big scale tea production versus tiny, single -- not even single estates -- but small farms, like small production in China. The issues of organic farming and fair trade farming aren't the same, but the whole tea industry is talked about as if it's one huge thing, but the processes are totally different.

NM: Yes, absolutely different. In some countries you can see the two side by side. In Kenya you can, because you've got the big guys -- Finley and Unilever -- with huge acreage, and you've got the little guys with an acre of tea -- the Kenya smallholders -- and registered in a body there are 450,000 small farmers in Kenya. That's a lot of farmers.

C: That's farmers of any kind?

NM: No, not all, just small ones. I think the average in Kenya for a small farmer is half a hectare, which is an acre and a bit. That's the average, so there are some with ten acres, some with just a pocket handkerchief, but they still have to sell their tea somewhere. They sell it to their factory that they own by having a share in it, so the community owns their own factory; that is their investment. They get paid by the factory, and they get paid for every kilo of green tea leaf that they give into the factory, and at the end of the year they get a bonus payment which is based on how much the factory made at auction. If they plucked fine, and the factory processed well, then they get a bigger bonus. So they have a vested interest.

C: So there's incentive to put out a good product.

NM: So that factory is one of 60 in Kenya, small farm factories, and all the small factories are managed under the umbrella organization "Kenya Tea Development Agency." All the farmers, by having a share in the factory, and the factories having a share in the Agency, they all have an overall ownership.

C: Then how is it managed, by representatives?

NM: Yes, each region will have a representative in the zone, and each zone -- there are eleven zones -- will have an elected person who's the director on the main board, so it's a typical pyramid. There's corruption in that, inevitably, but it's been running since 1965. It's the best example in the world of small farmers empowered to compete with the big guys. Other countries tried to follow that route, but none were so successful. Some were catastrophically unsuccessful, Uganda being one example. Of course, they had bad political problems, and now they're pulling themselves out of that, and the small farmers are once again doing well, but on a much smaller scale.

C: I was really encouraged by what you were saying during the African tea tasting at the Expo about Rwanda, and the way the government is looking at development in the country.

NM: It's a benevolent dictatorship, effectively. It's probably the best form of government you can get. You get things done, and quickly, and they do them right.

C: Well, that's certainly a lot better than fairly recent times in Rwanda. It seems like they went through such a catastrophic political upheaval, big enough to get to a point where they said we're never going to let that happen again.

NM: Yes, what Germany went through too.

C: In the Kenya tea farms, where is most of the labor coming from, because the tea plucking season is not the whole year, is it?

NM: Yes it is. In Kenya they're on the equator. They have two wet seasons and the amount of leaf goes up then, and in the dry seasons the quality goes up, but they pluck all year round.

C: Is the labor that they're using in tea production mostly families?

NM: In the villages, mostly family labor, and the larger producers employ people from their community.

C: Are the tea farms competing with other agriculture in the same area?

NM: Yes, they are. In Kenya it's less so because people have established a sort of routine regular income from the tea. In Tanzania, which is the next country down, very much so, there's a choice of crop. People make that choice and at the moment tea is losing out. The actual competing crop is different in different areas. In the northeast it's spices that compete with tea. Down in the south it's bananas and vegetables. There's a much more ready market for those, and tea gets left unplucked, or not plucked as well as it should, so that quality goes down, and of course then the return goes down and that's a progressive thing. I was working on a project in Tanzania earlier this year, actually, to look at what the commercial possibility was of putting in extension service, to try and get people to understand that if you look after your tea then you will get a better return. Each country has a slightly different history, so you often get to the same point by a different route. In Tanzania they had a socialist, Marxist episode, so they had a lot of state-aided tea planting. They had large plots and people went in and they worked it, but there was no ownership, no pride of ownership, and when they became more liberalized, people shunned the collective farming because they wanted to grow their own, so a lot of that tea was abandoned. People grew their own so they had total control over that, of course. They make a choice: should I get money quick, by growing potatoes or bananas? Bananas are so simple to grow; they grow themselves. You just pull bananas off the tree: cut and they fall off into your hands. As people who are trained in the old-fashioned way [of growing and processing tea] are getting older the younger ones are coming in. Their sons are coming in, and they look at [the tea industry] and they say, “you know, I don't want to work in tea, plucking tea, when I can make money [faster] growing vegetables.”

C: They're looking at it as more of a short-term benefit?

NM: Pretty much so, and so there is a lot of tea that's been abandoned, and there are a lot of gaps in the bushes. The whole thing spirals downwards under those conditions.

C: I remember you talking about how taking over the land in a situation where a tea field has been left unworked is really unmanageable because pulling out the tea and replacing it with a different crop is really labor intensive. Are those tea fields recoverable for tea?

NM: Part of the work I was doing in Tanzania was to look at that and to see what the opportunity was of doing it. They do, to their credit, have a scheme [for recovering the tea fields that have been abandoned]. They've had a scheme there for about ten years, but it's been totally ineffective. It's not been organized properly. It's been done on a village scale, and the extension advice is very sparse, so they don't really do it very well. But we're looking at a way of coming in with organized planting teams, to come in and actually do it, and the farmers would pay.

C: Who would be coming in, what organization?

NM: I was working for a philanthropic organization. Philanthropic organizations in Africa got the idea that putting money in was like putting money in a hole in the ground ...

C: But putting in direct education and action is more effective?

NM: Exactly, so you would possibly do it by outsourcing it to a commercial operation, and then training the farmers in economics, and in husbandry.

C: The way that Utz was talking about their programs [during the forum at the Expo] it seems like they're much more focused on going in and helping the tea farmers learn how to run their businesses more effectively, rather than the more hands-off methods of Transfair.

NM: Yes, and that's good. There's a US organization called TechnoServe, and they do much the same thing. They concentrate much more on business management. African farmers have precious little understanding of business management. They're very smart about growing things, smart about seeing where a profit might come from, but in terms of profit and loss, and breaking even on investment, it's not the sort of thing they do.

C: If they're looking at getting the big official certifications the outlay of money is just tremendous.

NM: It is, but very often they'll group together. in the KTDA [Kenya Tea Development Agency], for instance, everyone owns their own factory, has a little share of the factory, and it will be the factory that gets the certification.

C: So they are able to gain certifications collectively which they would be unable to get as small individual farmers.

NM: A small contribution is taken out of their bonus, and then the factory can afford the $5000 a year, or whatever it costs.

C: So it does become affordable to them at that point, even though it's three-year gap between when they enter the program and when they're officially certified?

NM: Well they certainly haven't got any organic certification in Kenya. They've got fair trade, but no organic. The only really organic factories in Africa are the two in Tanzania. One is a factory called Luponde. That was the first organic factory, first organic estate, in Africa. They got certified in the '90s, I think, because they identified it as a good opportunity for marketing.

C: They were ahead of the curve enough to know?

NM: They saw what had to be done and they did it. Now the other factory went in for a totally different reason: Luponde's down in the south. Herculu, the other factory, is up in the north. It's an Indian-run factory. Luponde's parent company is Norwegian and Danish ownership. They come from sort of good ethical stock. The factory in the north is owned by Bombay Burma, and they've got organic factories in India. They went into organic in Tanzania because the cost of production is so high ... or the difference between the cost of production and the selling price is so small. They went into it so they could eliminate putting on chemical fertilizer.

C: Because they didn't want to have to pay for chemical fertilizer? That's interesting.

NM: I don't know of anyone else who went into organic for that reason.

[[to be continued]]


Kateri said...

Thank you for posting this. This is the kind of information my customers care about. I look forward to reading the rest of the installments

Josh said...

I am really so excited to find a candid interview with a professional regarding ag practices. It's hard to get straightforward information from anybody as a consumer, because everyone stands to make a buck off of the an uninformed market. Thank you for bringing some transparency.