Taxes, wages weaken Kerala tea industry

THE tea industry in Kerala, India, is in crisis because of falling prices, wage increases and the high cost of fertilisers, says BP Kariappa, chairman of the Kanan Devan Planters’ Association.

Kariappa said this week that he wanted to raise the alarm about the situation in the tea industry in south India, and particularly on the association’s member estates.

He said the crisis was taking the industry towards its lowest point yet.

The worst-affected estates are Kanan Devan Hills Plantations Company, Tata Global Beverages, Harrisons Malayalam, Talayar Tea Company and Kottagudi Plantations. All are in the Munnar hills.

Kerala accounts for 5.4% of the total domestic production of tea in India and most of its tea estates are in Munnar, a popular tourist destination in the Idukki district.

“Tea prices in south India are at unviable levels, with the average price up to September 2014 dropping below 100 rupees (about R18) from 115 rupees per kilogram in the same period last year,” he said.

“Wages have gone up by 19% in Kerala.

“The increase in wages has no link to productivity and is coupled with the spiralling costs of other inputs,” said Kariappa.

In addition to the basic wage, the organised plantation sector has costs associated with meeting social obligations.

“The central and state governments are yet to provide support for the sustenance of tea plantations.

“The recommendations given by expert committees for reimbursing part from the expenses incurred for social costs still remain on paper,” said Kariappa.

The state’s tea industry is burdened with a unique plantation tax of 700 rupees per yielding hectare.

The agriculture income tax is also high in Kerala at 50% — a tax that does not exists in Tamil Nadu. This tax is levied at 30% in Karnataka, Assam and West Bengal.

“The central and state governments have to come out with relief measures. Also, the trade unions have to cooperate,” said Kariappa. — Indo-Asian News Service