The term plantation is informal and not precisely defined. A plantation is a large artificially established forest farm where crops are grown for sale in distant markets rather than for local consumption. In Indian context, it includes tea and coffee (beverage), coconut, arecanut and cashew (nuts), pepper and rubber. Of all these plantations, the tea industry has steadily prospered all through the years and is making good profits even in the days of downturn.
When the holding belongs to a single individual, the person may be called a planter. The term “planter” has no universally accepted definition but it is identified globally with an elite class, “a landowning farmer of substantial means” but not so in India. The total coverage of plantations in India is comparatively less and mostly confined to small holdings. Plantation crops have been continuously facing the lack of investment and depressed yields and are in great need of modernisation. The conditions of labour in plantation economies have always been a matter of concern. Coercion and super-exploitation have sometimes been the characteristics of plantation economies.
If planters have not benefitted adequately from the rising prices of coffee, tea and spices, it is because most of the returns in this sector are skewed towards the latter stages of the value chain. A value chain has been defined as a full range of interrelated productive activities performed by firms to bring out a product from conception to complete production and delivery to final consumers.
Conversely, activities early in the value chain including production or extraction of commoditised plantation raw materials have declined in relative importance. The share of value in the final product has diminished and the bargaining power of those who carry them out has been reduced.
There are several ways to shift more of the profits to the people who actually grow these plantation crops. With the tendency of product differentiation, the share of overall returns has been shifting more and more towards the latter part of the chain and those business activities which underscore differentiation such as design and marketing.
Some Indian corporations realised the trend quite early, leading to the acquisition of a few global brands in tea markets. Corporations mean-while are growing in size and influence in the plantation sector, leading to significant concentrations of power. The result is value chain dominance by certain types of large plantation owners and corporations.
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