Relook at tea garden labour
The costs imposed on tea companies by outdated labour laws hamper Indian exports
The position of the India in the world of tea has been declining over time. In 2005, China overtook India as the world’s largest tea producer and relegated India to second position. India’s position as a tea exporter has, in value terms, slipped down to third after Sri Lanka and China. Sri Lanka produces far less than India — in 2012, it produced only 330 thousand metric tonnes compared to India’s one million. But in 2011, the value of its tea exports, at $1.476 billion, was well above India’s $867 million. Kenya, with tea exports valued at $858 million, was a close fourth after India. India’s share of world exports of tea has declined from nearly a half to nearly a 10th between 1950 and 2012.
The pristine place occupied by the tea industry in the Indian economy has faded somewhat with economic growth. With less than $1 billion from its export, tea is no longer even among India’s top 10 foreign exchange-earning commodities. Yet, tea continues to be the cup that cheers millions of Indians, and is the source of employment for over 3.5 million workers.
For an industry with a recorded history stretching back at least two and a half centuries to the East India Company days, a part of the reason India’s tea industry not doing as well could be structural legacies from the colonial era. These legacies need a close relook.
On July 29, 2015, the government of Assam issued a draft notification that the minimum daily wage of ordinary daily rated workers in tea plantations would be ~177.19, the same as the general minimum wage in Assam for unskilled workers from September 1, 2014. Of this ~177.19, only ~143.50 is the cash component for the workers in tea. There is ~33.69 in-kind, consisting of non-statutory ~22.10 and statutory ~11.59. It is similar to the wage agreement for tea plantation workers in West Bengal reached at the end of prolonged tripartite wage negotiations in February 2015. In West Bengal, too, the cash component of the plantation worker’s wage at ~122.40 is considerably less than the statutory minimum wage for agricultural workers. The outcome seems to have left neither the plantation owners nor the workers satisfied. The workers complain that the wage is lower than the statutory minimum wage in the state; the owners complain that many additional obligations make the settlement too onerous.
In wage settlements, it is common to find both the employers and employees complaining of having lost out. Third parties usually conclude that with both complaining, it may have been a fair deal. Is this one such case? Perhaps not. Labour has always been a major issue in tea industry, ever since the East India Company started to promote tea plantations in India in the first half of the 19th century. Through its Charter Act of 1833, the Company got the right to give wastelands in the annexed territories of Assam to European enterprises on long-term leases on a free-hold basis. The issue was where to find the labour. With the help of the colonial government, the problem was solved through systems of “arkati”, “sardars”, and getting “indentured labour” from other areas, mainly Mundas, Oraons, Gonds, Tantis, Kols and Kumhars from the tribal belts of eastern and central India. Many of the present workers are descendants of these pioneers who came from the tribal belts.
Laws were framed to regulate the conditions of life and work of the workers, and simultaneously and mostly, to develop the tea plantations. For example, while the Act XIII of 1859 or the Workman’s Breach of Contract Act tied the worker to the plantation for three years, Act III of 1863 or Transport of Native Labourers Act sought to reduce the mortality rate of labourers during transportation by requiring the licensing of contractors, recruiters, steamers, and boats. Act VI of 1865 provided a minimum daily wage of ~5 for a man, ~4 for a woman and ~3 for a child. To retain the workers, the planters offered some government-approved concessions such as accommodation, supply of drinking water, medical facilities, fuel-wood, rice, some clothing and sometimes a plot of land for kitchen garden.
Even after independence, these concessions have remained an integral part of the remuneration package for the tea plantation workers in Assam and West Bengal, the two largest tea producing states of the country. The structure was enshrined through the Plantation Labour Act (PLA), 1951 and its various amendments.
The PLA provides for the welfare of labour by mandating that the plantation owners provide medical facilities, canteens, crèches, recreational facilities, suitable accommodation and educational facilities for the children of plantation workers in and around the work places in the plantation estate. Plantations are defined as land which grows tea, coffee, rubber, cinchona or cardamom, measures five hectares or more, and employs 15 or more persons. The plantations on their own, as a matter of tradition, provide subsidised food-grains to the workers.
The condition of the workers in tea plantations, by most accounts, has not made much progress. There has been little horizontal or vertical mobility among the plantation workers even across generations, or much empowerment. The workers and their union leaders claim that PLA has not benefited the workers adequately, while the plantation owners claim that it has increased costs. This differential interpretation indicates the non-transparency of the PLA and its operation.
It is in this context that the PLA merits a relook. Most of the in-kind obligations of the tea planters to the workers - education, shelter, food, medical, paid leave and festival holidays — are standard employees’ perquisites in some parts of the organised sector. But the question is: can the tea plantations afford it? If not, as the plantation owners claim, then the consequence will be a rising share of tea coming from small tea planters beyond the pale of the PLA. In Assam, 65,000 small growers on 250,000 hectares of land are already contributing almost a third of the total tea produced in Assam. Leaving aside the implication for maintenance of quality of Indian tea and its branding, the question of whether the “informalisation” of employment in the tea industry will be good for the workers remains.
The statutory obligations under PLA can be seen as a social cost. An inter-ministerial committee recommended in 2007 the sharing of this social cost in the ratio of 10:40:50 among the state government, Central government and the plantation owners, respectively. The 102nd Parliamentary Standing Committee of Commerce in 2012 endorsed the recommendation. The recommendation has not been accepted by the state and Central governments. There is a need to revisit the PLA, the delivery mechanism for the benefits under it as well as its financing.