Are small farms in India the key to taking tea organic?

The Guardian US/UK | Feb. 5, 2015

EcoTeas organic tea plantation

Ramesh Babu’s EcoTeas organic tea plantation in Kotagiri, Tamil Nadu, India. Photo credit: Ramesh Babu/EcoTeas

When fourth-generation tea planter Ramesh Babu decided to leave his family’s plantation in the southeast Indian state of Tamil Nadu to start his own organic operation, people called him crazy.

“It was unheard of in our part of the country,” the 54-year-old said of his decision in 2006 to take on 10 acres surrounded by forest in the hill town of Kotagiri nearby. “Initially, when you stop using [chemical] fertilizer you have a big fall in your production, so that’s one major factor which keeps other tea growers from going organic.”

Though rewarding, establishing an organic tea plantation has been challenging, Babu admits. There weren’t any other organic tea planters nearby, so he had to learn everything from vegetable farmers before launching his EcoTeas estate. And because there aren’t many small tea factories in India, he had to design his own processing machinery – a costly undertaking that took seven years. Selling the tea leaves he and his family can’t process or hand-roll on their own was also tough, Babu says, as tea companies pay the same going rate for organic leaves as for conventionally produced leaves.

It’s a lonely road that has left the family-run operation in the red to this day, but it could be an important one. A Greenpeace India report – which has been challenged as “pseudo-scientific” by the tea industry – released in August found that more than 90 percent of the domestic packaged and produced tea contained pesticide residues (pdf).

Yet despite the roadblocks, organic tea production could be moving closer to the norm in a country that produces more tea than any other except China. In the past few months, the two largest tea companies in India – Tata Global Beverages and Hindustan Unilever, which together comprise over 50 percent of the domestic market – announced it would set up pilot studies with the government to test how their growers can phase out pesticide use.

In a statement, Hindustan Unilever said it plans to work with nonprofit agricultural advisor Cabi on the feasibility study and source all of its agricultural raw materials using sustainable crop practices by 2020. The company aims to launch the pilot in April, according to Greenpeace India campaigner Neha Saigal, but it’s not clear when Tata – the second largest tea company in the world (hit in recent years with reports that female workers had been trafficked into domestic slavery from a plantation in Assam) – plans to kick off its program, which also has a goal to achieve sustainable sourcing by 2020.

More details about the pilots aren’t clear, as the companies have remained tight-lipped. (Both declined to comment). But when the largest players in any industry take their first steps towards sustainability, it raises the question: could this pave the way for smaller producers to shift to organic cultivation too?

There’s a huge need to bring down barriers that make it harder for growers to go organic, according to Saigal, whose organization pushed for the pesticide-free commitment, and is now keeping an eye on the companies to implement the pilots. India’s regulations for pesticide use in tea aren’t straightforward or consistent from one jurisdiction to another, nor comprehensive, she says.

“Pesticide regulation in India is in shambles,” Saigal said. “What this shows is that you need a policy level change.”

“Growers aren’t aware of what they are using and what they aren’t using,” she added. “It’s the government’s job to make these small growers aware of what’s toxic and what’s not. It’s their job to create those support systems creating a knowledge base and having a system to transform that knowledge to use ecological alternatives.”

Greenpeace India is in talks with the Tea Board of India – the government-run body with the authority to crack down on these regulatory problems – about setting up a support system for small tea growers so they can move away from pesticides.

In September, the Tea Board (which did not respond to interview requests) issued the second version of its Plant Protection Code that listed the approximately three dozen pesticides approved for use in tea. Yet maximum residue levels had been set for just 10 of them, according to the document.

Government support is needed for organic tea production to thrive in India, Babu says.

“The government of India and the Tea Board have got to come up with a very supportive package for small tea growers,” he said. “This would mean giving subsidies to help small tea growers convert to organic.”

EcoTeas plantation, Kotagiri, Tamil Nadu, India

In direct opposition to the monoculture standard, Babu has not removed the trees that have taken root throughout his EcoTeas plantation. Photo credit: Ramesh Babu/EcoTeas

Babu has his own plan to jumpstart a new generation of organic tea growers in India. He expects his factory to be fully up and running in the next few months, which he believes will improve his financial position, since he’ll be able to produce up to 30 times more tea. Once that happens, he wants to teach other growers how convert to organic growing so he can process their leaves in his factory and start an organic growers association that could foster mutual support and push for higher payments for their leaves.

But Hope Lee, a business analyst who specializes in the hot beverages market for intelligence research firm Euromonitor International, says that small tea growers in India and other developing markets – such as Argentina, the Middle East, China and Kenya – face other challenges beyond their borders.

“They find it hard to export their product to developed markets because they don’t meet strict standards in developed countries,” she said. “Some companies in developing countries don’t have money to hire these expensive services [to test for pesticide levels] and they don’t see the short-term profit from it if they pay a lot of money for testing.”

But it also depends on how serious the national government is in promoting their tea exporting business and how they set their standards, she added.

“So this issue comes to the question [of] if Unilever or Tata have the resources to solve this problem,” Lee said. “Big companies like Twinings or Unilever or Tata – they can influence the government and they have the resources to train their suppliers and make their tea grow in a more sustainable way, but they need the cooperation of the local government,” she said.

Fair-trade and certification programs are used as additional strategies to move industries towards more sustainable practices. Yet Daan de Vries, the markets director at UTZ Certified, an Amsterdam-based organization, says that certification alone is not enough.

“In some places there’s value but it’s not the way to go to change markets,” he said. “Consistently, you’ll see no more than maybe 5% of people who would want to change their buying behavior based on sustainability claims or labels.”

Tea 2030 is an initiative that appears to be taking on a more comprehensive approach. Organized by UK-based nonprofit Forum for the Future, industry heavyweights like Unilever, Tata and Twinings have joined with the Ethical Tea Partnership, Fairtrade and Rainforest Alliance to identify challenges facing the tea industry, such as competition for land, climate change, natural resource constraints and living wage issues. (Starbucks also joined late last year).

A report released by the initiative last year lays out these challenges, along with principles for a sustainable value chain, which the alliance would like to see in action by 2030.

“Of course the individual companies are pursuing their own sustainability [initiatives], such as Unilever and Tata on pesticides,” said Ann-Marie Brouder, Tea 2030’s coordinator. “But there are some problems too big for individual companies to tackle…. We believe that if we’re going to make change, it needs to be owned by the tea sector.”

In the meantime, Babu continues to quietly push forward, all the while tending his tea plants and the trees he’s allowed to intersperse among the crop in direct opposition to the monoculture plantation standard.

“It’s something that cannot be approached in terms of a business,” he said. “It’s a change of the mindset.”

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Cloud technology brings clean drinking water to India

GreenBiz | September 4, 2013 | Original headline: How cloud technology can bring clean drinking water to India

Women and children collect drinking water from tanks at an urban resettlement slum in Delhi, India

Women and children collect drinking water from tanks at an urban resettlement slum in Delhi, India. Credit: Frog Design

Imagine not having access to clean drinking water because you refused to vote for a particular politician, or didn’t pay bribes to the driver delivering your supply. Even after doing both these things, you’re still not sure just exactly when the next delivery will arrive.

This is the case in India, where access to drinking water is not universal. As India increasingly urbanizes and water becomes even more scarce, solutions that raise access will be more important in the coming decades.

That’s why the Piramal Foundation — which addresses India’s development challenges through social ventures — funded Sarvajal, a company that uses cloud technology to provide water via filtration stations and solar-powered ATMs.

UNICEF reports that water-borne diseases such as cholera, gastroenteritis and diarrhea in India are responsible for $600 million in medical bills and lost productivity per year, but it could get worse. The national government estimates that demand for clean water will rise 50 percent by 2031 if current delivery models stay the same. According to the World Bank, 220 million Indians will migrate to cities over the same 20-year period.

The problem: Steady access to clean water

In rural areas, residents often have no other choice than to capture groundwater.  “The water was brackish, there were no pipes, no tankers, and filters were too expensive,” said Anand Shah, former head of the India-based Piramal Foundation, of the lack of access. “They’d sift it but would still have large amounts of kidney stones, joint pain, arthritis and gastrointestinal problems.” Plus, the reverse osmosis process to desalinate and filter out impurities was inefficient.

In urban slums, the situation can be better, but not optimal. Although tankers arrive to dispense water for free, they’re intermittent and unpredictable, Shah said. Residents invest large amounts of time pursuing the tanker, jostling to fill containers they carry home. And even if the driver has the best intentions, the country’s rough roads lead to unexpected roadblocks.

Through a monitoring device attached to each filtration unit, embedded sensors and an RFID reader, Sarvajal tracks water quality in real time. It follows user activity, how many times the water has been backwashed and rinsed, when filters need changing, how much water a station has dispensed and how many times the power went out.

Service and maintenance were costly, so a monitoring device was built in-house allowing the company to diagnose machines from one central location.

The company grew from one pilot location in 2007 to more than 200 filtration station-ATM combos in villages of at least 5,000 people each across India. One resident per village can purchase a franchise for about 30,000 Indian rupees, about $500, and sell the filtered water for a penny per liter, he said.

Users pre-pay for their water, and funds are loaded onto Sarvajal ATM cards.

Selling, really?

Shah said he realizes that selling water in a country that has offered water as a public resource could appear off the mark. But delivery via the tankers is unpredictable, and it takes families time to collect water from the tankers and filter it at home.

“We looked at every alternative out there, and even if a family buys the cheapest water filter, we’ve priced it still under what it would cost them per liter,” he said. Bottled water costs 32 cents and water pouches 14 cents per liter on the street, and creates more waste than refilling reusable containers.

According to Shah, local franchise owners can earn a good living — up to two to three times what they would make for unskilled labor. While Sarvajal still owns the water filtration equipment, it takes less than a year for the franchise owners to start returning profits, he says. Sarvajal, on the other hand, doesn’t expect to profit for another five to 10 years.

Shah says Sarvajal launched as a for-profit company in part because a non-profit would have a harder time attracting technical talent.

Scaling into urban areas – with some help

Sarvajal has secured the go-ahead from the local government in the metropolitan area around New Delhi to set up some 50 filtration station-ATM units — areas without regular access to drinking water.

Because Sarvajal mostly had operated in more rural areas, it needed help. To that end, the company hired Frog Design, a consultancy that engineers and designs products and services in energy, health care and social innovation.

Jan Chipchase, Frog’s creative director of global insights, set up a team of staffers from India. They spent over a month in Delhi interviewing and observing how residents navigated securing drinking water. The group also spoke to water providers who had opened businesses related to supplying clean water.

Savda Ghevra, a resettled slum on the edge of Delhi, was the focus of the research. Frog wanted to find out the value of clean drinking water, how a delivery system would meet residents’ needs and what might arise during the implementation of an alternative system. (The extended research was funded by the Institute of Money, Technology and Financial Inclusion at the University of California-Irvine).

“A water ATM allows stored value to convert to digital credit. As the world digitizes, we wanted to find out to what extent a low literate community was willing to invest in these types of technology,” said Chipchase.

Using digital tools to store value in less developed countries is not unheard of, says Chipchase, who cited Kenya as a country where much of the population banks online.

As a result of their research – detailed in a report, “Journeys for Water” released Tuesday – Frog concluded that in the context of the current water delivery model for Savda Ghevra, the “belief that water is a right and should be free is moot. In the slum residents pay for their water in one way or another – with time and money, with their ability to move and make political choices based on their interests.”

“It’s realizing that the current practice of water tankers isn’t working from a social and practical perspective,” Chipchase said. “This project is far more about understanding politics and economics in the broader sense.”

But Frog found that despite all the advanced technology enabling a water delivery system such as Sarvajal’s to exist in a country lacking adequate infrastructure, it must give residents some ownership and control for the system to be sustainable.

Shah said his team estimates that Sarvajal needs to scale to 1,000 to 1,500 locations to break even.

Democratizing of technology

Chipchase said Sarvajal is a perfect example of how “reverse innovation” is taking place through combining “mature” technologies such as the mobile telephone system, RFID tags and sensors. “The ability to prototype is becoming mainstream. It’s not just Silicon Valley anymore.”

Shah is a CalTech and Harvard-educated Indian-American who grew up in Houston, then spent 13 years in India after college, yet most of the 120 employees at Sarvajal are Indian nationals. His team of 25 engineers developed the filtration system’s monitoring device, coined the Soochak.

Coin-operated water filtration stations exist in Vietnam and Thailand. Yet Sarvajal’s pairing of cloud-based monitoring and an ATM service appears to be unique.

Capital returns should be secondary

Shah has been contacted by the Indian division of water giant Pentair and an array of venture capitalists about potential investments. But after learning more about the company’s timeline for return, he said, they lost interest. The same thing happened, he said, with larger companies interested in moving into the space themselves.

“My response to them was you’re asking the wrong question – you should be asking how long it’s going to take to solve the problem,” he said. “We’re in this to solve the problem, not for money to be made. Things like water — where innovation hasn’t happened in 50 years – these are really big opportunities to think about them freshly from a new perspective. Returning capital should be a byproduct or a secondary [outcome].”

Middle image: Women collect filtered drinking water at a solar ATM and filtration station operated by Sarvajal. Bottom image: Sarvajal’s filtration stations are operated by local villagers and are monitored for maintenance using sensor technology. All photos courtesy Frog Design

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