Argentine Tea Book
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2Base Scan on Sustainability Issues in Argentine Tea Industry
BASE SCAN OF SUSTAINABILITY ISSUESBASE SCAN OF SUSTAINABILITY ISSUESBASE SCAN OF SUSTAINABILITY ISSUESBASE SCAN OF SUSTAINABILITY ISSUESBASE SCAN OF SUSTAINABILITY ISSUESIN ARGENTINE TEA INDUSTRYIN ARGENTINE TEA INDUSTRYIN ARGENTINE TEA INDUSTRYIN ARGENTINE TEA INDUSTRYIN ARGENTINE TEA INDUSTRY
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4Base Scan on Sustainability Issues in Argentine Tea Industry
T ArgentinoBase Scan of Sustainability Issues in Argentine Tea Industry
Josefina EiseleProgramme Assistant, Solidaridad Regional Expertise Centre for SouthAmerica
Research Coordinator:Jeroen Douglas, Director, Solidaridad Regional Expertise Centre for SouthAmerica
2009, Edition - first
Prakruthi43, 2nd Cross, Ramaya LayoutSt. Thomas Town PostKammanahalliBangalore 560 084, Indiawww.prakruthi.org
on behalf ofSolidaridad Regional Expertise Centre for South & SE Asia
Design and Layout by Rajesh MVPrinted at National Printing Press, Bangalore
Table of ContentsTable of ContentsTable of ContentsTable of ContentsTable of Contents
Foreword 1 7
Foreword 2 9
Executive Summary 11
SECTION I OverviewSECTION I OverviewSECTION I OverviewSECTION I OverviewSECTION I Overview
General Overview 15
Historical Overview 17
Stakeholder Representation 19
Production Aspects 20
Influencing Factors 28
Assessment of Critical Issues 31
Trade Aspects 32
Economic Aspects 44
Legal Aspects 50
CSR Aspects 60
CSR in Argentina 67
SECTION II Summary of Problems and SWOT AnalysisSECTION II Summary of Problems and SWOT AnalysisSECTION II Summary of Problems and SWOT AnalysisSECTION II Summary of Problems and SWOT AnalysisSECTION II Summary of Problems and SWOT Analysis
General Summary of Problems 73
SWOT Analysis 76
SECTION III Conclusions and RecommendationsSECTION III Conclusions and RecommendationsSECTION III Conclusions and RecommendationsSECTION III Conclusions and RecommendationsSECTION III Conclusions and Recommendations
Conclusions and Recommendations 81
Annexure: ILO International Labour Standards 86
6Base Scan on Sustainability Issues in Argentine Tea Industry
Foreword 1Foreword 1Foreword 1Foreword 1Foreword 1Zipping from the silver straw placed in my hot mate gourd, I realize theirony of writing some opening words on this insightful report on theArgentine tea industry. Virtually the entire nation drinks yerba mate,a strong herbal, grassy reminiscent of green tea, and the production ofmate is five times greater than the nations green tea sector. Both teatrees grow in the same northeastern Misiones province, in the proximityof the spectacular Iguaz Waterfalls at the frontier with Brazil andParaguay. Virtually all green tea is exported. The Argentines ratherprefer their mate drinking ritual.
As green tea is the little brother, this may be the explanation why theArgentine sector has not yet taken any serious steps towards corporatesocial responsibility (CSR) and improved farm management practices.On the social side, the sectors main concern is mere survival. The teasector is underfinanced, in some cases obsolete, with unsecure incomeand no investments whatsoever in improving the overall low to averagequalities. Workers quite often do not receive social benefits, as they arenot registered. Clusters of family farmers organized in exporting co-operatives have poor bargaining powers in relation to mighty buyerscorporate clout. This is a classical problem of dependency, so oftenregistered by Solidaridad in agricultural chains of custody. In fact, theaspiration to eliminate the coyotes the middlemen was the primereason for Solidaridad to launch the Fairtrade label way back in 1987.
On the agricultural side performances at most tea farms are sub-optimal.A future Solidaridad tea support program in combination with theGood Inside label of Utz Certified can make a marked difference.Planting density could be doubled, pruning techniques modernized,quality selection and homogeneity improved, processing conditionsmade relatively easy, and access to finance can be facilitated. Throughan integral support effort, the better part of the sector can increase itsoverall output, including sales and marketing to higher market ends inEurope and the US. Together with the already existing organic tea, anew round of CSR certification can give a more solid future to severalthousand families.
8Base Scan on Sustainability Issues in Argentine Tea Industry
My colleague Josefina Eisele after the writing of this excellent baseline is ready to implement Solidaridads better tea program.
Jeroen DouglasDirector, Solidaridad Regional
Expertise Centre for South America
The tea smallholdings have been a challenge for all certification andcode-setting bodies with most of the certifications focusing mainly onthe large estates. This is in spite of the fact that the smallholders, unlikebig estates, are not covered under different laws. Previous researchesby Solidaridad have shown that the information flow and sharing ofmarket demands, such as knowledge about quality, price, sustainabilityissues and good farm practices, is limited for smallholders. It alsohighlighted the low level of organisation through cooperatives and otherdedicated institutions. This hinders smallholders representation inrelevant institutions, knowledge and skill sharing and ultimately theirbargaining position. However, from the sector sustainability point ofview, the smallholder segment needs to be addressed with some prioritybecause they represent a major stakeholder group. Hence, theSolidaridad tea programme specifically focuses on smallholders issuesto ensure access to and benefits from certification schemes and marketsfor smallholders and workers.
Argentina is the ninth largest tea producer in the world and the sixthbiggest exporter of black tea. More than 80 per cent of the holdings arewith smallholders and yet their contribution to the overall volume issignificantly low a trend which is so similar to India or other tea-producing countries. Argentina is also the third largest supplier of blacktea to Netherlands and Dowe Egberts is the biggest importer inNetherlands with its ten per cent of total tea imports coming fromArgentina. Yet, there is scant information or a detailed analysis on theenvironmental, social and economic impact of tea production andprocessing in Argentina.
The present study prepared by Josefina Eisele under the coordinationof my senior colleague Jeroen Douglas fills up that void. The presentbase scan is an assessment Solidaridad is conducting on sustainabilityissues in tea smallholdings of India, Sri Lanka, China, Indonesia andVietnam which has never been done before. By facilitating thepublication of this research we hope that the findings would provide
Foreword 2Foreword 2Foreword 2Foreword 2Foreword 2
Base Scan on Sustainability Issues in Argentine Tea Industry
crucial information for Solidaridad and other organizations to initiatesupport programmes for sustainability in the tea smallholdings.
Shatadru ChattopadhayayDirector, Solidaridad Regional
Expertise Centre for South and SouthEast Asia
Executive SummaryExecutive SummaryExecutive SummaryExecutive SummaryExecutive Summary
The aim of this report is to provide a base scan research identifying keysocial, economic, environmental and quality issues in the tea industryin Argentina. The base scan will provide a preliminary assessment ofthe tea chain in the country.
The topics addressed will allow us to characterize the situation of thesector in general and the product in particular, as a starting point foridentifying problems that hinder tea sector development in Argentina.
Our work is broken down in three sections, firstly, we analyze the sectorwithin the national and international context, the structure of thecultivated area, production, process development, trade market, pricesand margins; putting particular emphasis on farms run by smallproducers.
This first section is also represented by the legislative and policyframework and an analysis of the certification systems and newinitiatives that are being considered regarding international standards.
It will then proceed to evaluate the critical issues that conspire to thedetriment of progress of the tea sector, both at each link in the foodchain as to the articulation of them and their interaction with the contextaround it.
The second section is based on the identification of the sectorweaknesses, where we seek to develop proposals and alternatives toimplement actions to ensure a sustainable development of the teaindustry.
Finally, in the third section we will suggest courses of action, aimed atstrengthening productive integration patterns in the argentine tea chain.
The formulation of proposals seeks to shoot a debate about the variousoptions to improve the social, economic and environmental conditionsin the Argentine tea industry to enhance its competitiveness.
The period studied covers the beginning of the productive activity inthe Argentine tea industry, from the mid 50s until the year 2007/8,representing more than 50 years of history of this economic sector.