A decade ago, Lokendra Poudel and other tea farmers in the eastern hill district of Dhankuta decided to build a tea factory so they wouldn't have to send their green tea leaves outside and constantly haggle with traders.

The plan materialised and the factory opened in Pakhribas Municipality-4, Ramche. Operated by Ramche Organic Tea Producers Cooperative, it gained fame for making the best organic tea in the area, and demand for its products rose.

But the good times didn't last long. A few years later, the factory began coming apart due to internal conflict, mismanagement and opaque transactions. Six months ago, the factory known for its fine organic tea shut down.

Farmers say their investments are at risk.

“I contributed 2 ropanis of land and Rs800,000 in cash to establish the factory,” said Poudel. “We had hoped that the factory would be a big relief to tea farmers as it would pay reasonable prices for their harvests.”

The factory had been racked by internal conflict for a long time. The Covid-19 pandemic dealt another blow to the ailing factory as production came to a halt.

Madan Rai, chairman of the cooperative and a senior farmer, said that the factory was launched by a group of 62 tea farmers, and it used to buy green tea leaves grown on 2,000 ropanis in Pakhribas, Muga, Falate, Sanne and Ghorlikharka.

The factory received a Rs4 million grant from the Unnati project for its construction. The federal and provincial governments also provided assistance to buy machinery.

"We are now thinking of operating the factory in a different manner," Rai said.

Yogamaya Poudel, vice-chairperson of the cooperative, said that since the same old management was in place, there wouldn't be any improvement even if new capital was injected to resume production.

“The factory's operation lacks transparency. Covid-19 is just a pretext.”

The factory was a boon for tea farmers as it paid Rs65 for a kg of green tea leaves when other factories were offering only Rs25 per kg.

Farmers with shares in the factory have been demanding that the plant be revived and operated in a transparent manner.

While tea growers in Dhankuta are distressed by the closure of the factory, tea farmers in another eastern hill district, Tehrathum, are upbeat over prospects of a good harvest during the first flush this season.

First flush is the very first plucking of tea leaves in the spring. First flush tea is usually a signature or premium item, often priced higher than other flushes or harvests.

Tek Bahadur Magar, a tea grower and chairman of Singh Devi Tea Producer Cooperative, said that harvesting of the first flush had started in Tehrathum. “This season, tea leaves have grown faster due to sufficient winter rains and irrigation. We are expecting a good harvest.”

Tea growers say that they usually do not worry about finding a market for the first harvest because it is of high quality and buyers are ready to pay more for it.

There is one tea factory in Solma, and it is also run by a cooperative. The factory is busy processing the tea leaves.

In Tehrathum, small orthodox tea growers are harvesting 200 tonnes of green leaves annually.

More than 1,200 farmers and nine cooperatives are involved with the factory production and supply system. The factory is paying Rs75 per kg for the first flush leaves.

Farmers in Tehrathum were thrilled when the factory opened in the town.

Nowadays, farmers from the neighbouring districts of Dhankuta and Sankhuwasabha are also supplying tea leaves to the factory.

Shankar Khanal, manager of Singh Devi Tea Producer Cooperative, says the establishment of tea factories by the farmers themselves has generated employment for the local people, and farmers too don’t need to haggle with traders.

The tea factory is located in Laligura Municipality-9, Solma targeting small tea growers.

In the past, many tea growers had a hard time selling their harvests because there were no factories. Now there is no such problem, according to tea growers.

Bir Bahadur Basnet, a tea grower and a technician at the factory, says a state-of-the-art processing machine has been installed, and it has helped farmers get a fair value for their products.

Kendra Prasad Limbu, chief of the Tea Extension Project in Solma, said that farmers had benefited immensely from the establishment of the processing plant.

The factory is equipped with a green leaf drying, rolling, grading and packaging machine. It has a capacity to process 300 kg of green leaves daily, and employs more than 250 people.

Basnet says the factory produces black, green, white, golden, red, orthodox and other tea varieties.

Tea cultivation started in Solma in 1983, and the acreage has been increasing every year. Tea is grown on 2,400 ropanis, and small farmers in the district earn Rs10.2 million annually by selling green leaves.

According to the Trade and Export Promotion Centre, Nepal’s tea exports declined by 26.20 percent year-on-year to Rs2.21 billion in the first eight months of the fiscal year ended mid-March. Shipments totalled 8,590 tonnes.

Nepal produces more than 25,000 tonnes of tea annually, with CTC tea making up 19,000 tonnes, says the Tea and Coffee Development Board.