Govt Moves to Rescue Tea Sector as Costs and Debt Squeeze Plantations

The government has launched an urgent drive to rescue the country’s ailing tea industry, forming a 12-member high-powered monitoring and advisory committee to tackle spiralling production costs, mounting debt and persistent financial bottlenecks threatening tea plantations.

The move, announced through a gazette notification issued by the Prime Minister’s Office on Sunday, comes as tea garden owners grapple with a punishing combination of soaring fuel, fertiliser and electricity costs, labour disputes and increasingly erratic weather.

The committee, headed by Commerce Minister Khondkar Abdul Muktadir, has been tasked with overseeing the overall development of the tea sector and recommending immediate measures to address its long-standing financial and structural problems.

A key item on its agenda is the proposed creation of a revolving fund at an interest rate of just 6 per cent, which could provide a much-needed financial lifeline to cash-strapped tea garden owners struggling under the weight of accumulated debts.

The committee will also recommend measures for rescheduling classified loans and providing fresh financing to indebted tea estates, enabling them to restructure their liabilities and obtain new funds to repay existing loans while keeping their plantations operational.

Senior officials from the Prime Minister’s Office, Bangladesh Bank and the ministries of Finance, Land, Agriculture and Commerce, along with representatives of organisations linked to the tea industry, have been included in the committee.

The committee may co-opt additional members when necessary and will meet as required. Its mandate has taken effect immediately.

The government’s intervention comes despite a spectacular start to the 2026 tea season. Tea production in the first four months of the year surged 130 per cent to 9.07 million kg, following the Bangladesh Tea Board’s adjustment of auction floor prices.

But the impressive production figures mask a deeper crisis threatening the industry’s financial health.

Tea plantation owners are being squeezed from both sides, with the cost of keeping estates running soaring while their financial capacity to invest and service debt continues to weaken. Fuel, fertiliser and electricity prices have climbed sharply, while disputes over labour wages have added further pressure to already stretched operating costs.
Weather is delivering another blow.

Intense heatwaves, with temperatures ranging between 36°C and 40°C, have fuelled pest infestations and hampered leaf growth in the country’s major tea-producing belts, particularly in Sylhet and Moulvibazar.

The combination of rising costs, debt distress and climate-related production risks has left many tea gardens fighting to maintain operations even as national output shows strong growth.

Against this backdrop, the proposed 6 per cent revolving fund has emerged as a potentially critical lifeline. Access to cheaper credit could allow financially distressed plantations to clear or restructure liabilities, maintain production, replace ageing equipment and invest in rehabilitation and productivity-enhancing measures.

The committee will also monitor the sector’s broader performance, identify persistent bottlenecks and recommend policy measures to strengthen the industry’s financial foundations and ensure its long-term sustainability.

Industry experts warn that the government’s response must move swiftly from policy to implementation. Unless low-cost financing reaches struggling plantations without delay, the sector could find itself unable to convert strong domestic production into stronger export earnings.