Trace a kilogram of tea through Assam's Sonitpur district, as a 2019 field study of 100 small growers there did, and the money splits five ways. The grower nets Rs 2.63 a kilogram of green leaf; the person who collects and delivers that leaf to the factory nets Rs 1.86; the factory that turns it into made tea nets Rs 20.00 a kilogram; the wholesaler who blends and packs it nets Rs 2.50; the retailer who sells it nets Rs 4.00. Priced in the 2018 to 2019 rupees the study measured, the factory's cut is the largest single share in the chain, bigger than what the growing and collecting stages earn combined on the very leaf they supplied. A separate 2021 study of Vietnam's Thai Nguyen tea belt found close to the opposite: there, farmers captured the highest share of net value in the whole chain, ahead of every stage downstream of them. The two studies agree on exactly one thing: the split is not fixed by the nature of tea itself. It is set by how many hands the leaf passes through on the way to a cup, and how much leverage each pair of hands holds.

Tracing a kilogram through five pairs of hands

The Assam figures come from interviews with 100 small tea growers across fifteen villages in two blocks of Sonitpur district, plus 20 green leaf collectors, 5 processors, 20 wholesalers, and 20 retailers, published in the International Journal of Current Microbiology and Applied Sciences. The chain the researchers priced out, in rupees per kilogram:

Two things about that table need stating plainly before any of it means much. First, the grower and collector figures price a kilogram of green leaf; the factory, wholesaler, and retailer figures price the dried, finished product instead, what the trade calls made tea. The study itself supplies the conversion: it takes roughly four kilograms of leaf to produce one of the finished article, which is why the factory's own costs look so large next to everyone else's, it is absorbing the price of that leaf, multiplied, on top of its own processing. Second, this is a domestic Indian bought-leaf chain in a single district over a single season. It is not the price of a branded box on a supermarket shelf in London or Berlin, and nothing here should be read as such.

The factory outearns the farm, on the arithmetic the study invites

The study reports each stage on its own basis, leaf or finished product, so it does not do the one multiplication a reader actually wants: what did growing and gathering the leaf earn, against what the factory earned once that same leaf became a kilogram fit for sale? Run the study's own 4:1 conversion and the answer is stark. The roughly four kilograms of leaf behind one finished kilogram earned their grower about Rs 10.52 in net income (four times Rs 2.63) and their collector about Rs 7.44 (four times Rs 1.86), a combined Rs 17.96 for the two stages that actually grow and gather the crop. The factory that then dries and grades that leaf nets Rs 20.00 on the finished kilo, more than the growing and collecting stages earn together, while also absorbing the single highest cost of value addition anywhere in the chain: Rs 129.18 a kilogram, for electricity, firewood, machine repair, wages, packing, brokerage, loading, and warehousing.

The study's own sample size hints at why. It surveyed 100 growers and 20 collectors, but only five processors. A crop grown and gathered by many hands in a district funnels through very few factories, and a bottleneck that narrow holds pricing power the wider ends of the chain do not.

The wholesaler and the retailer, closer to the shop but not to the money

Move past the factory and the margins thin out again. The wholesaler, who blends bulk made tea into a consistent, packaged product, nets Rs 2.50 a kilogram, the smallest net income of any stage in the chain, despite spending Rs 35.92 to add that value, the second-highest outlay after the factory's. The retailer, who sells the finished product to a customer, nets Rs 4.00, a modest recovery, but still a fifth of what the factory clears. Both carry real costs, packaging, transport, sorting, promotion, that eat most of what they add. Neither comes close to the factory's margin. The shelf is not where the money is. The bottleneck in the middle is.

A different country, a different winner

None of that generalizes automatically, which is the actual finding worth sitting with. A 2021 study of tea households, collectors, processors, and traders in Vietnam's Thai Nguyen province, published in the Open Access Library Journal, priced out a comparable chain and found farmers capturing 42.69 percent of net added value, the highest share of any actor in that system. Retailers there created the largest raw added value, 34.64 percent of the total, but the paper attributes that to overhead, shop rent and staff wages, rather than pure margin; collectors captured the least, 2.39 percent. The shape of the Vietnamese chain, in other words, tilts back toward the grower in a way Assam's small-tea-grower chain does not.

The two papers do not study identical structures, and neither claims to explain the other, so the honest reading is a contrast, not a unified theory. But it is a genuinely useful contrast: it means "the farmer always gets the smallest share" is not a law of tea, it is an outcome of a particular chain's shape in a particular place and season.

What actually decides who wins

Put the two studies side by side and a pattern emerges. It is not about tea. It is about market structure. Assam's small growers sell into a chain with a narrow processing bottleneck, five factories serving the growers and collectors this study sampled, so the processing stage holds leverage the wide, crowded ends of the chain cannot match. Thai Nguyen's chain, run through a larger number of household-scale processing enterprises relative to its growers (14 processing enterprises against 280 grower households in the sample), spreads that same leverage more thinly, which leaves more of the money with the people who grow it. Where a chain funnels many suppliers through few processors, expect the processor to win. Where it does not, expect a different answer, and this publication has now seen a real, cited instance of exactly that.

The bottom line

A kilogram of Assam tea earns its grower Rs 2.63, its collector Rs 1.86, its factory Rs 20.00, its wholesaler Rs 2.50, and its retailer Rs 4.00, and the factory's cut beats what growing and gathering the leaf earn combined. A kilogram of Vietnamese tea, priced out the same way three years later, hands the largest net share to the farmer instead. Both are real, measured chains, not folklore, and the difference between them is the number of narrow gates the leaf has to pass through before it reaches a cup. Why Is Tea So Cheap? explains why the auction price itself has gone nowhere in real terms for a century; this is the separate question of how whatever that price is gets divided once it is paid, and the answer, this publication now has to report, changes depending on which chain you are standing in.