Like most farmers, tea growers operate in increasingly extreme climate conditions, facing degraded soils and more extreme weather patterns.
More hostile than the harsh climate is the promotion-driven retail landscape, which rewards short‑term savings by penalising long‑term resilience.
“The discount culture encourages consumers who have to see 50% off to choose that product. You have ridiculously extractive events like Black Friday and Singles’ Day, when the biggest sales are done,” said Dilhan C. Fernando, chairman of Dilmah Tea.
A tragic irony
Speaking to AgTechNavigator, Fernando said that real change would require a shift in consumer mindset.
While retailers have conditioned consumers to expect deep discounts, he emphasised that “somebody pays the cost,” whether it is the soil, biodiversity, growers, or even consumers themselves when quality and safety are compromised.
Under these circumstances, tea growers are pushed into a reality where short‑term survival matters more than safeguarding the future, despite the undeniable need for climate‑smart farming.
Fernando underlined the “supreme irony” that it is the consumers themselves who are increasingly demanding more sustainable and ethical practices from brands.
From degraded soils to more frequent extreme weather events, these environmental changes demand innovation and the adoption of new methods such as biochar.
“It’s not that the technology doesn’t exist – it does – but we are constrained by the dual threat of predatory pricing and the need to innovate and implement methods. Some of these come with reduced yields, but they are very necessary because, as growers, we have a twin objective: we have to make today viable, but we also have to make sure that tomorrow is viable for the people who will be farming the land in future,” said Fernando.
Dilmah is directly involved with three plantation groups, including one they fully own and two others in which they hold substantial stakes.
Beyond their own estates, they support the wider plantation sector through their Stronger Together innovation programme, which invites plantations and smallholders from across Sri Lanka to collaborate regardless of competition.
Structural inequities
Fernando frames the issue as a systematic one, with growers earning the least while absorbing most of the consequences.
“The structure is such that typically around the world, a retailer will make a 45 per cent margin. A brand will make 20 to 30 per cent. The grower will be lucky to make two to three per cent.”
He revealed that Dilmah has gone to bat against the unfairness of this system by challenging retailers directly.
Fernando worries that as pressures on retailers and brands continue to rise, the resulting squeeze is ultimately absorbed by the grower, forcing them to make compromises that will impact the future.
While there are technologies such as drone‑based multispectral imaging, satellite data, and robotics that could improve adaptability to climate challenges, meaningful investment would require capital that growers often lack because much of the profit flows to retailers and brands rather than to producers.
“Since 2005-06, we’ve known about the economic consequences of global warming. We’ve also known the solutions, and there are methods we can optimise. It’s simply that the money is going to the wrong pockets. I’m not saying that people shouldn’t make profit, but what we are asking for is reasonable profit to fund innovation, support growers, and help people grow sustainably. Because today, the only way most individuals and companies can make money is by compromising. And compromise leads to problems for unborn generations.”
Ultimately, such structural inequity forces compromising behaviours that endanger the long‑term future of the humble but extraordinary cup of tea.
Fernando said: “Tea is something that was first discovered as a medicine. It has phenomenal relevance today, particularly with the non-alcoholic trend. People want variety. They want flavour discovery. They want natural antioxidant goodness.
“And yet, here we are as producers being forced to comply with the price and forced to contract rather than expand, at a time where there’s an opportunity to unlock value for people, for livelihoods, for nature.
“The world could, in the next 20 years, lose one of nature’s greatest gifts, which combines taste, flavour discovery, natural antioxidant goodness, health... These are genuinely gifts of nature. And to lose that simply because the profit extracted by the wrong people is so great that it kills the industry? It would be a monumental tragedy.”
