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Malawi Tea 2020

Joining forces at a national level to address root causes of endemic poverty

Malawi Tea 2020 graphic



The challenge

Malawi, East Africa: A young child is nestled on her mother’s back, wrapped snuggly in a chitenje and napping soundly as her mother moves up and down seemingly endless rows of tea plants, picking the vibrant green leaves with expert efficiency and filling basket after basket before the sun goes down on another full day of work in the fields.

Based on Malawi’s malnutrition rate of approximately 50%, the chances are high that this child’s growing body will become stunted physically and in other developmental areas, notwithstanding her mother’s wages and in-kind earnings as a worker in the Malawian tea industry.

As international non-governmental organization (NGO) campaigns have highlighted since the early 2000s, wages remain low in the Malawian tea business despite it being the largest formal employer in all of Malawi. Approximately 62% of Malawians live below the World Bank’s extreme poverty line of US$1.25 per day; approximately 50,000 tea plantation workers were documented in 2013 as being trapped in conditions of extreme poverty. Research commissioned to calculate what a living wage would be in the Malawian tea industry concluded that wages and in-kind benefits would need to double to achieve a living wage.

The response

In 2015, 20 different groups along the Malawian tea chain got together and agreed that more had to be done to tackle the serious issue of worker wages in their industry. The resulting Malawi Tea 2020 Revitalisation Programme (Malawi Tea 2020) is a coalition of Malawian tea producers, the largest international tea buyers, NGOs, relevant certification organizations, and donors. 

The initiative is aiming to “create a competitive Malawian tea industry where workers earn a living wage and smallholders are thriving.” The partnership is endorsed by the Malawian government and involves companies of a range of sizes. All participating tea producers are part of the program through the Tea Association of Malawi (TAML).

The Ethical Tea Partnership (ETP), TAML, Oxfam, IDH (the Sustainable Trade Initiative), and GIZ (the German Agency for International Cooperation) jointly lead the initiative, which is the first of its kind in the tea industry.

“None of this would have happened without the burning platform from NGOs and other campaigns. But once that has happened, you must then have shared knowledge about what the problem is; and then shared commitment across brands, producers, workers and governments to practical approaches that will have a real impact.”
Rachel Wilshaw, Oxfam

 

Key aspects of the initiative

Recognizing that living wages cannot be tackled in isolation but must instead be addressed using a multifaceted approach, Malawi Tea 2020’s five-pronged initiative and respective results to date include: 

  1. Improved productivity and quality of Malawian tea to generate a more profitable and competitive industry that is able to support the payment of living wages to its workers.

    • Outreach to financiers and donors to revitalize the industry through irrigation, replanting and factory refurbishments has resulted in two ongoing deals at an estimated US$3 million.

      Each deal involves a tea estate undergoing irrigation feasibility studies and environmental and social impact assessments, with support from IDH and other investors, to boost volume and quality production while mitigating negative social and environmental impacts such as climate change. 

    •  Tea estates themselves have invested US$6.3 million into revitalization projects, including those around agricultural improvements, infrastructure and electricity generation.
  1. Improved conditions for women workers via housing and nutrition improvement programs, as well as efforts to achieve better human resources management.
    • Via a new nutrition program, 30,000 workers (out of a target of 50,000) now receive fortified lunchtime meals and all workers receive weekly vegetable distributions.

    • TAML has adopted a new policy to address sexual harassment and gender-based discrimination, four estates have established gender committees, and gender training sessions for supervisors, managers and workers began in September 2017.
  1. Improved opportunities for smallholders to earn a living income via Farmer Field School methodologies, business management programs, and agro-inputs.

    • A living income study has established a living income benchmark for smallholder farmers (MWK2,889 or US$15.04 in PPP – purchasing power parity), as set against current smallholder incomes (MWK1,574 or US$8.16 PPP).

    • 3,300 smallholder farmers (65% women) have improved their farming and business skills.

    • 50 Farmer Field Schools have trained 1,548 farmers, resulting in the improvement of field-level practices. For instance, 540,000 tea plants are being cultivated in 45 mini tea nurseries and 3,138 farmers are participating in a total of 173 village savings and loan groups across Malawi.
  1. Improved wage-setting process that centers around collective bargaining between worker representatives and employer organizations.

    • TAML and the Plantation and Agriculture Workers Union (PAWU) igned the first ever collective bargaining agreement (CBA) in the tea sector.

    • Wages have gone up several times since the initiative started in 2015, narrowing the gap between the TAML base wage and living wage from 28% achievement of the living wage to 41%.

    • Training of 337 managers in 2017 on the CBA and wage sensitization sessions with 5,500 workers, have been carried out.
  1. Improved environmental efficiency and more sustainable energy use in tea-growing areas.

    • As of September 2017, 7 factories had started collecting primary data on their energy efficiency.

    • In June 2017, key stakeholders took part in a training on climate change impact mapping.

    • 10 tree nurseries have been established and 6 cook stove production groups with 125 members have been established alongside the training of 140 sales agents.

“Malawi Tea 2020 is tackling the issue of extreme poverty in the Malawi tea workforce from a holistic approach. It’s looking at innovation and investment in the industry; it’s seriously examining what a living wage is in this context and how buyers’ procurement practices must change to meet that; it’s empowering smallholders and recognizing their important role in all this; it’s linking to the sector’s environmental efficiency and sustainability; and it’s bringing a gender lens to all it does.”

Sarah Roberts, Ethical Tea Partnership

 

In addition, a key highlight of the program has been its ongoing work around sustainable procurement practices. In building out this area, the initiative commissioned Accenture Development Partnerships to develop a methodology to calculate the “additional cost of paying workers a living wage and for this cost to be fairly shared across the tea value chain.” Consultations on the proposed model are currently underway. At the same time, the initiative is seeking additional brands and traders to expand the program to cover 100% of the Malawian tea industry.

“Working on living wages in the context of Malawi Tea 2020 isn’t just about paying workers more. It’s about taking a holistic approach that breaks down what we’re really trying to achieve and coming up with various programs and targets that realistically support the development of a sustainable tea industry in Malawi.

Scale and traction are needed to effect real change when tackling these complex issues. For some companies, it might initially feel uncomfortable to engage with your competitors in this way, but you can and should work through that in order to use your collective influence to drive positive impacts that just won’t happen without collaboration across the industry.

Also, all of the different actors involved in an initiative like Malawi Tea 2020 will have different perspectives; and that’s ok. It’s when no issues are arising that you have to worry, since this likely means that people aren’t speaking up. Having uncomfortable conversations about what works and what doesn’t work is an important part of the process and companies should be flexible and adapt their approaches based on what they learn along the way from the network of knowledge and various areas of expertise that should be involved.”

Katy Tubb, Tata Global Beverage
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