January, 2023

Davos 2023 learnings for tea

What can the tea sector learn about cooperation in a fragmented world?
Economics Blog Global

Business and government leaders met in January 2023 for the World Economic Forum’s annual meeting in Davos.

ETP’s Livelihoods & Gender Lead, Leena Camadoo, kept a close eye on developments, and reflects on what lessons the tea sector can take from the week’s discussions.

The cost of living crisis, and its impact on society’s most vulnerable, dominated the agenda with Laura D’Andrea Tyson, Professor of Economics at the University of California, observing that this is not a new crisis but a deeper iteration of the existing, “living wage or poverty problem.” The dilemma of balancing national self-interest against the global good was the theme of this year’s Davos; with leaders exploring how to achieve “cooperation in a fragmented world.”

These same questions resonate in the tea sector, where different sets of actors hold shared visions but discrete interests, communal challenges, but competing pressures.

The economics pillar of our Strategy2030 particularly highlights this challenge; setting out our ambition to see all tea farmers and workers earning a living income or wage, whilst ensuring that the industry itself continues to thrive economically.

While the tea industry at large agrees that there is an urgent need to improve incomes so that tea farmers, workers, and their families can afford a decent standard of living, the questions of how this happens and who is responsible are more difficult to answer.

“Our Strategy2030 sets out our ambition to see all tea farmers and workers earning a living income or wage, whilst ensuring that the industry itself continues to thrive economically.”

It is clear that, ultimately, achieving living wages and living incomes in tea will only be possible if stakeholders collaborate in delivering systemic changes to the tea business model. We at ETP are uniquely positioned to facilitate that collaboration, and initiate steps to enhance farmers and workers livelihoods.

Together with our members and partners, we continue to undertake robust programmatic work across Africa and Asia, with an aim to improve incomes for farmers and workers. This includes the Ulalo programme in Malawi, where we’re working with ETP member Taylors of Harrogate and Lujeri Tea Estate. We have jointly set up Village Savings and Loans Associations to support income diversification. This is just one example of our project work to ensure everyone involved in tea production has decent livelihoods.

Working directly with farmers and workers is only one part of the solution; to address the root causes of poverty we need to look at the regulations that shape the system. Our Strategy2030 is committed to developing evidence-based policy positions to build an enabling environment. We are currently supporting sustainability standards organisation ISEAL Alliance and the Global Living Wage Coalition to undertake a scoping study in Assam and West Bengal, India. The study will delve into the barriers and opportunities around calculating a living wage benchmark for tea workers.

“Working directly with farmers and workers is only one part of the solution; to address the root causes of poverty we need to look at the regulations that shape the system.”

Equally, we recognise that the private sector plays a critical role in driving value distribution and decent working conditions by adopting responsible business practices, investing in supply chains to tackle inequality, and sharing best practice within the industry. ETP is working with its members and pioneers to develop innovative business pilots and mechanisms to enhance farmer and worker livelihoods. For example, ETP has recently undertaken a digital payments pilot in Rwanda in collaboration with the United Nations based Better Than Cash Alliance.

“We recognise that the private sector plays a critical role in driving value distribution and decent working conditions.”

Ultimately, there is no one solution that can single-handedly close the living wage and income gaps. However, a coordinated combination of approaches, that prioritise collaboration and cooperation, have the potential to tip the scales. Taking this partnerships-led approach is key to tea smallholder farmers and workers earning a dignified income with enough to feed, house and educate their families, while building financial resilience to short-term risks.

Click here to learn more about our work on driving an economically thriving tea industry, as part of our Strategy2030.

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