By the summer of 2013, the project appeared stalled. It was moving ahead in fits and starts, Rajah said in his office. “But [it] may not happen within my lifetime.” He seemed downcast. Or maybe just realistic. He would be risking everything that he had built up over the last forty-five years. Other estate managers in Darjeeling saw his plan as completely impossible without a well-established, cooperative system already in place. “Makaibari wouldn’t last six months,” said one.
A year later the idea had been completely discarded. In June 2014, Rajah Banerjee sold a nearly 90 percent stake in Makaibari to the Kolkata-based Luxmi Group. The Times of India valued the much coveted (and highly secretive) deal “in excess of Rs 20 crore” (Rs 200 million, about $3.5 million).11 He is in his mid-sixties; his sons seemed little inclined to take over; he felt that a decision on the garden’s future needed to be taken. Banerjee, who created and enshrined the legend of Makaibari, will remain at the helm as its face and chairman until he retires.
The Luxmi Group owns seventeen tea estates in Assam and the northeast of India that produce 15 million kilograms of tea a year, more then double all of Darjeeling. These will no doubt benefit from their association with Makaibari and its first-rate reputation. The group is heavily into real estate development and owns Obeetee, the largest manufacturer and exporter of handmade carpets in India. The new owner’s financial soundness will help Makaibari weather the current situation in the hills, while an injection of cash to strengthen brand awareness and increased distribution will bring its teas to more customers. In September, it privately sold a twenty-kilogram lot of Silver Tips Imperial plucked during the June 2013 full-moon night just before the summer solstice for $1,850 a kilogram (Rs 1.1 lakh) to a trio of specialty Makaibari retailers in the United States, the United Kingdom, and Japan. It was an auspicious start. But while the new owners inherited Makaibari’s iconic status, they have also taken over the challenges of getting workers into the fields to pluck the celebrated leaves.
Others in the hills continue to believe that the 150-year-old structure of Darjeeling’s tea gardens needs to be completely overhauled. Something must urgently be done, argues Rishi Saria, whose family owns and runs two Darjeeling estates. “I don’t see many gardens surviving in current form.”
While some management would be open to implementing an entire new system for compensating workers, they often complain that the mind-set in the Darjeeling hills is entrenched and not open to large changes. Any move would need the workers’ agreement and the government’s approval. These are often overlapping. Labor and politics here are deeply intertwined: “Those who rule the tea gardens, rule the hills,” goes a local maxim. “They’d rather see eighteen, twenty gardens shut than make any changes,” said a tea executive.
From a proprietor’s point of view, two main issues stand out: the heavy substructure of the estate, with a large number of workers who have little accountability; and having to provide rations. “We are a modern society now,” said one Darjeeling planter. “Why should we be giving them rations? They should be buying in ration shops. The British had to because there was no food. But nothing has moved on.” Even monetizing this part of the compensation continues to be highly controversial. Many garden workers see any discussion of this during labor negotiations as a way for the estate to pay them less. “They take away the rations and there will be revolution,” Rajah Banerjee warned.
Saria sees the employee-owned-and-run Kanan Devan Hills Plantation (KDHP) in southern India’s Western Ghats as a successful example of looking through Banerjee’s “alternative window.” Allowing workers to be shareholders party to an estate’s decisions and rewards might be the only way out of Darjeeling’s labor crisis.
KDHP consists of seven large gardens that cover twenty-four thousand hectares (sixty thousand acres) and produce over 23 million kilograms (50 million pounds) of CTC (nearly three-fourths of the total), orthodox, green, and organic teas. Planted out in the 1870s, it runs across the picturesque hills around Munnar in Kerala. After the Foreign Exchange Regulation Act was enacted in the 1970s and restricted foreigner ownership, the British proprietors partnered with the Tata family, who eventually acquired the plantation fully in 1983. By 2000, though, it was a losing venture, and after four consecutive years in the red, Tata decided to reduce its exposure in the plantations themselves and focus on the marketing and selling of their branded teas.12
But Tata didn’t want to close the plantation outright. When a three-month trial of a cooperative system on one of the estates showed little promise—management was turned over to a group of employees who were completely in charge of the decision making process—an employee buyout was proposed, and the board accepted it. Skeptics saw it as a clever ploy by Tata to pass off a loss-making plantation.13
On April 1, 2005, the Kanan Devan Hills Plantation Company was formed. Nearly all of the 12,700 employees became shareholders in a 69 percent ownership of the company. Tata retained an 18 percent stake, with the remaining shares held by a welfare trust and ex-Tata employees. There is a professional management team and board of directors, with employee involvement coming through numerous committees. These range from those on the grassroots level and those dealing in operational details to others being active in decision making and as members of the board. Each year, the best worker and the best staff member are appointed to the board of directors. When the top plucker was tapped, she became the first woman employee to sit on the board.
The change was immediate. Productivity shot up 24 percent in the first quarter alone, which the managing director and mastermind of KDHP, T. V. Alexander, attributed to the perfect combination of restructuring, good weather, and worker enthusiasm.14 Even once the initial excitement had faded, productivity continued to climb, from 33.3 kilograms per worker per day at the time of the handover to 52.6 by 2009–10. In 2014 it was 49.7 kilograms, an impressive number given the climatic conditions that prevailed that year.
“This feeling that the company belongs to them has brought a greater sense of commitment and responsibility,” Alexander said in 2010.15 Workers tend to keep an eye on their fellows and look for ways to cut costs and boost profits. While Darjeeling was suffering unauthorized absenteeism of over 30 percent, at KDHP it was only 10.88 percent for 2013.
The new venture also turned a surprisingly quick profit. When the plantation changed hands, it was running an 8 crore loss (Rs 80 million, or $1.8 million). In 2008–09 there was a net profit of 12.5 crore (Rs 125 million, just under $3 million), and for 2009–10 a profit of 40.48 crore (just over Rs 400 million, about $9 million). For 2013–14 the profit was Rs 15.55 crore (about $3 million).
Such profits have meant strong bonuses, capital appreciation of the shares (the Rs 10 shares are now worth about Rs 50), and dividends, which paid 14 percent in 2005–6, 25 percent in 2008–9, and 50 percent in 2009–10.16 (From 2005–2006 through 2012–2013, there was a total of 159 percent pay out.) Within just three years, the original investors had a quick return on their money.
Since the plantation’s reboot, social services have been a key part of the KDHP mission—from the three hundred Self Help Groups comprised of over five thousand women employees to offering aid in generating additional income to rice purchased in bulk directly from mills and offered at cost to the workers—along with sustainable farming practices. These efforts were rewarded in April 2014 with a coveted certificate from the New York–based Rainforest Alliance, with its green-frog seal, for following ten principals that range from social management to soil conservation and integrated waste management.