The tea estates being revitalised in the mountains of Darjeeling

In northern India, the Ambootia Tea Group (DOTEPL) is using social impact investment to boost financial security and improve the livelihoods of its employees.

Tea pickers from Oikocredit social enterprise partner, Ambootia. Darjeeling India. Photograph: Opmeer Reports.

 

In India, tea estate owners are legally obliged to support their employees by offering them basic necessities such as housing, social care and fair wages. Yet when these plantations fail, owners often abandon them, leaving the farmers and their families with nothing.

In the northern mountains of India lies Darjeeling, a region known for producing high quality teas of the same name. The first commercial tea plantations in Darjeeling were established in 1852 and more than 100 estates followed. Although the number has now fallen to around 87, the Darjeeling tourism board estimates that around 200,000 individuals are wholly dependent on these estates.

Tea pickers going about their work on the Ambootia estate, India. Photograph: Opmeer Reports.

 

Against this backdrop, international social impact investor and co-operative Oikocredit has invested in social enterprise partner the Ambootia Tea Group, a family business and co-operative that acquires struggling tea estates in India. Ambootia apply organic and biodynamic farming techniques and provide their employees with secure livelihoods, fair wages and help with housing, food, clothing, education and medical treatment.

Over the past 12 years, Ambootia (also known as Darjeeling Organic Tea Estates Private Ltd) has acquired 12 of the 87 Darjeeling plantations and has become internationally renowned for its high-quality teas. It focuses on producing great tasting teas and improving the lives of its employees – ensuring that fair wages are a priority in a country where more than an estimated 18 million people are paid unfairly.

Beyond ensuring the financial stability of their employees, Ambootia provides staff with housing, food, fuel, footwear, protective clothing, winter blankets and basic, free medical treatment.

Free milk is distributed through the infant nutrition programme, and social security includes provident and pension funds and support for dependants.

Ambootia also focuses on educating the next generation by providing free primary education so that children can go to school instead of working alongside their parents as child labourers.

Most of the tea picking on the Ambootia estates is undertaken by women and the company places a strong emphasis on enhancing female economic empowerment.

One of these women, Priti Thapa, an Ambootia employee, cares for a household of six people with her husband, a driver. She picks tea for eight hours each day – minus lunch and tea breaks – while her daughter attends the school on the estate. Priti also takes advantage of an income augmentation programme, which provides her with the tools and resources to make additional income from growing vegetables and breeding cows, pigs and chickens.

Priti Thapa, Ambootia tea employee, on her vegetable plot, India. Photograph: Opmeer Reports.

 

Tackling poverty with tea

Oikocredit chose to become an equity investor in Ambootia because of its strong blend of a solid business plan and commitment to employee welfare.

Speaking about the plight of smallholder farmers, Thos Gieskes, Managing Director, Oikocredit, says: “Essentially there is a whole value chain between the farmgate and the supermarket. One of the fundamental solutions to ensure that farmers get a better reward for their product is to connect them better into that value chain, so they can capture more of the value that is created in that value chain. Because they tend to be small, they just get marginalised by the next step above them in the chain. There are people in those value chains who make a lot of money. That’s why co-operatives are so important in the agriculture space – they allow farmers to unite and get a better bargaining position in the chain. What Oikocredit wants to do in general, it is to work with people at the bottom of the pyramid – to give them the opportunity to rise out of poverty in a sustainable way.”

Bharat Khemka, vice-president and deputy chief financial officer of Ambootia, says: “We have used [Oikocredit’s] funds to acquire struggling, abandoned and derelict estates. Thousands of people were in a precarious situation. Their basic wages weren’t being paid, their homes were dilapidated and they were unable to lead normal lives. With Oikocredit’s help we’ve bought three estates and are working on turning them into profitable businesses.’’

In September 2015, the United Nations created a universal set of goals aimed at addressing critical global challenges by 2030. These goals, known as the sustainable development goals (SDGs), are focused on tackling poverty, inequality and injustice, hunger, climate change and many other issues facing the world today. Achieving the SDGs is estimated to cost around $1.4tn (£920bn) each year for the next 13 years, and governments alone will not be able to foot the bill.

“The impact of Oikocredit on many of the 65,000 people who live on our company’s tea estates is tremendous. As well as social benefits, there are ecological improvements because we follow a sustainable model of farming,” says Sanjay Bansal, chairman and managing director of Ambootia.

Tea pickers sharing a joke on the Ambootia estate, Darjeeling India. Photograph: Opmeer Reports

 

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Established in 1975, Oikocredit invests in more than 800 social enterprise partners like Ambootia across Africa, Asia, Latin America and central and eastern Europe. We prioritise inclusive finance, agriculture and renewable energy sectors to empower the most disadvantaged communities in the world.

Oikocredit’s mission and social performance measurements align with many of the United Nation’s 17 SDGs –particularly SDGs 1 (no poverty), 2 (no hunger), 5 (gender equality), 7 (affordable energy) and 8 (decent work and economic growth).

The investment opportunity for individuals and organisations is via depository receipts in the Oikocredit International Share Foundation (OISF), which have delivered a 2% gross return each year since 2000*. There is no fixed notice period for redemption, no annual management charge, and investors have always had their capital repaid. The minimum investment is £150 (or €200); there is no maximum. Conditions apply and your investment is a risk. It is not covered by a financial compensation scheme and is potentially illiquid. Past performance in terms of dividend payments is not a guide to future performance and repayment of your investment is not guaranteed. Oikocredit has the right to postpone redemptions for up to five years. If you are in doubt about the suitability of this investment, please contact a financial expert. *Taken from annual reports and accounts.

To learn more about investing with Oikocredit, contact us at:

Oikocredit UK & Ireland, Hyde Park House, 5 Manfred Road, London, SW15 2RS, UK

Tel: +44 (0) 330 355 3300; email: uk@oikocredit.org;

website: www.oikocredit.org.uk/investmentproduct

(For Scottish-based inquiries, please email david.cousland@fairfinanceagency.com)