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Is Trade Fair for Chinese Tea Farmers & Tea Pickers?

Is Trade Fair for Chinese Tea Farmers & Tea Pickers?
March 28, 2018 No comments

The reason for writing this article is because we've received several questions regarding the livelihood of the Chinese farmers we cooperate with. That's completely understandable since none of our teas hold 'fair trade' certificates.

Through this article, we want to clear some misperception regarding the Chinese tea industry. We also aim show more insight in the competitive landscape, so you can understand the difference relative to other tea producing countries such as India, Sri Lanka and Kenya.

Tea Farmers in Famous Tea Regions

For 7 years we've been travelling around China exploring the main tea regions such as the West Lake region, Wuyishan and different parts of Yunnan. Based on what we've seen, we can safely assume that tea farmers in well known tea regions are well off.

Imagine, you're owning piece of land in the middle of longjing village, where the famous West Lake Dragon Well is produced. You'll basically not have to do any marketing as tens of millions of tourist will pass by annually. And even if you do not take care of the processing well, the tea would still sell at high prices.

As the Chinese middle class becomes more wealthy, there's a higher demand for premium tea. What we often hear from farmers is that they wish they had more land and that there where more available workers able to harvest the tea. The 'tea picker' profession, though reasonably well paid, is out of fashion in China.

Tea Farmers in Less Known Tea Regions

Farmers in less known tea regions have less bargaining power compared to those who own premium land in favourable regions. However, if the soil quality is good, they may still do well. The focus has to be put on producing quality and present the tea as a good alternative to ones from famous regions.

While salaries are increasing in China, not everyone can yet afford a Dragon well tea from Longjing village or an authentic Mao Feng from the Yellow Mountain. Therefore, teas from other regions, which are high value for money, are still in demand.

The Chinese are horrible in tasting wine, yet they have a well developed taste for tea. Good tea will be recognised and valued.

With the rise of eCommerce, farmers are now also able to open online shops and sell directly to Chinese consumers. Therefore, they're nowadays less dependant on offline foot traffic. With good tea and good marketing, they're able to do well.

Sometimes farmers organise cooperatives and bargain as a group with wholesalers. What we also often see is that they open an online store as a cooperative and launch all teas from all farmers who are part of it. They may agree with each other to focus on producing different price ranges and different cultivars.

Farmers Who Don't Own Their land

The situation will be completely different if you don't own but rent the land from someone else. Those farmers should take into account that in one year their harvest might be lost due to bad weather situations. The problem is that most of the times they don't. We've heard stories that some farmers got in financial trouble and lost all their savings. Others borrowed from family and friends and are unable to repay.

It's not always bad weather that is to blame. Running a tea farm isn't as easy as some imagine. As a farmer they need a lot of knowledge about growing tea and managing the fields during the year. And they need a great team of tea pickers as well as tea masters who manage the production process.

More insurance companies these days offer agricultural tea insurance, but not everyone is aware or believe they need these products. Farmers are also often not well educated enough to understand the these insurances.

Tea Pickers

Currently there's a large shortage of tea pickers in China. It's an unpopular profession and it's highly seasonal. As you can imagine, people prefer to work in large stable companies with stable all year round salary. As a result, those who do want the job are paid well.

The shortage is in fact getting worse. See below a picture of tea pickers in Hangzhou taken Spring 2018. Only older people are taking on these high season jobs.

tea pickers in china fair trade

Tea pickers in famous tea regions are paid around 250 RMB a day (40 USD), which is very decent money in China. However, as there's only 3-4 months of work, they've to look for other jobs during the other months.

Also, the hours aren't long. With premium tea, the tea leaves have to picked during a certain time of the day. There's generally a morning and afternoon session, but this depends on the region.

The situation is different for mass producers. These companies would produce tea all year round. The hours are longer and the salaries are much lower, but in return there's more income stability.

The Problem of Succession & Marketing

What we often hear from farmers is that they worry about who'll continue their business after they retire. Running a tea farm, isn't something the next generations of Chinese prefer. They rather move to big cities and have professional careers in large corporations.

Returning to one's roots

Yet, living in large cities is stressful. The rents are high and wages often aren't as high as people might have hoped. From some farmers we hear that their sons and daughters eventually returned to work on the tea business. Often times, they come back with new skills sets that can really benefit their business. They may focus on marketing, eCommerce, sales and branding. Something that older generations have no understanding of. As a result, these farms will become less reliable on foot traffic and wholesalers.

The Rise of eCommerce

Many Chinese don't have desktop computers or laptops at home. But everyone has a smartphone! Ordering things online has been on the rise in China in the past years. The Chinese have the convenience of ordering teas from thousands of online tea sellers.

Through eCommerce farmers have the ability to cut out middle men and sell direct to the end-consumer. It's not that they stop cooperating with wholesalers, but adding more sales channels definitely reduces the risk of their business and improves their bargaining position.

Good Tea Doesn't Leave China

More than 99% of the tea that leaves China is mass produced bulk tea. Most of it is green tea, which are used as a raw ingredient for producing beverages and products.

Most artisan tea farmers never look abroad. The size of the domestic demand is many times larger than the rest of the world combined. The Chinese middle class is also more willing to pay higher prices for better tea.

As a company, artisan tea is something that we're truly passionate about. Have you ever seen an awesome movie which you really want others to see? Well, we curate teas on a daily basis, and you can imagine that we've had lots of teas that we would love you to taste.

Conclusion

In this article we've discussed several factors that affects the livelihood of farmers and tea pickers in a positive way. This includes:

  • The rising tea demand of the middle class in China, who are willing to pay more for premium tea.
  • The scarcity of tea pickers on the labor market.
  • The ability of farmers to access the end consumer through eCommerce.
  • The new generation of tea entrepreneurs with valuable sales, marketing and logistics skills, reducing the need to rely on wholesalers.

Nevertheless, this doesn't mean that there's no room for improvement. The majority of the tea pickers are working seasonally and still lack a stable job and a basic social security package. Tea producers should find ways to employ employees for longer through offering more responsibilities off season.

Questions or concerns? Please ask through the comment section below!