o4 MONTHLY. Po 
Vol, XVIII.] 
COLOMBO, AUGUST 1st, 1898. 
[No. 2. 
[The following paper on Tea production lias a 
good deal of interesting matter in it and of course 
a deal that doesn't in any way ajiply to Ceylon ; 
but I think it might well go into your Tropical 
Agriculturist because of its criticism of London 
charges, and other items of general interest.— 
Practical Ceylon Planter.] 
THE PRODUCTION OF TEA, 
CHEAPENING THE COST. 
(A Paper read by the Shcbetary before tub Kan- 
GitA Tea Associatiox.) 
I HE keynote of the current con- 
dition of the Indian tea In- 
dustry is struck in the follow- 
ing passage excerpted from the 
commercial article of an Indian 
daily newspaper: — 
" The first tea sale of the 
season was held on the 20fch 
of May, and the result was far from satisfactory to 
planters. I am told that not one invoice will cover 
the cost to the grower." 
The tea industry of India is entering on a crisis 
dne chiefly to the artificial rate up to which ex- 
change has been rigged by Government. Had there 
been no interference with the Indian currency, otir 
industry would probably at this moment have been 
in a highly flourishing instead of a critical condi- 
tion. As matters stand it is simply being ruined by 
what, is in practice an overwhelming export duty 
compai-ed to wbich the Hhin of China is merely a 
mild fee. Moreover, her unfettered freedom of ex- 
change is enabling China to keep up competition 
with ua in the tea market, for she gets the full silver 
value of her produce, which India does not. Time 
was, as members of this Association are aware, when 
we reconed our profits at eo many pence per pound 
of tea, and four pence or five pence was a result 
obtained by several. But now it has come to pass 
that we estimate our gains (if there are any) by 
farthings, and five farthings a pound is probably the 
utmost limit of our profit. Under these completely 
changed conditions, and facing a market which only 
makes about Ihd. difference between our Broken 
Pekoes and our Souchongs, and gives us just one-third 
the price for our tea that it did twenty years ago, 
it is scarcely to be wondered at if planters despair 
of improving prices. The average value of Kangra 
Valley tea sold on the public market during the 
past two seasons has been about 7jd. per lb, 
The problem, therefore, for us to solve is how to 
make tea pay a profit. It can only be done by re- 
ducing the cost of production, for I take it that after 
many years of fruitless effort we are persuaded it is 
beyond our power to appreciably improve the general 
standard of our teas. 
Accepting then 7Jd. as the marked value of the 
article we produce (and devoutly praying that it 
may be maintained), to find room for a margin of 
profit, we must investigate our cost of production, 
the factors in which are as follows - 
1. Plantation expenditure, 
2. Agency and Garden Stores. 
3. Interest on advances. 
4. The rate of Exchange. 
.5. Road and rail freight to seaport. 
6. Shipping charges and steamer freight. 
7. London Dock and Warehouse charges. 
8. Sales charges, brokerage and commission. 
9. Trade taxes. 
1 and 2 plantation Expenditure, Agency and Garden 
Stores. — These are matters which individuals must 
deal with for tliemselves, and we can only start on 
the assumption — perfectly justified in most instances 
— that the utmost care and economy have brought 
down expenditure under these two heads to the 
lowest level compatible with the proper upkeep of 
plantations. As a basis to work on we may take 
this expenditure at 4d. per lb. at the plantation and 
fd. per lb. for Agency and Garden Stores — an esti- 
mate based on actuals. 
3. Interest on Advances. — Twelve per cent, is the 
lowest current rate of interest. This is of course a 
usurious rate. The bank rate in London (unusually 
high at the moment) is 4 per cent. A substantial 
industry like tea should be able to borrow at 6 per 
cent. That it cannot do so is due to the dearness 
of money, occasioned by the currency policy of the 
Government of India. Nearly all tea gardens want 
financial assistance: the extent of their necessity 
may be assessed at one quarter of their annual 
working expenses. At 12 per cent, intereit their 
advances will probably cost them 'OBd. on each pouud 
of tea produced, which is "OSd. more than they ought 
to pay. Of course this is a matter in which the 
planter is helcless. But ho should not suffer in 
silence. On the contrary, he ought to raise hie voice 
and join loudly in the chorus of protest which all 
commercial India is sending up against the proposed 
contraction of the currency of the country which 
must tend to increase the dearnes* of money. 
