Published Paper No. 3 - JMRA15March (1) 19-1134

Souvik Banerjee, Journal of Management Research and Analysis (JMRA)
Available online at http://jmraonline.com

ISSN: 2394-2770, Impact Factor: 6.303, Volume 06 Issue 1(1), March 2019, Pages: 114-121
CHALLENGES IMPACTING THE ADOPTION OF SUSTAINABILITY

CERTIFICATIONS IN TEA ESTATES OF EASTERN INDIA
1
SOUVIK BANERJEE
1
(PhD Research Scholar, School of Management Studies, Sri Satya Sai University of Technology & Medical
Sciences, Sehore, Madhya Pradesh, India)
Abstract: This study was aimed to identify the challenges impacting the decision for adoption of sustainability
certifications by tea estates of eastern regions of India. A questionnaire survey for 74 certified tea estates and 54 non-
certified recognized tea estates from Darjeeling and Dooars areas of West Bengal and Upper, Lower and Cachar
areas of Assam in India was conducted. Exploratory factory analysis and independent T-Test for means were done to
understand the challenging factors for sustainability certifications. The findings showed that Resource & Knowledge
constraint and Practical & Operational challenges are the most substantial factor which affects decision of non-
adoption of sustainability certifications. Majority of the tea estates who adopted for certifications also faced the same
challenges and found that most of the requirements set in various sustainability agriculture standards are difficult to
implement given that resource investments are high and operational challenges of traditional farming acts as an
obstacle. The need of the hour is to adopt for modernization which demands in higher capital investments.
Key words: Challenges, Adoption, Sustainability Certification, Tea, Tea Estates, Agriculture
1.0 INTRODUCTION
Tea had been a part of Chinese culture for many centuries. The tea bush is additionally native to India, and
grew within the wild long before its true value was accomplished. The drinking of tea was formally introduced to
Indians by the British. Tea has been widely used for many purposes. It is used to alleviate tiredness, refresh the spirit,
fight off illness, cure depression or boost energy; the curative benefits of tea are beyond imaginable. Tea has
transformed into what’s now famous as chai, often taken in brewed form or a flavourful black tea. With the popularity
of drinking tea increasing across the globe, the agricultural practices of growing tea has also vastly increased over
time. India, as per the Tea Board of India, there are 87 Tea Estates in Darjeeling district of West Bengal where as in
Assam the numbers are far more reaching to more than 40,000.
FAO (Food and Agricultural Organization) in its 2013 "Statistical Yearbook” shows that agriculture remains
central to economic development for the whole world and so goes the saying for India as well. However, the ever
increase in agriculture led by stronger market demand for better productivity and faster production led to many effects
on the social and environmental factors. The total area under tea cultivation is still growing. Hence, in order to make
enough land available for tea cultivation, vast areas are being farmed and that leads to deforestation, which has
numerous negative effects on ecosystems.
The most hazardous environmental impact of tea production is the alteration of habitat which can culminate
in loss of biodiversity. With the elimination of trees results in the concurrent reduction of organic matter content in
the soil and the subsequent hampering of the soil’s water-holding capacity and increases soil erosion. In order to
realize higher productivity, estates are kept weed free by weeding and applying scrapers. Manual weeding
mistreatment resulted in severe soil loss by erosion. Thus, aside from eroding soil, the water table is lowered, with
consequent harmful effects on the moisture status of the surface layers of soil. Decades of studies formulated the
application of inorganic fertilizers for gearing up productivity. However, thanks to the poor organic standing of the
soil and deterioration of water-holding capability, infiltration is retarded, with introduction of runoff issues. The
recurring use of nitrogenous fertilizers causes the release of other elements from bound sites and leaching out into
rivers and other water bodies, rendering them absolutely irreconcilable with biodiversity. Decreasing soil pH and
frequent application of weedicides have taken a toll on earthworms, which keep the soil in fine tilth.
Sustainability is regarding meeting basic human wants and needs. Most definitions stress that sustainability
requires taking decisions that recognize the connections between actions and effects in the environment, economy
and society. The term was utilized by the Brundtland Commission that coined what has become the foremost often-
quoted definition of sustainable development as development that "meets the needs of the present without
compromising the ability of future generations to meet their own needs."
Despite India’s historical success with the tea business, in recent years, the industry has faced serious
competition in the international and national market which has lead to the present crisis. The competition for Indian
Tea is primarily driven from other tea growing regions of the world like Nepal, Srilanka, Kenya, Mozambique etc.
Tea prices in India are being driven down by factors as below:
1. Decline in demand for Indian tea in the global market
2. Defects in auction system
3. Poor price realization
4. Defective market structure
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5. Increase in cost of production

6. High rate of absenteeism of skilled workforce
The only solution to address these problems is to adopt the concepts of sustainable agricultural practices.
Sustainability Certifications acts as tools for the Tea Estates to adopt the concepts of sustainable
agriculture management system and to understand that the adoption is maintained continually. There is no
compulsory standard for sustainable farming practices world over. Widely agreed upon standard or sustainable
agricultural practice are not available. SAI, IFOAM, FLO, SAN have some voluntary sustainable standards and
labels at the global level. In India, a well formulated standard in this regard is still wanting.
However, recently the Tea Board of India has developed India Tea Sustainability Program in the name
and style of Trustea and has motivated registered tea estates in India to adopt the same. The most popular
sustainability certifications adopted in tea estates in eastern regions of India are Rainforest Alliance, Fairtrade,
Organic Standards like NOP, NPOP, JAS, COR, USDA as well as ISO 22000:2005 (Food Safety Management
Systems) and also membership of Ethical Tea Partnership (ETP).
2.0 NEED FOR THE STUDY
The need for this study is envisaged since there is limited information and research work associated with
adoption of sustainability certifications in Tea Estates. It is understood that there exists several challenges which
impede the decision for adoption of sustainability certifications. Though few tea estates may decide to adopt the
sustainable agricultural practices in their farming practices, they may be reluctant to opt for certification because of
these challenges. The aim of this study is to identify the challenges faced by the Tea Estates located in eastern regions
of India for adoption of various Sustainability Certifications.
3.0 LITERATURE REVIEW
With the limitation of credible research in sustainability certifications for tea estates in India, the focus of
the literature review was on various system certifications for industries and it’s adoption factors and benefits.
González (2004)[3] in his study on motivations and barriers of implementing an EMS in Spanish
organizations revealed that the main barriers were the bureaucratic work and the costs associated to the certification,
the lack of time, and, the difficulty of dealing with environmental aspects and with EMSs. Moreover, these barriers
did not vary depending on the business sector or size of the organization.
Yin & Schmeidler (2007)[6] highlighted that Economics and institutional pressures also play a significant
role in determining adoption of environmental management system.
Erlandsson (2007)[9] in his research work aims to gain a more comprehensive understanding of the enablers
of and barriers to corporate environmental information management, an analytical framework was developed and
used to investigate the status and determinants of environmental information management at two case companies. The
thesis is concluded with discussions on quantitative versus policy based approaches, different ways of supplying end
consumers with environmental information, the corporate implications of strong media pressure and the role of
interdisciplinary competence.
Arif et al (2002)[12] in a study conducted on selected Indian industries identified that the major business
challenges for non-adoption of EMS is high cost of implementation, human resource constraints, lack of technological
know-how and lack of peer support for implementation. Researchers also concluded that financial constraints acts as
the most dominant factor for non-adoption of the environmental certifications.
Trigos (2007)[13] while in his investigation of green supply chain management in the construction industry
in the UK revealed that in terms of the barriers experienced, lack of resources was the most significant barrier for
suppliers, followed by lack of skills or knowledge, internal barriers and finally the lack of government legal
enforcement.
Malarvizhi & Yadav (2008)[14] pointed out that research on Indian organization’s perception regarding the
challenges to continually improve the EMS is limited also because of the lack of voluntary disclosure of data. It was
observed that Indian companies follow diverse reporting practices on the internet viz., stand-alone environmental
reporting or reporting along with the Annual/Financial Reports, or Sustainability Reporting (which include the
economic, environmental and social issues).
Gray (2000)[15] identified three motifs: the need to clarify terminology in the field of social and
environmental ‘audits’; the current weakness of attestation practices in the area; and the significant - but unfulfilled -
promise offered by professional accounting and auditing education and training. The paper concludes with a call for
a substantial re-think of accounting education and training.
Senarath and Athauda (2010)[16] have identified the adoption factors and challenges faced by Sri Lankan
Tea Industries for Fairtrade Certification and have concluded that adopting of Fairtrade quality standard in the
corporate tea sector is significantly determined by attitude, working experience of the estate manager, revenue of the
estate and number of employees in the estate. The most important constraints perceived by the corporate sector tea
estates were low market share in global market, lack of finance and unawareness of the workers about the Fairtrade.
Some of the standards like no child labour and forced labour, non-discrimination, freedom of association,
environmental friendly farming practices and safe working conditions can be observed in most of the estates.

Mitra et al. (2008)[17] pointed that Indian companies have not yet developed a holistic and consistent
approach to environmental reporting, as there is lack of environmental reporting guidelines which may be a reason
for lack of structured research in analyzing the motivations and barriers to implementation of EMS by Indian firms
and the results of the perceived versus actual benefits of the same.
Zampos et al. (2008)[20] aims to present a framework of barriers to implementation of environmental
management systems. The article presents a structure in sections that were also used in designing a questionnaire
applied to identify the main barriers to implementing an EMS in Brazilian and Slovenian companies in the
construction sector.
Zutshi and Sohal (2002)[21] highlights that organizations are facing pressure from a number of sources to
become ‘environment friendly’. These sources can be broadly classified under four main categories: the market
(mainly the external forces directly impacting the competitiveness of the companies), social (which includes pressure
from various groups, the public and the community at large), financial (this broadly encompasses pressure from the
financial institutions and insurance companies, not forgetting the fines and legal liabilities resulting from non-
compliance) and regulatory (pressure from the guidelines and regulations at both national/international levels to
continue working of the organizations).
Brandi (2013) [22] in their study for adoption of sustainability certifications for palm oil sector in Indonesia
highlighted that challenges for certification is technical and operational challenges for actual implementation of the
standard requirements on ground and also capability, financial, flow of information and lack of motivational
incentives impede adoption.
Sommer (2017) [23] in a discussion paper on drivers and constraints for sustainability certifications for small
and medium scale enterprises pointed that in India the major challenges for non-adoption of certification is lack human
resources, costs and risk aversion, access to finance, access to markets without certification.
As per University of Colorado [24], the major challenges for adoption of sustainability certifications are
engaging top management and employees as well as developing metrics to assess initiatives and making the
certification a business case for the management to enthuse adoption.
4.0 METHODOLOGY
Based on literature review and personal experience of the researcher obtained through interviews with
various stakeholders in the tea industries, twenty (20) variables were identified which were put to test to understand
whether they act as challenges for adoption of sustainability certifications. Quantitative research method using
questionnaire survey was deployed. The target respondents for the questionnaire were Senior Management of Tea
Estates who has direct control in decision making about adoption of sustainable certifications. The lists of tea estates
were obtained from the Directory of Tea Board of India 2007.
The questionnaire was circulated electronically to almost 300 Tea Estates located in Darjeeling, Upper
Assam, Lower Assam, Dooars and Cachar areas of eastern India. The questionnaire consists of two parts: 1)
Demographic background of the Tea Estate; 2) Response on various driving forces for adoption. Before the actual
survey were conducted, the questionnaires were pre-tested and reviewed for structure, readability, ambiguity and
completeness, and the survey instrument was refined in light of comments from the respondents.
The respondents were asked to rate the answer of each question on a 5-point Likert-type scale ranging from
1 (strongly disagree) to 5 (strongly agree) to what extent the statement fits the situation in their organization.
Cronbach’s Alpha was calculated for the questions to test the reliability of the questionnaire and value obtained was
more than 0.7 which confirmed that the questionnaire is fit to be used for data collection. The twenty (20) variables
which were tested are given as follows:
Table 1: Variables affecting non-adoption of Sustainable Certifications
Sl. ID. Variables
1 S1. Requirements not tuned to local needs.
2 S2. Traditional manufacturing techniques impede implementation
3 S3. Requirements are in contradiction to productivity initiatives.
4 S4. Lack of automation in documentation
5 K1. Lack of technical know-how.
6 K2. Need for investment of additional work time
7 K3. Implementation leads to reworking
8 K4. Need to hire external consultant
9 R1. Engagement of Key Managerial Persons
10 R2. Establishment of separate department
11 R3. Increase in paper work.
12 R4. Demand for more financial resource allocation
13 E1. No peer support available
14 E2. Audits for sustainability certifications are more of inspections
15 E3. Lack of research data enabling implementation

Sl. ID. Variables

16 E4. No government financial incentive
17 C1. Very high implementation cost
18 C2. Very high audit fees for certification
19 C3. Up gradation of physical infrastructure required
20 C4. Employee trainings for sustainability certifications demanded higher financial
investments.
5.0 RESULTS & CONCLUSION
A total of 154 responses were obtained, out of which 80 (63%) responses were obtained from Tea Estates
who have adopted any sustainability certifications and 74 (58%) responses were obtained from non-adopters.
Descriptive Statistics revealed the following information about the adopters of sustainability certifications. Majority
of the non-adopters who responded belong to Assam, whereas the adoption rate for sustainability certifications in tea
estates located in Darjeeling is higher. This is depicted in Figure No. 1
Figure No. 1 – Non-Adopters as per Region
Most of the non-adopters for sustainability certifications who responded to this survey operated in Domestic
Market (81%) which may signify that there exists a stronger market demand for adoption of sustainable agricultural
practices. The same is depicted in Figure No. 2.
Figure No. 2 – Non-Adopters as per Markets Operated
Out of all the non-adopters operating in Domestic Market, the majority (94%) belong to Assam regions and
only a handful (4%) belongs to Darjeeling regions. This is depicted in Figure No. 3. This concludes that tea estates
operating both in international and domestic market and located in Darjeeling regions have a stronger affinity to adopt
for sustainability certifications.
Figure No. 2 – Non-adopters in Domestic Market as per Region
Majority of the adopters who responded manufacturers different types of teas i.e. Orthodox, CTC, Green and
Specialty Teas. This is depicted in Figure No. 4.

Figure No. 04: Percentage wise distribution of type of tea manufactured by Adopters
Post data collection, statistical analysis of the data was done by using open source software package named
PSPP. In order to identify the most probable factors that would affect the decision of adoption of certification, Factor
Analysis was conducted using PSPP Software.
Total twenty (20) variables were subjected to the principal component analysis with varimax rotations and
two (02) factors were achieved with the variance information of 90.12%. The rotated component matrix describing
the number of statements with factor loadings in each factor is mentioned in Table 5.1. The factor scores were also
shown for each two (02) factors obtained from principal component analysis.
Table No. 2 – Rotated Factor Scores
Variable 1 2
S1 0.54 0.77
S2 1.02 0.45
S3 0.67 0.92
S4 1.21 0.41
K1 1.00 0.29
K2 0.84 0.36
K3 0.33 0.86
K4 1.36 0.18
R1 0.93 0.46
R2 0.72 0.97
R3 0.31 0.95
R4 0.77 0.50
E1 1.00 0.49
E2 0.43 1.05
E3 0.95 0.48
E4 0.16 0.82
C1 0.90 0.44
C2 1.02 0.42
C3 0.33 0.99
C4 1.09 0.52
Based on the factor analysis, two (02) factors were summated and they are renamed as given in Table No. 3.
Only the most probable variables having a factor loading above 0.76 was retained.
Table No. 3 – Challenging Factors selected for Testing
Sl. Factor Name Variables
1 Factor 1 – Resource & Knowledge Constraint S2, S4, K1,K2, K4,R1, R4, E1, E3, C1, C2, C4
2 Factor 2 – Practical & Operational Constraints S1, S3, K3, R2, R3, E2, E4, C3
Based on Table No. 3, the following null hypotheses were formulated:
H1: There exists no significant relationship between Resource & Knowledge Constraint and non-adoption of
Sustainability Certifications in the tea estates of eastern regions of India.

H2: There exists no significant relationship between Practical & Operational Constraints and non-adoption of
Sustainability Certifications in the tea estates of eastern regions of India.
Independent sample t-tests were conducted to test the hypotheses. For H1, the t-test results are given in Table
No. 4.
Table No. 4: ‘t-test’ results for Resource & Knowledge Constraints
t-test Value p-Value Status Mean Std. Dev
Adopter 4.8 0.4
S2 15.77 0.000
Non Adopter 2.91 0.92
Adopter 4.72 0.45
S4 19.32 0.000
Adopter 4.03 0.76
K1 13.41 0.000
Adopter 4.65 0.48
K2 10.59 0.000
Adopter 4.12 0.76
K4 19.67 0.000
Adopter 4.61 0.49
R1 11.49 0.000
Adopter 4.35 0.48
R4 9.04 0.000
Adopter 4.43 0.5
E1 12.97 0.000
Adopter 4.84 0.37
E3 15.1 0.000
Adopter 4.69 0.47
C1 10.61 0.000
Adopter 4.74 0.44
C2 15.3 0.000
Adopter 4.64 0.48
C4 13.42 0.000
Since for the above variables under the factor Resource & Knowledge Constraint shows a low p-value
(<0.05) at 95% confidence limit hence the null hypothesis is rejected. This means that there exists a significant
relationship between Resource & Knowledge Constraints and non-adoption of Sustainability Certifications in the tea
estates of eastern regions of India.
For H2, the t-test results are given in Table No. 5
Table No. 5: ‘t-test’ for Practical & Operational Constraints
t-Test Value p-Value Status Mean Std. Dev
Adopter 4.24 0.43
S1 10.79 0.000
Adopter 4.70 0.46
S3 8.72 0.000
Adopter 4.16 0.37
K3 4.34 0.000
Adopter 4.55 0.50
R2 9.62 0.000
Adopter 4.49 0.50
R3 3.69 0.000

Adopter 4.28 0.45

E2 5.51 0.000
Adopter 4.39 0.49
E4 2.93 0.004
Adopter 4.27 0.45
C3 4.54 0.000
Since for the above variables under the factor Practical & Operational Constraint shows a low p-value (<0.05)
at 95% confidence limit hence the null hypothesis is rejected. This means that there exists a significant relationship
between Practical & Operational Constraints and non-adoption of Sustainability Certifications in the tea estates of
eastern regions of India.
Thus from the above study we can conclude that Resource & Knowledge Constraint and Practical &
Operational Constraints acts as major challenges for adoption of sustainability certifications in Tea Estates in eastern
regions of India,. The findings are in line with the adoption factors for environmental management systems as per
Brandi [22] and also corroborate the findings of Sommer [23] for the challenging factors for certification.
6.0 LIMITATIONS OF THE STUDY
The facts discussed in this study would be based entirely on the responses to the questionnaire therefore,
ascertaining the genuineness of the responses was identified as the limitation of the study. The responses were limited
only to the tea estates located in Eastern part of India, primarily West Bengal and Assam and hence one of the
limitation may be that the responses mayn’t be homogeneous for the entire country and the tea community as a whole.
The number of responses obtained was approximately eight (08) times of the total variables tested for and this may
affect results obtained by the statistical tools used in this study.
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Souvik Banerjee, Journal of Management Research and Analysis (JMRA)

Available online at http://jmraonline.com

CHALLENGES IMPACTING THE ADOPTION OF SUSTAINABILITY

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5. Increase in cost of production

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Sl. ID. Variables

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Adopter 4.28 0.45

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