The tea industry

The multi-billion dollar tea industry employs millions of people, but working conditions and earnings for the producers are often dire.

The bulk of global tea production takes places at large plantations. Workers often live on or near the estates where they work and low wages and poor working conditions are prevalent. Even when national minimum wages are met on a tea estate, there is still a considerable gap between that and living wages, and workers often rely on in-kind benefits.

Small-scale tea farmers often have very small plots and rely on nearby tea estates as their connection to the broader markets, meaning these producers have little leverage with which to improve their incomes.

Industry challenges

The global tea industry, steeped in tradition and consumed by millions, faces a set of challenges that span environmental, social, and economic dimensions.

• Labour Conditions and Fair Wages: Labor conditions in tea plantations have been a longstanding concern. Workers, often in developing regions, face challenges such as low wages, long working hours and inadequate living conditions. The wages of tea plantation workers in India, for example, are the lowest of any employment sector.
  
• Climate Change Impact: Climate change is hitting both the quality and quantity of tea grown worldwide. In China, drought caused spring harvests in 2023 to fall 20 percent, while in Kenya and Malawi tea production is predicted to decline by the 2050s and fall significantly further by the 2080s.
• Market Volatility and Price Fluctuations: The tea market is susceptible to price volatility, impacting the income of tea growers. Fluctuations in global tea prices can lead to financial uncertainty for smallholder farmers. Establishing mechanisms to stabilize prices and providing support to tea producers during periods of market instability are essential for the economic resilience of the industry.

“It is not only men that can do this job, women are equally capable of doing this job. I feel that I represent women's empowerment. I really love this job.”

Janet Nixon, factory officer, Fairtrade certified Welbeck Tea Estate, India

How Fairtrade makes a difference

Global tea supply chains are often complex and involve many players. Fairtrade enhances fairness and transparency in these networks, promoting ethical practices and improving the livelihoods of tea producers.

• Adequate Livelihoods: Fairtrade-certified tea organisations receive a Fairtrade Minimum Price for their tea. This price varies according to regional conditions and production methods, with a higher price, e.g. for organic tea. The Fairtrade Minimum Price functions as a safety net protecting tea farmers from market fluctuations. Additionally, Fairtrade organisations receive a financial Fairtrade Premium, the use of which is collectively determined by cooperative members or plantation workers.
• Gender Equality: The Fairtrade Standards promote gender equality. The criteria within the standards prohibit gender-specific discrimination and, for example, pregnancy tests during recruitment, foster a zero-tolerance policy towards sexual harassment and mandate support for disadvantaged groups and minorities. Binding policies for gender equality are also required.
  
• Climate Resilience: Fairtrade provides training opportunities and support to make tea cultivation more sustainable and resilient to climate change. This includes prohibiting deforestation, promoting the careful and efficient use of water resources, encouraging drought-resistant plant varieties and diversifying income sources.
  
• Collaboration for Better Wages: As a member of the Global Living Wage Coalition, Fairtrade works with other organisations to develop living wage benchmarks for tea plantation workers. These benchmarks consider essential needs such as education, healthcare, secure housing and nutritious food, serving as guidelines to ensure a decent life for workers. To date, these benchmarks have been established for the tea sector in Kenya, India, Sri Lanka and Malawi.

Fairtrade tea is good for people, planet and business. Find out how your company can get involved.