Orthodox Tea food system in Eastern Nepal

University of Pavia
Department of Earth and Environmental Sciences
Course: Food Marketing

Prepared by:
Avinash Kafle
Marco Scalora
Lorenzo Colombini
December 2022

Submitted to:
Prof. Elisabetta Virtuani
Table of Contents
1. History and Geographical delimitation ....................................................................................................... 3
2. Growing methods .............................................................................................................................................. 3
2.1 Nursery............................................................................................................................................................. 3
2.2 Planting ............................................................................................................................................................ 3
2.3 Training of young tea...................................................................................................................................... 3
2.4 Harvesting: ...................................................................................................................................................... 3
2.5 Processing: ....................................................................................................................................................... 3
2.5.1 Withering: ..................................................................................................................................................... 3
2.5.2 Rolling: .......................................................................................................................................................... 4
2.5.3 Fermentation/oxidation: .............................................................................................................................. 4
2.5.4 Drying: .......................................................................................................................................................... 4
3. Species/Varieties, chemical and organoleptic characteristics.................................................................... 4
4. Administrative contest: public authorities, funding system: ..................................................................... 5
5. Production: ..................................................................................................................................................... 5
6. Economic and rural development: ............................................................................................................... 5
7. Export orientation: ........................................................................................................................................ 6
8. Collaborative network for sustainability: ................................................................................................... 6
9. Mapping Value Chain Assessment: ............................................................................................................. 6
9.1 Marketing margin for tea producers ....................................................................................................... 6
9.2 Market margin for local traders and cooperatives ................................................................................. 7
9.3 Market margin for tea processors ............................................................................................................ 7
9.4 Market margin for exporters .................................................................................................................... 7
10. Production structure and marketing management ................................................................................ 7
11. Culture and Eco-tourism: ......................................................................................................................... 7
12. Strategic orientation: ................................................................................................................................. 8
13. Final considerations ................................................................................................................................... 8
Bibliography .......................................................................................................................................................... 9
Appendix: ............................................................................................................................................................. 10
1. History and Geographical delimitation
Tea is considered as an oldest beverage and is also recognized as the most widely consumed drink (Beverage) in
the world after water. It is believed by historian that the first tea bushes in Nepal were grown from seeds which
were given as a gift by the Chinesh Emperor to the then prime Minister of Nepal Junga Bahadur Rana. In 1842,
Colonel Gajaraj Singh Thapa planted tea first Time in Illam District in 1860s.
Nepal covers about 0.1 percent of total world land area, but has 136 ecosystems. It ranks 25th in the world in
terms of bio-diversity and has every climatic zone in the world. It has suitable climate and geography for tea
cultivation. Warm and humid climate with plenty of rainfall and long duration sunlight is best for the effective
growth of tea bushes. Soil with pH value ranging from 4.5 to 5.5, good drainage facility, good water holding
capacity and ample organic matter and soil depth. Tea is a deep-rooted plant and its roots penetrate through all
strata of soil and hold the soil strongly. Nepal's middle and eastern Himalayan corridors are endowed with several
qualities related to soil, climate, topography, temperature, and humidity for organic tea production. The higher
the elevation of the land, the slower the tea will grow, resulting in a complex flavor (NTCDB, 2017)

2. Growing methods
2.1 Nursery
Vegetative propagation is carried out for clonal multiplication while bi-clonal seed stocks are propagated through
seeds. The tea nursery should be located near a perennial water source with about 33% sunlight at midday.
Polythene sleeves with a dimension of 30×10 cm are used for filling up the sandy loam/clayey loam soils. The
lower three-fourths of the sleeves may be filled with jungle top soil with appropriate proportions of sand to make
it a sandy loam. The top one-fourth portion of the sleeve should be filled with the rooting medium. Both the soils
should have a pH of 4.5 to 4.8 and EC below 0.05 dsm-1. One leaf and an inter-nodal cutting with an axillary bud
prepared from the ‘aperiodic shoots’ arising from pruned tea bush is planted in the nursery sleeve and covered
with a polythene sheet of 400 gauge. April / May and August / September are the most suitable months for planting
in nursery. The plants are allown for 6-8 months in the nursery and then transferred to the open space for
hardening. Hardened nursery plants are transplanted in the field.(UPASI TRF, n.d.)

2.2 Planting
It should be carried out in the month of June where the areas receiving south-west monsoon and during August
in the north east monsoon zones. About 13,000 plants are planted in one hectare following double hedge system
of planting (spacing: 135 X 75 X 75 cm). One year old plants are planted in pits with dimension of 30 X 45 cm.

2.3 Training of young tea

Three to four months after planting, apical dominance is arrested by cutting off the leader stem. This operation,
called centering (or decentering), promotes the growth of axillary buds and lateral branches are formed. Formative
pruning (branch formation pruning) is carried out at the end of five years after planting. The recommended
pruning height for formative pruning is around 45 cm above ground level.(UPASI TRF, n.d.)

2.4 Harvesting:
Only the top two leaves and bud from each branch are picked at the precise moment when they are
budding. Plucking interval for hand plucking may vary from 9 to 13 days in different seasons.(UPASI TRF, n.d.)

2.5 Processing:
Orthodox production involves hand processing of tea leaves and comprises five steps: withering, rolling,
fermenting and drying.

2.5.1 Withering:
The tea leaves are spread out after harvesting in large withering troughs, for anything from eight to twelve hours,
depending on the climate. During this time, the leaves lose up to 60 per cent of their moisture.
2.5.2 Rolling:
The leaves are carefully rolled in large machines for up to 30 minutes, depending on the variety. This breaks down
the cell walls and releases the juice from the leaves, which combines with oxygen in the air to initiate the
fermentation process, also called oxidation.

2.5.3 Fermentation/oxidation:
This lasts between two and three hours, and results in the tea leaves turning a reddish color. At this stage the tea
develops its distinctive aroma, and the length of oxidation will ultimately dictate the color and quality of the tea.
Less-fermented tea is paler in the cup, and lighter on the palate, while strongly flavored dark teas are fermented
longer.

2.5.4 Drying:
Moisture is removed from the leaves so that, by the end of the process, only three per cent of their original
moisture remains. This takes place at a temperature of 90 degrees Celsius and takes about 20 minutes.

3. Species/Varieties, chemical and organoleptic characteristics

Mainly three species of tea are cultivated: (1) Camellia sinensis var. sinensis, (2) Camellia sinensis var. assamica,
and (3) Camellia sinensis var. lasiocalyx. Among these three species first two species are cultivated in the larger
area. Mostly Camelia sinensis var. sinensis is planted for orthodox tea, whereas Camelia sinensis var. assamica
and Camellia sinensis var. lasiocalyx for CTC (crush, tear, and curl).
Orthodox tea producing districts are Ilam, Panchthar, Dhankuta, Terathum, Solokhumbhu, Udayapur,
Sankhuwasava, Bhojpur, Morang and Udayapur in the eastern part of the country. (NTCDB, 2017). “Orthodox’”
also refers to “traditional” or “hand-processed” tea. Mainly orthodox green, orthodox black, white, and oolong
are produced in Nepal. Orthodox tea produced in the hills for export regarded as strong engine for income
generation and poverty reduction for farmers especially in rural areas. Orthodox tea is from camellia sinensis
variety tea bushes which has been processed using so-called “orthodox” production methods. It is to be contrasted
with CTC tea which, in Nepal, is produced using camellia assamica variety tea bushes and processed using the
cut, tear and curl production methods (CTC).
Four categories with regards to its processing techniques:

3.1 White Tea:

It is made from the baby plant only in a specific time in the spring and undergoes virtually no processing. White
tea consists of highly nutritious tip of the plant, which also makes it the tea with the least amount of caffeine. The
dried buds have tiny white hairs, which give them a silver-like appearance. The color of white tea is generally
pale light gold. They retain unique floral, jasmine aromas with taste notes of mildly sweet honey. High amounts
of anti-oxidants and threonine and least amount of caffeine (a rare amino-acid found in high quality teas) are
proven to promote good health, prevent damage cells and fight aging signs.

3.2 Green Tea:

Green tea undergoes minimal oxidation in tea processing which helps in retaining the plant’s natural appearance
and color. The tea leaves are withered until they become soft and flaccid then immediately fired and/or steamed
to halt the oxidation process. The structure and shape is determined by continuously rolling the tea leaves.
Polyphenols promote weight loss. Antioxidants called catechins present in green tea are proven to fight and
prevent cell damage antiviral and antibacterial regulate glucose level.

3.3 Oolong Tea:

Oolong tea is the mid-point blend between black tea and green tea in terms of oxidation. It is semi-oxidized and
hence produces the characteristics of both green and black tea Reduce plague in the arteries and lower cholesterol.
Weight-loss agent
3.4 Black Tea:
It is generally more oxidized than green, oolong and white tea cardiovascular benefits .Antioxidants (especially
theaflavins & thearubigens) present in black tea have cholesterol-lowering abilities. (Luxury Organic and Eco-
Friendly Shop and Blog, n.d.)

4. Administrative contest: public authorities, funding system:

From 1860s to 1995s, major plantations were used to be under government control especially in Ilam town,
Kanyam, and almost 100 small-scale farmers in the Fikkal region. Nepal Tea Development Corporation was
established in 1966 by government of Nepal. National Tea and Coffee Development Board (NTCDB) established
on 1993/06/02.(NTCDB, n.d.) After 1995 the board privatized the sector, since privatization, production and
export of tea have increased significantly, with nearly 6,900 tea farmers on the books (NTCDB, 2009). In 2007
Nepal became a member of International Tea Committee (ITC). Then after INGO like USAID, DFID, DANIDA,
JICA, GTZ, HEL VETAS, Winrock International are funding and providing technical support. The government
had allocated a budget of Rs40 million for the promotion of the tea sector last year but it was not utilized due to
the pandemic 2020.

Some firm organization that have significant role Orthodox Tea food system:

Himalyan Orthodox Tea Producer's Organisation (HOTPA- Nepal) Bakhundole, Lalitpur Chairman: Deepak
Baskota, Jhapa Chairman: Suresh Mittal, Nepal Tea Association, Chairman: Kamal Mainali Kathmandu,Central
Tea Cooperatives Federation (CTCF), Govinda Dahal, Illam, Executive directive of NTCDB Dr. Bishnu Prasad
Bhattarai(NTCDB, n.d.)

5. Production:
The below mention list and figures are the total orthodox tea production (5,911,850 kg) and the district (9) with
area and the number of farmer in 2020/2021 Nepal. All of the above mention district belongs to eastern hill of
Nepal. Total estate plantation area was 2,728 ha while the plantation area of small farmers was 6,223 ha.

Fiscal District No, of Estate Small Small Orthodox

Year Esatates Plantation Farmers Farmers Production (kg)
2020/2021 Area (ha) (No.) Area (ha)
1. Ilam 36 1864 8876 5372 5840360
2. Panchthar 5 213 791 462 37218
3. Dhankuta 4 236 323 147 27500
4. Terhathum 0 0 356 123 4990

5. Bhojpur 1 51 22 57 150
6. Sankhuwasabha 2 48 112 32 312
7. Solukhumbu 0 0 110 10 35
8. Morang 1 16 22 8 1210
9. Udayapur 1 300 735 12 75
Source: (NTCDB, n.d.)

6. Economic and rural development:

Tea is one of the major economic sectors that engages rural labor intensively, mostly women. All throughout the
year it has great importance on employment and helps redistribute urban income to the disadvantaged segments
of society. During the specialty tea production season, family members in rural households are busy in green
fields plucking in the daytime, and then sorting the same leaves until late evening at home. In this way, some
women are earning up to 25 to 30 thousand Nepalese rupees a month. It helps support development of education,
maintaining the livelihood and socio-cultural networks for the small farmers and tea laborers. Tea as one of the
major market-led cash crops of Nepal—is in the process of becoming an effective means of social transformation
(Narendra Kumar Gurung, n.d.)

7. Export orientation:
Nepal's orthodox tea received its own trademark September 2020, 157 years after the country started growing it,
and many growers were hopeful that the move would carve its niche in the international market. Along with Ilam,
tea producers from Panchthar, Tehrathum and Sankhuwasabha districts have received a trademark or logo named
'Nepal Tea Quality from the Himalayas'. Nearly 80 percent of orthodox tea is exported to India. Rest of the
market for the Nepalese orthodox tea includes Germany, the Czech Republic, the Russian Federation, China,
France, the United States, Japan, Canada, and Ukraine (ITC, 2017) The use of collective trademark in tea that is
being exported to different countries will guarantee proper production, processing, and packaging of Nepali tea
in the international market. For Nepal, India (Darjeeling), Sri Lanka,China, Bangladesh, and Chinese Taipei are
the major competitor in orthodox leaf grade. Compared with Nepal, these countries have better quality
management (QM) and certification practice.(Utama, 2017)

8. Collaborative network for sustainability:

Until the mid-1990s all tea used to export to India for processing, In 1994 the first two factories in Ilam were
started and small amounts were exported to German buyers (Rana 2007).In 1998 an organization was created to
represent and coordinate the interests of the factories – HOTPA, the Himalayan Orthodox Tea Producers’
Association– which was sustained by member dues paid by the factory-members. By 2003, several other
processing factories had opened, development organizations including JICA and Winrock International were
active in the sector, and a Tea Development Alliance was formed to coordinate work in the sector. In 2006, in
order to complement HOTPA’s coordination role with income generation activities, a marketing body was created
– HIMCOOP, the Himalayan Orthodox Tea Producers’ Cooperative. Discussions within HOTPA, the Tea
Development Alliance, and HIMCOOP had focused on two main challenges between 2000 and 2005. Firstly, in
order to capture more value-added in the chain, the sector needed to bypass middlemen in Darjeeling India that
were buying tea from Nepali factories and re-exporting it at a premium under their own well-known tea brand. In
order for Nepali tea to be sold directly to overseas buyers, through improving brand recognition and
internationally. Secondly, the use of banned pesticides had to be curtailed. To reduce the risk of rejection of
shipments of Nepali tea, and improve its reputation, a national tea Code of Conduct (CoC) certification scheme
was developed. It had four components: respect for nature, which requires that farmers reduce pesticide bring
chemical use to zero within third year; respect for people, including reducing child labor; transparent processes,
including making factory’s sales easier for farmers to understand; and assured quality, including encouraging the
plucking of two leafs and a bud of tealeaf. Farmers, participating factories, and NGOs implemented the CoC
scheme at a field level. Factories offered to pay a small premium on CoC tea leaf; a competent auditor was hired
to inspect the compliance with the standard; trainings were provided by NGOs; farmers kept record books; they
reduced pesticide and fertilizer use; and factories stamped tea produced along CoC-certified production lines with
the CoC logo. Many farmers decided to convert to organic, particularly on the basis of higher price promises and
increased demand in the future.(Mohan Sarah, n.d.)

9. Mapping Value Chain Assessment:

9.1 Marketing margin for tea producers

The production cost of certified and non-certified green tea leaves was NRs. 35.79/ kg and NRs. 25.79/kg,
respectively. The premium price of green tea leaves was higher in certified tea (NRs. 60/kg) than non- certified
tea leaves (NRs. 40/kg.
9.2 Market margin for local traders and cooperatives
Local traders and cooperatives were involved in collection and delivery of green tea leaves to the processing
factories. The local traders had their own network of several green tea leaves collectors and colleting green tea
leaves to the road heads and enjoying with additional margin of NRs. 7/kg of green tea leaves. Whereas tea
growers delivered the green tea leaves to cooperatives, received additional NRs. 5/kg of green tea leaves. At the
end of season, they received the NRs. 3/kg bonus from factories and distributed NRs. 2/kg of green tea leaves to
tea producers and NRs. 1/kg to cooperatives as well.

9.3 Market margin for tea processors

The processing factories played important role in value chain of orthodox tea. For the production of 1 kg orthodox
tea, it requires 4.5kg of green tea leaves and equal to NRs. 270 for green tea leaves; and it required NRs. 150 for
fuel and administrative cost. The production cost of orthodox tea at factory level was NRs. 420/kg. The
assembling, transportation and tax included a total of NRs. 7/kg of orthodox tea. The profit margin to processor
was NRs. 213/kg of orthodox tea and the wholesale price of at processor level was NRs. 640/kg.

9.4 Market margin for exporters

The owners of the processing factories are involving in exporting orthodox tea in international
Markets. At the point of export Jogbani, India, the exporting price was NRs.727/kg orthodox tea. The price of
orthodox tea at Rotadrum, Netherlands was NNRs. 1077/kg and the gross marketing margin to exporter was NRs.
350/kg certified orthodox tea.(Utama, 2017)

10.Production structure and marketing management

Tea production structure is manual but due to scarcity of labor sometimes tea cannot be obtained in time. So, the
quality of Nepali orthodox tea lags behind that of its competitors, including fine Darjeeling, Taiwanese, and
Chinese teas. Because of the difference in the quality of their tea, farmers in Nepal – even if they grow organic
thus earn less per kg of tea leaf than farmers in Yunnan or other elite growing areas. Two-thirds of organic factory
production is rejected by the developed country buyer and must be sold in low-value markets, for lower prices.
The farmer must grow all his or her crop at organic costs, but is reimbursed at the higher rate for only a portion
of their crop; the factory must process all of the tea according to high-value market’s requirements, but sells half
of the product or less at high-value organic international market rates. Some INGO and NTCDB are giving
technical training but still result show it is insufficient. Quality is mostly relevant at growing, plucking,
transportation, processing, and packaging stages of the chain. International certification increasing recognition of
Nepal tea brand, good aroma is itself a quality factor of tea which increases its marketing, world demand is in
ever increasing trend. While few problems in market management are Nepalese producer are still reliance heavy
in Indian market and it has inconsistent import policy, we have quality inconsistent, Inadequate market
information system, lack of auction facility, absence of central warehouses, sometime high maximum residue
limits (MRLs) is also seen.(Kalauni et al., 2020)

11.Culture and Eco-tourism:

Fundamental attraction of eco-tourism of Eastern Nepal are natural sceneries, pleasing weather, short trekking
routes, tea estates, small hills with greeny forest, snowcapped mountains and hospitable people. In addition to
astonishing landscape some of the best tourist destination of eastern Nepal are Mai Pokhari, Antu Danda
(hill),Sandakpur, Kanyam and Fikkal (Phikkal Bazaar), Hangetham and Choyatar Forest: Mai Pokhari is
considered a holy pond dedicated to Goddess Bhagwati. Annually a fair is held between October and November.
We can get to some rare species of animals like red panda, musk deer (Kasturi), porcupine, leopard, jackal, and
many others while Antu Danda is famous for spectacular views of the Terai (plain) region, sunrise and sunset and
Sandakpur for majestic views of the world’s highest mountains like Mt. Everest (8,848 m) thick pine and conifer
forests, and tea gardens that lie down below Antu. Himalayan musk deer and red panda, Himalayan monal.
Kanyam and Fikkal have tea shrubs that have been planted more than 140 years ago and famous for its tea
landscape. Similarly, Hangetham and Choyatar Forest is known for housing animals like red panda, leopard, thar,
charibag, black bear, thakthake, rajpankhi and birds like munal, eagle, kandevaccur, and many others. Its varying
weather conditions, dense fog, and the incredible views of Ilam is also another reason to visit.(Visit Nepal Blog,
n.d.)

12.Strategic orientation:
Farming cooperatives were being used by farmers to improve their market power. Cooperatives are the agents of
innovation, searching out factories to pay more for leaf, investigating opportunities for certification, and finding
funding for new collection centers and technologies, and working at the cutting edge of ecological tea farming.
In reaction to the deficit in processing capacity in some parts of Ilam, farmers are starting up their own small
processing factories or hand-dryers i.e. functional upgrading .Farmers are doing this in the hopes of capturing
more of the profits (rents) in the chain. In reaction to labor scarcity, farmers are trying all sorts of innovative ways
to access labor. Some use the community labor rotation system. (NTCDB, 2017)

13.Final considerations
The present tea cultivation areas are much lower than the total feasible areas. We should fully explore the total
areas and convert more land for tea cultivation. Diversification is the newly developed orientation there is a large
room to work on. The minimum support price policy can help to address the problem of farmer, the rejection of
their orthodox tea after organic production cost base on quality assurance. The problem of use of banned
pesticides, lack of organic manure and lack of adequate technical knowledge must be address by working in
collaboration between local government, provincial government and NTCDB. It seems that there are still too
many different certification schemes Involved in governing the tea value chain like organic CoC, HACCP,
Rainforest Alliance, Fair Trade, and Global Gap standards. Factories, cooperatives and farmers have to pay
multiple compliance costs, including formal certification fees as well as conversion and training costs. This cause
economic loss and time wastage, single certification schemes program for exporting to every nation is to be focus.
Quality, it’s everything. The raw material is number one; the processing number two. At the factory level, norms
for professionalism could be disseminated amongst factory owners and managers, including through training,
improved technology, and better management techniques. National Tea and Coffee Development Board
(NTCDB), industry, and development agencies should work in collaboration to make an impact on the quality of
Nepali tea, and price, invest in policies that support farmers’ own strategies. In factories, making grading rules
more transparent, building links to factories in well-established areas, including Darjeeling and China, and learn
from them, provide stronger incentives to deliver high-quality tea leaf, enhance knowledge of the global tea
market and the position of Nepali tea within it. And the government should facilitate labor migration into the tea
sector, provide a stable working environment, and encourage coherent policy-making across tea sector actors.
The tea food system of Eastern Nepal has a long history and glory, now it’s time to modernize it as a Nepalese
identity for the rural economic transformation.
Bibliography

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2022, from https://www.natural-organic-living.com/natural-organic-living-story/organic-nepal-tea/
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Appendix:

Map of Nepal

Eastern Nepal
Value chain Map
Source:(Mohan Sarah, n.d.)
Antu Danda (NTCDB, n.d.)