CHAIPATEA - Literature review of the production costs of fresh tea leaves
Main goals
- Get to know the various studies on calculating the production costs of fresh leaf
- Deduce the orders of magnitude for the key parameters determining production costs
- Improve visibility, including for downstream players, of the tea value chain
Specific objectives
SO1. Analyse complementary methods for calculating the cost of producing fresh tea leaves: Living Income / Living Wage and True Price SO2. Highlight the main gaps in current methodologies: gender, diversity of cropping systems, diversity of harvesting practices, cost of climate adaptation, among other things
Context
The tea sector is particularly marked by a lack of transparency and visibility on prices and margins along the value chain. In addition to this issue at the level of the sector as a whole, we have also observed a high degree of heterogeneity in production costs from one geographical context to another, but also within the same geographical and soil/climate context, depending on the farming model, the type of tea produced, the intensity of input use, etc. This heterogeneity contrasts with the relatively homogeneous cost structures in other sectors, partly due to more regular processing ratios (coffee, cocoa).
Given this diversity of situations, it seemed very complex to define a “fair” price covering production costs in a non-contextualised way, and it was key to take on board the various studies on calculating production costs for fresh tea leaves, the subject of this study by Nitidæ for Commerce Equitable France as part of the Solidari'thé programme, supported by the Agence Française de Développement (AFD).
Main results of the study
- A glaring lack of information on how to calculate the production of fresh tea leaves
- The calculation of production costs needs to be highly contextualised, as unit production costs vary greatly depending on yields, harvesting practices, labour and input costs, etc.
- Fair trade and organic farming can be a significant step towards covering sustainable production costs
Very coarse harvesting practices (left) and very fine harvesting practices (right) imply massive differences in yield and very different production costs, even when they are practised on the same plot
In Kenya, the ‘Living Wage’ in tea is almost 4 times higher than the minimum agricultural wage (Anker Research Institute, 2022)
Related people
Ali Hatimy
Agronomist graduated from AgroParisTech and a dual degree from Sciences Po - Paris School of International Affairs, Master in International Development - he brings his expertise on agricultural value chains (cocoa, cashew nuts, hazelnuts), on agricultural advice, agroforestry and local agro-food processing. Multilingual (French, English, Moroccan and literary Arabic, Spanish, Portuguese and Turkish), he also has an expertise on the geopolitical contexts and agricultural policies of North Africa and the Middle East: Morocco and Turkey in particular
Anne Meyer
Agroeconomist graduated from the Institut des Régions Chaudes (IRC) of the Institut Agro Montpellier and from EM LYON (MSc Management), she has been passionate about tropical agricultural value chains for more than twenty years. She has put her skills at the service of NGOs and cooperatives, but also of the FAO and the organic agri-food industry (Ecotone group). She joined the Nitidæ studies department in March 2024.
François Griffon
Holder of a Master's degree in "Sustainable Farming and Agri-food Systems in the South", specialised in "Markets, Organization, Quality and Services" from Montpellier SupAgro - Institut des Régions Chaudes (IRC), he brings his expertise in sector and value chain analysis, market studies, quality management and farmers' organisations services and support
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