The production of sustainable organic tea costs the producers and importers more than the production of conventional tea OR SIMPLY CERTIFIED ORGANIC TEA.
The producers have higher costs for:
- the setting and development of a sustainable, ecological agricultural system,
- the implementation of quality management systems and their certification,
- the observance of European and US-American regulations on organic production,
- fees for organic audits and the certification of agriculture production and processing,
- fees for the issuance of organic export documents by the control bodies,
- sustainability certifications like Fairtrade, UTZ, Rainforest Alliance, et al.,
- the adherence to social standards and labour law like the payment of a minimum wage,
additional personnel for the extra manual work in organic farming,- laboratory analyses of the tea for chemical residues of pesticides and environmental chemicals,
- additional personnel and higher administrative costs for necessary organic documentation,
- the breeding of cattle, pigs, goats, chickens, ducks etc. for the production of high-quality compost (organic fertiliser) as natural nutrient supply,
- additional personnel for animal breeding and compost production,
- the acquisition of animal feed, construction of stables, compost machines and production sites,
- the planting of shade trees.
Additionally, profit cuts for the producers are caused by:
- the withdrawal of chemical fertiliser,
- the decrease in processing quantity through the abandonment of parallell processing of conventional tea in the tea factories.
Importers and trade enterprises also face higher costs for:
- fees for inspections and various certification procedures and licenses, which arise equally for importers and traders,
- additional personnel and higher administrative costs for necessary organic and certification documentation,
- laboratory analyses of the tea for chemical residues of pesticides and environmental chemicals,
- qualified consultants (and their travel expenses), who support the plantation in their sustainable development on a long-term basis,
- container inspections for product safety and control of product origin.
All these costs have to be added to the production costs of organic tea and included in the price calculation for the product.
According to past experience, depending on the development status of the tea garden and the processing factories, the production of sustainable organic tea is at least 100 percent more expensive than the production of conventional tea, with an increasing trend. Depending on the development status and the marketing opportunities, the costs can increase so much that the producers cannot work cost covering when they have to sell at competitive export prices. In case a producer cannot sell its organic tea completely and the tea has to be exported as conventional tea, then the producer will merely realise an export price that even doesn’t cover the production costs.
Updated 5 December 2022