Early 2016 FSAS conducted in collaboration with Nucleus Foundation, Sri Lanka, the External Evaluation of this programme, implemented by UTZ, Douwe Egberts Foundation and various Sri Lankan tea institutions. The purpose of this evaluation was to inform UTZ and stakeholders on the outcomes of the tea programme and draw lessons and recommendations. Outcomes were specified as the social, economic and environmental changes as seen and perceived by tea estate managers, estate workers and tea smallholders.
This tea sector is the third largest foreign currency earner for Sri Lanka. Its profitability however is under threat because of decline of its export markets (Ruble crisis in Russia, protracted war in Middle East) and its high labor costs, low labor productivity and low yield levels.
This evaluation highlighted 4 key areas of changes, based on the UTZ Code of Conduct, that were widely and consistently appreciated by the direct stakeholders:
- Management practices: a much stronger sense of ownership and joint responsibility between estate management and workers towards final estate performance. The mindsets of both changed. Managers acknowledged and observed the contributions of workers to tea quality (on farm and in factory). Workers got a greater say in estate management and realized the importance of their roles in the profitability. These better managers-workers relations were the most surprising in-depth change caused by the programme. Certified smallholders invested more in tea quality as well as in other crops, making their farms more resilient.
- Farming and manufacturing practices: good Agricultural and Manufacturing Practices increased tea yields and quality. Better harvesting techniques and handling of pesticides and fertilizers were key to these improvements. These practices are adopted by all.
- Working and living conditions: the health, drinking water and gender related improvements were most frequently cited by workers, men and women; though the direct causal relation with the programme needs more factual underpinning.
- Environmental benefits were so far the least visible changes. The evaluation argued that these environmental changes need more long term investments, which in view of current low profitability in the tea sector cannot be expected soon.
The UTZ training programme contributed strongly to these improvements due to proper mix of topics, use of national tea experts, and the combination with coaching and refresher trainings. In addition, though UTZ was the most recent sustainability standard introduced in SL, all tea value chain actors quickly recognised UTZ as the most comprehensive standard. The initiation of a tea sector coordination body where downstream tea actors met was integral part of this programme.
Though the UTZ standard was appreciated because of its strong business logic and market orientation, the successes in terms of increased sales as UTZ certified tea were only modestly growing because of limited demands, also exacerbated by mismatch between quality of supply and specific demand requirements. Apart from these challenges strongly linked with crisis in the global tea market, the evaluation identified a number of opportunities, building on the improved relationships between management and workers in order to make the tea sector more attractive for women and youth; introducing smart mechanisation and piloting with win-win outgrower models.