Why Do Tea Farmers’ Skills Decline After Leading Firms Move In?

I was born in a small mountain village in Hunan where tea was grown. Growing up amongst the tea gardens and surrounding woods gave me a particular fascination with the tea industry.

When I was a child, tea production in the village lacked a systematic approach. Every household treated it as a sideline, harvesting and pan-firing the leaves when the season turned to earn a little extra money to supplement the household income. It wasn’t until outside investors moved in and established properly scaled tea factories that tea gradually became the village’s main livelihood.

It was only as I grew older, with greater knowledge and experience, that I came to understand this as “capital moving to the countryside” or “industry going rural” – a process largely driven by the government and leading enterprises.

With the arrival of the leading enterprises, tea production in the village was clearly put on a firm footing. Local growers no longer had to worry about finding buyers, and some returning migrant workers found a new way to make a living. In a typical tea-growing household, both husband and wife would tend the crops. After three or four busy picking seasons, a family could pull in ten to twenty thousand yuan – a considerable sum for rural households in central and western China.

Yet this extra income did not justify the strenuous labour. Long hours picking by hand or machine under the scorching sun sometimes left growers relying on Huoxiang Zhengqi liquid to ward off heatstroke.

The leading enterprises, by contrast, enjoyed far healthier margins. To take one example: fresh leaf tips purchased from farmers for 80–95 yuan per jin (500g) yield roughly one jin of dry tea for every 4.5 jin of fresh leaves. Once packed, that dry tea can command a market price of around a thousand yuan.

Why is the disparity in profits between the farmers and the leading enterprises so stark? Aside from a cycle of self-exploitation, are there better avenues for growers to boost their earnings? My focus shifted to how tea-processing skills in the village had been reconfigured.

I. ‘End-to-End’ Tea Production

The tradition of tea processing in our village stretches back to the late Qing dynasty.

In the thirteenth year of the Guangxu era (1887), a merchant from Guangdong chanced upon a cup of Baomaojian tea from the Hubei–Hunan border. Struck by its brilliant liquor and refined taste, he decided to stay and set up a tea factory. He brought in skilled processors from Qimen, Anhui, to adapt the local white tea into a black tea blend. He named the product ‘Yihong’ and, building on its success, established the Taihehe Tea Firm.

At the height of its prosperity, Yihong was celebrated alongside Qimen black tea from Anhui under the moniker ‘Qimen in the North, Yihong in the South’. The methods for crafting black tea took root in the region and were passed down through generations, eventually making their way to our village.

The village’s green tea processing skills, meanwhile, owed their development to the state’s rural agricultural extension programmes. In the early 1990s, technicians from the county agricultural station came to the village to coach growers in producing premium green teas. Many villagers mastered the craft, learning to process varieties such as ‘Silver Needle’ and ‘Silver Peak’.

Consequently, before the leading enterprises arrived, people of all ages in the village possessed at least a working knowledge of tea pan-firing and processing.

During the tea season, villagers would pick fresh leaves during the day and pan-fire them on their home stoves at night. Once processed, the tea was either sold to traders who visited the village, or farmers would take a risk and catch a bus to the county town to sell it themselves. Prices in the county were higher, but caution was essential; getting caught by tax officials meant losing everything.

Aside from the general farming households, the village was home to a few small-scale family workshops equipped with mechanised machinery and more advanced processing techniques. In addition to picking and pan-firing their own crop, these workshops would occasionally hire casual labour, buy fresh leaves from local farmers for processing, and then sell the finished product to regular buyers through their own networks.

At that time, tea production in the village was largely unstructured; selling the crop was simply a means of earning extra cash to supplement household income. Nevertheless, the farmers acted as fully rounded tea producers, mastering every stage of the process—from cultivation and harvesting to processing and final sale.

German scholar Aiyuebo, in his research on the papermaking industry in Jiajiang County, Sichuan, pointed out that although skills cannot be confiscated or expropriated in the same way as tangible assets, they can be monopolised, lost, stolen, or destroyed.

This assessment aligns with the phenomena I observed in the village. Following the entry of the leading enterprise, the model of all-round tea production began to shift.

II. Skill Upgrades Tied to Procurement

In 2006, driven by agricultural industrialisation policies, the leading enterprise came to our village to invest in the tea-making industry. Adopting a “company + household” cooperation model, nearly 90% of the households in the village signed contracts with the leading enterprise, selling their fresh leaves to the company.

With technical support from both policies and the leading enterprise, tea farmers achieved skills upgrades in the cultivation and harvesting stages.

Regarding planting layouts, villagers shifted from intercropping tea in rows with other crops to a specialised, high-density tea plantation system, expanding the cultivated area and boosting fresh leaf yields. In terms of cultivars, they introduced high-yielding varieties such as Bixiangzao, Baihaozao and Chuyeqi. For pest and disease management, chemical pesticides and synthetic fertilisers were replaced with organic fertilisers and biological controls to ensure organic tea quality. Harvesting practices now widely encourage hand-picking the finest buds and the ‘one bud, one leaf’ pluck for premium grades.

This upskilling has boosted villagers’ incomes and stabilised their earnings. Capturing this shift, a common local analogy goes, ‘Now a day’s work picking tea buys enough rice for a month. In the past, farming year-round meant constant worry over drought and irrigation, yielding barely a few hundred *jin* of grain. These are far better times.’ According to 2021 survey data, farmers partnered with leading enterprises earn roughly 2,000 yuan per *mu* on average, with peak incomes exceeding 4,000 yuan.

While selling fresh leaves to the company has undoubtedly secured farmers a reliable market and stable prices, the market monopoly held by these leading enterprises has stripped them of their broader bargaining power.

In the past, the village’s mechanised family workshops typically operated within a fixed procurement circle of known contacts, built on geographical proximity and kinship ties and held together by networks of reciprocal favour.

Ordinary households and tea factory owners were often from the same clan or close neighbours and friends. With strong personal bonds, they reached a mutual understanding: “I will not question your quality, and you will not drive down my price.” This unspoken pledge of trust enabled long-term, stable trading relationships.

The arrival of leading enterprises dealt a severe blow to this network. Operating under a “company-plus-household” model, these enterprises sign fresh-leaf purchase contracts with local tea farmers. They tie the farmers to the company through a rebate scheme: for every *jin* of tea buds supplied, the company returns ten *jin* of fertiliser.

If the enterprise discovers that a farmer has breached their contract by selling spring leaves to a tea-making workshop during the Qingming period, it will refuse to purchase that farmer’s crop. This leaves the farmer with no outlet for their summer and autumn harvests, allowing the enterprise to gradually monopolise the fresh leaf supply.

After the leading enterprises monopolised the market, the village’s original mechanised family workshops gradually lost their supply of fresh leaves. To keep their tea business afloat, they were forced to settle for the next best option: briefly buying lower-quality leaves from outside villages at a premium around the Qingming festival to “grab some quick cash”, or shifting to trading in coarsely processed, machine-picked tea to avoid head-to-head competition with the leading enterprises for premium fresh leaf resources. Over the following years, the prospects for these family tea-processing workshops deteriorated steadily, and they gradually dwindled into “second-rate tea factories” that merely “scratched out a modest profit”.

In recent years, as the village’s family tea-processing workshops declined, the leading enterprises, now free of competitors, began to squeeze purchasing prices and tighten purchasing windows, steadily eroding the planting profits of ordinary tea farmers.

“MCY (the village’s mechanised family workshop) pays 75 per jin, but the tea factory (the leading enterprise) only pays 70. The factory pays 75 for tea bought from traders from other villages. We lose 5 yuan a jin, meaning we have to stand in the sun longer for less return. We can’t just refuse to sell; if we don’t sell to the factory today, they’ll find out tomorrow and stop taking our tea altogether.”

“If they (the leading enterprise) say they don’t want it, that’s it. You’ve just got to put your all into the picking; what choice do you have?”

III. The “local tea farmers” behind high value-added

Since arriving in the village, the leading enterprise has significantly boosted product value-added through standardised tea-processing techniques and brand building: under the banner of “phasing out outdated capacity”, they constructed processing plants guided by scientific, mechanised, large-scale, and industrial principles to manufacture tea, developing product lines such as ‘Little Red’ black tea and tribute tea. They also standardised process management for tea products, adopting a unified approach across “standards, quality, packaging, pricing, and distribution” to ensure consistent tea quality.

They also actively participate in tea exhibitions, skill competitions and other events organised by the government and tea industry associations. By promoting their brands through television, newspapers and new media, they have shifted the village’s output from ‘mass-market tea’ aimed at everyday consumers to ‘premium branded tea’ targeted at the high-end market, substantially increasing the product’s added value.

This restructuring of skills would not have been possible without the strong impetus provided by government subsidy policies.

For example, leading enterprises benefit from tax incentives of between 6% and 17% on tea production, and can access a 42% subsidy for technological upgrading funds when they modernise their processing equipment. Local authorities also provide considerable additional support, including a 5 yuan per mu subsidy for organic tea certification fees, plus free tea seedlings and fertiliser distributed via cooperatives. These are benefits that ordinary tea farmers and small family-run workshops cannot access.

This transformation in tea-making skills has unfolded quietly across the lush mountain landscape. As ordinary farmers settle into the comfort of stable income expectations, they have gradually drifted away from high-value operations such as processing and sales. They have become ‘partial tea farmers’ – individuals whose work is now defined by prolonged standing, exposure to the harsh sun, and regular reliance on Huoxiang Zhengqi liquid. Consequently, the profit divide between the tea farmers and the leading enterprises continues to widen.

Returning to the second question raised at the outset: beyond merely perpetuating a cycle of self-exploitation, are there better avenues for farmers to boost their profits? Could tea farmers realistically break away from the leading enterprises, roast their own tea, and sell it independently?

To test this hypothesis, I began selling tea through my WeChat Moments.

My mother and I harvested the leaves by day, and by night I studied roasting techniques from experienced artisans. Even at prices below the market rate, the margins through my social circle remained substantial—nearly double what we would have earned by selling to the industry leaders.

Yet the sales volume was far less encouraging. Even with a relatively robust circle of buyers, I managed to sell only just over ten jin (around five kilograms) of tea each year. For the average tea farmer, attempting to roast and market their own harvest would prove considerably more daunting.

Does this render any discussion of farmers’ skill development entirely pointless?

I do not share this view. While industrial expansion and specialisation are inevitable trends that cannot be halted merely out of compassion, we must still uphold a baseline of equity throughout this process. We must equip individuals with the capabilities and rights to grow, ensuring everyone has the opportunity to build a better life through their own efforts, rather than allowing these privileges to tilt exclusively toward already advantaged entities such as dominant enterprises.

When applied to how farmers acquire skills within agricultural industrialisation, our approach must keep pace with the times. We must not only focus on enhancing traditional competencies such as cultivation, picking, and harvesting, but also actively equip farmers with new skills for market-oriented processing and trade. Only then can they genuinely share in the benefits of sectoral growth and agricultural modernisation.

Foodthink Contributor

Zhou Zhou

PhD candidate at the College of Sociology, Nankai University, specialising in rural sociology and the sociology of skills. Her current research focuses on tea cultivation and the tea industry.

 

 

 

This research paper was co-authored by Professor Wang Xing and the article’s author.

Please note.

We extend our sincerest gratitude to Professor Wang Xing.

Click here to access the original paper.

Editor: Zeen