Solutions for farmers to stay with tea growing areas

(Baonghean) -With a total tea area of ​​up to 8,000 hectares, tea trees have proven their effectiveness in the midlands and hills of Nghe An. However, in the raw material areas, the situation of competition for purchase and sale is creating a paradox of artificial surplus and shortage of raw materials. This not only harms the interests of tea growers and businesses, but also affects the Nghe An tea brand.

"Floating" tea ingredients

In the face of the general economic difficulties, Nghe An tea exports still achieved positive growth in value, which is an encouraging sign. However, in the tea raw material areas of our province, there is a reality worth pondering. That is, tea growers are not very interested in sticking with the company's affiliated enterprises, despite being supported with investment and care according to the State's regime. We directly went to the tea raw material area of ​​Thanh Mai commune (Thanh Chuong). The whole commune has a total area of ​​about 400 hectares, plus 214 hectares of tea of ​​Thanh Mai Tea Processing and Service Enterprise. Mr. Bui Van Thang - Chairman of Thanh Mai Commune People's Committee said: "The commune's tea productivity ranges from 11.5 - 12 tons/ha/year, with an output of about 4,800 tons of fresh buds per year. The area of ​​Thanh Mai Tea Enterprise produces more than 2,000 tons/year". However, there is a paradox happening, that is, the Tea Processing Factory of Thanh Mai Tea Processing Service Enterprise only has a capacity of 12 tons/day but still lacks raw materials.

Mr. Tran Quoc Khanh - Director of the Enterprise said: "In every year when we work hard, the enterprise can only purchase 1/3 of the tea output in the area. If we do not step up the work of assigning targets to workers, the purchasing will be even worse. In 2012, the enterprise only purchased 600 tons out of the total output of more than 2,000 tons." So where did the remaining tea materials grown in the area go? To answer this question, we went directly to the tea material areas of Thanh Mai Tea Processing Service Enterprise.

Meeting the family of Ms. Le Thi T - a worker of team 3, who was packing tea buds with her family for import. She confided: “If the weather is favorable, my family harvests tea once a month, but if the weather is not favorable, the harvest cycle lasts 1.5 months. During that time, my family has to hire people to apply nitrogen fertilizer 3 times, not to mention that at the end of the year, we have to "spend" about 500 kg of nitrogen to fertilize the tea. Therefore, the investment cost is quite large. Meanwhile, there was a time when the Enterprise bought raw materials at a price more than ten times higher than private processing facilities, so my family only sold a part to the Enterprise according to the contracted quantity, and a part to private processing facilities, so that we could make a profit and compensate for the labor cost”. Also in the same afternoon, after only 30 minutes of observation, we recorded many people from the Enterprise continuously carrying bags of tea buds higher than their heads to private processing factories located close together along Ho Chi Minh road.

Thus, the reason why the Factory's workers sell tea to private processing facilities is common is because the Factory's purchasing price does not keep up with the price level of private facilities. On the contrary, from the customer's perspective, private processing facilities prefer to buy raw tea from the Factory's workers because the quality of tea buds is somewhat superior to that of tea buds among the people due to the correct application of technical processes. In Thanh Mai commune, there are currently 11 private facilities with a total purchasing and processing capacity of about 100 tons/day and night.

For example, the Duong Thich tea processing facility of Mr. Nguyen Van Duong's family in Nam Son hamlet has a production line of up to 15 tons of fresh buds/day and is more modern than the Enterprise's line. When we arrived, the rotary kilns were operating at full capacity. Mr. Duong, the owner of the tea production facility, said: "This machinery and equipment line was advanced by the partner. After each time we import goods for the partner, a part of the income is deducted from the machine investment. We strive to purchase and process for our own existence and to solve the output for tea growers...".

Modern green tea processing line of 15 tons/day of Duong Thich private enterprise in Thanh Mai - Thanh Chuong.

Similarly, in Hung Son commune (Anh Son), there are also 3 raw tea processing factories with a total processing capacity of more than 30 tons/day in operation. Most tea growers in Hung Son sell tea buds to Hung Son Tea Processing and Service Enterprise at 3.3 thousand VND/kg. Meanwhile, private units purchase at about 3.55 thousand VND/kg. Mr. Tran Duc Chau - Secretary of the Party Committee of Hung Son commune (Anh Son) said: "The Hung Son tea raw material area was built by the commune in conjunction with Nghe An Tea Development Investment Company Limited (LLC) in the form of investing in seeds, fertilizers, intensive farming techniques... Starting from 2001, Hung Son Tea Processing and Service Enterprise signed an annual tea purchasing contract for tea growers. However, the appearance of private tea processing facilities has led to competition in buying and selling, threatening to disrupt the long-established raw tea area".

While in Thanh Mai (Thanh Chuong) and Hung Son (Anh Son), many private tea establishments have sprung up, competing with tea factories under Nghe An Tea Development Investment Company Limited to buy and sell, at the October Tea Processing and Service Enterprise located in Nhan Tien hamlet, Cam Son commune (Anh Son), the fate of tea growers is very uncertain because the October Tea Processing and Service Enterprise does not have a processing factory. When we contacted to find out information, the enterprise headquarters consisted of 3 rows of level 4 houses with closed doors even during working hours. The entire agency only had security guard Nguyen Van Loi and his 3-year-old son on duty. The October Tea Processing and Service Enterprise, formerly the Youth Volunteers - Construction and Engineering Team of Anh Son district, was assigned the right to manage and use more than 2,000 hectares of land in the communes of Hoi Son, Hoa Son, Tuong Son and Cam Son.

Since 2007, the October Tea Processing Service Enterprise has taken over and officially started operating. However, since the transfer, due to the lack of a processing factory, most of the people's raw tea has had to be sold to other enterprises or private establishments, with unstable prices, leading to the interests of tea growers not being guaranteed. Ms. Nguyen Thi Tham, Nhan Tien hamlet, Cam Son commune complained: "The sale of my family's tea products is not stable, the price fluctuates depending on the purchasing power of traders...". Thus, it can be seen that in some tea raw material areas, there are paradoxes that, if not promptly resolved, will cause double losses for both tea growers and state and private enterprises.

People harvest tea.

Need to harmonize interests

With a total tea area of ​​up to 8,000 hectares in the province, the processing factories of Nghe An Tea Development Investment Company (LLC) only meet the processing capacity on the total area of ​​nearly 3,000 hectares of the company. Therefore, calling for the construction and development of more processing factories of both the state and private sector is necessary to create a competitive environment to create output for tea growers' products. Mr. Bui Van Thang - Chairman of Thanh Mai Commune People's Committee (Thanh Chuong) said: "Private establishments have contributed to solving the output for tea growers' products, because the capacity of Thanh Mai Tea Processing and Service Enterprise is also limited...". After all, Mr. Thang's assessment is completely reasonable, however, through our research, we found that many tea processing facilities, when granted business registration certificates, did not build tea material areas or sign contracts with farmers to meet 70% of raw material needs according to the tea processing regulations of the Provincial People's Committee.

In reality, private processing facilities have “parachuted” into raw material areas built by tea factories, local authorities and people in the past. Appearing later, and in order to have raw materials for production, private facilities have pushed up prices, breaking the common price level of the tea industry to attract sellers to create a competitive advantage in a certain period, not sustainable. Sharing this view, Mr. Tran Duc Chau - Secretary of the Party Committee of Hung Son commune (Anh Son) expressed his opinion: “The problem is not to block rivers and markets, to discriminate between business forms, but when granting licenses, managers need to clearly check whether the business meets business conditions such as building raw material areas or having contracts to ensure raw materials, ensuring food hygiene and safety, and environmental hygiene at the production facility or not. Only then can we create fairness in competition in this field”.

In addition, with the "snatch" purchasing method, that is, without signing a specific contract, when the market price drops, the interests of tea growers will not be guaranteed, bringing many risky factors when private establishments stop purchasing. And in reality, in Thanh Mai commune (Thanh Chuong), there was a phenomenon that in previous years, there was a time when the price of tea dropped to 1.8 thousand/kg, at that time private factories did not purchase, and the tea products made by farmers were stagnant.

Price control mechanism

Not only the operation of private tea processing facilities needs to be adjusted, but the unit considered the core of the tea industry, Nghe An Tea Development Investment Company Limited, also needs to have a more flexible mechanism for managing purchasing prices. The company needs to let member enterprises take the initiative in part or completely in the production and business plan so that there is not too big a difference between the purchasing prices of the enterprise and private facilities. Because currently, according to Mr. Dinh Van Hiep - Head of Planning and Agricultural Engineering Department, Nghe An Tea Development Investment Company Limited, this unit is making a price plan for next year by basing on the average selling price at the end of the previous year and allowing to adjust the price plan from 5-10% depending on the ups and downs of the market.

For example, the price plan for 2013 proposed by the company was 2,800 VND/kg for CTC tea (processed ground tea) and 3,000 VND for green tea. After the tea price increased, the company also adjusted, but the price of CTC tea only reached 3,200 VND/kg and green tea 3,400 VND/kg. If we compare the purchase price of private establishments in Thanh Mai currently (end of August) which has increased to 4,500 VND/kg, it is understandable that the purchase price of local enterprises is not attractive to sellers. This situation puts Thanh Mai Tea Processing Service Enterprise in a difficult situation in purchasing raw materials and managing factory workers selling tea outside.

In that situation, from August to the end of 2013, Nghe An Tea Development Investment Company Limited gave Thanh Mai Tea Processing Service Enterprise a special mechanism in the form of "3 autonomy". That is: autonomy in buying and selling raw materials, autonomy in producing products, and autonomy in finding output for products. Therefore, on August 22, the enterprise's input tea purchase price was pushed up to 4,000 VND/kg. "Before handing over the proactive mechanism to the enterprise under the close supervision of the company, we produced and did business according to the company's plan set out at the beginning of the year. As a result, the unit was not proactive in production and business activities, and was very likely to go bankrupt. After being allowed to balance the purchase price, the amount of raw tea sold by workers to the Enterprise increased", Mr. Tran Quoc Khanh - Director of the Enterprise shared.

Thus, currently existing in the tea raw material areas are private processing facilities that have sprung up without paying attention to investing in the raw material areas. They are willing to push prices up and are willing to not buy when the tea price drops. Meanwhile, the enterprises under Nghe An Tea Development Investment Company Limited, which are the core units, do not have a flexible purchasing price mechanism, so they cannot attract tea growers.

That creates a chaotic and artificially surplus and shortage tea material market. The problem now is to build a reasonable tea industry development orientation to harmonize the interests of both farmers and tea business enterprises, creating sustainable development for the Nghe An tea brand. To do this, there needs to be a close connection between state management; the active, effective, sustainable participation of factories and processing enterprises; and the responsibility of tea growers in production according to the correct process, accompanying the investment and processing units when prices fluctuate.

Article and photos: THANH DUY - NGUYEN SON