Economics of Tea Production in Pakistan

Tea is one of the most important non-alcoholic beverage drinks worldwide and has been gaining further popularity as an important health drink in view of its purported medicinal value. Pakistan has the potential of producing quality tea. National Tea Research Institute NTRI plays a very important role in the production and promotion of tea cultivation in Pakistan. The study was conducted to identify the opportunities and constraints in Shinkiari Mansehra. Primary data was collected from NTRI and different farmers of Shinkiari and evaluate the farmer s perceptions production processing and marketing of tea. Results revealed that NTRI processing unit was working at below its full capacity and 226.59 Rs/Kg extra costs bearing due to below capacity. Tea is a high value crop of gross margin of 21340 Rs/ Acre and annually earned gross margin from other Crops wheat and maize was 6675Rs/Acre and Tea Cultivation Advantage was 14665 Rs/Acre but farmers was not interested to cultivate due to its high initial investment. Internal Rate of Return (IRR) and Net Present Value (NPV) were calculated for investment appraisal of the tea. Hence, there is need to promote tea cultivation on grass land area which will increase their income and livelihood and create more employment opportunities for local people.