Denying estate workers reasonable wage increase?

There was an article headlined “Tea industry in doldrums” in the Daily Mirror and the same article with the headline “Planters call for surge in productivity to counter rising costs” “Rising wages threaten sustainability of Plantations sector” in the Island. This article has followed three statements made by three companies for the benefit of the shareholders issued by the companies namely “Watawala profit up on palm oil” on the 30th Sept, “Tea earnings help Bogowantalawa to return to profits” on 31st Sept and Kelani Valley net up over 100%” all in the mirror Business. Why do these companies show the head to the shareholders and the tail to the public and trade unions? Though Watawala in its statement shows palm oil as the main income source says tea also has earned substantial profits. Thus to say Tea industry in doldrums is unfair and aimed at denying the workers a reasonable wage increase in the collective agreement to be renewed in April 2013. Similar statements by the other 17 companies which are mandatory are expected shortly.

The PA has talked about increase in cost of production by Rs.124.06 while not disclosing the improvement in Net sales average which Watawala has stated has improved by Rs. 103.38 and says if this trend continues the Tea industry will become unsustainable. The blame for the cost of production increasing is placed on the shoulders of the labour. They talk of accommodation child care and medical facilities. We know of no company that has built any new houses for labour since they took over in 1992 it is only the governments that have stepped in. Some 23,000 houses were built from 1995 to 2005 but only 4,000 houses have been built under Mahinda Chinthana by this government. Even this has come to an end with the abolition of the Ministry of Estate Infrastructure. Nearly 200,000 families still live in century old line rooms. 52 Hospitals have been taken over by the government and the people now go to the nearest hospital for child birth. Medical supplies are provided by the PHDT. However basic health services and crèches were provided since the 19th century and they are not anything new.

All know that Tea and Rubber Plantations are labour intensive industries and that was the reason for the British to bring immigrant labour. Further the figures of 63 to 68 % are disputable. Having examined the accounts submitted by the companies to the Registrar of companies it was found that the reporting was not transparent enough to decipher such details. In fact the small holder sector in the south who have to match market rates for labour due to competition pay more wages and provide even meals to the workers. The companies have not always followed the collective agreement in the true spirit. There are many companies who still employ labour without paying the minimum wage and deny EPF, ETF payments.

The managements complain of low prices and give figures where the sale price is lower than the cost of production, but then how did the companies I mentioned above make profits? May be in some months prices had dropped but this should be seen as a whole. But whose duty is it to sell at better prices? How many companies are attempting to move up in the value chain by marketing the tea themselves? Further the Tea exporters who are lobbying for a tea hub are making profits of over 16 Billion whereas the tea producers don’t make even a fraction of it. If they moved up the marketing chain then the companies could look after the workers better. All complaints about the marketing and promotion the companies talk of were expected from the companies who took the estates at the time of privatisation and the estates were given mostly to marketing companies.

The PA talks of increased labour productivity in this regard the former Chairman of the PA Mr. Mahendra Amarasuriya has given valuable advice at the AGM of the PA itself. He says “Regarding human productivity there are many challenges. Firstly until the crop yields are increased one cannot expect workers to harvest more than what is potentially available in the fields. For instance when Indian Rubber tappers have fields yielding over 1500 kgs/ha to tap, their productivity will exceed that of Sri Lankan tappers who tap fields yielding around 900 kgs/hain our plantation companies. The same prevails in the Tea plantations with yields around 1200 kgs to 1300 kgs/ha. A need to replant vigorously is the obvious solution”. In this regard even in Sri Lanka the pluckers in Galle district estates where yield is higher give a higher norm than in an estate in maskeliya with lower yields. So to blame the worker is unreasonable.

Mr. Amarasuriya further says “the logical means of increasing productivity of Plantations is replanting both in Tea and Rubber where as the plantation companies have recorded average yields of only around 1300kgs/ha for Tea and 900 kgs/ ha for Rubber. These yields perhaps can be doubled by replanting”.

Thus the companies who have to improve their performance by investing should not put it on the workers and grudge a fair wage increase for them or expect the trade unions who have a duty to their members to let them down. All other inputs such as fuel, power, pesticides, etc have gone up in price without the consent of the companies. They pay those charges without any protest but it is only wages that are arrived at after negotiations with the consent of the PA members so why this fuss?

Mr. Amarasuriya finally makes a suggestion which was also proposed by the minister of Plantation Industries at the AGM of the Planters society; the out grower model. He expresses fears as to whether the trade unions would resist. I wish to assure that the trade unions are willing and this has already been suggested to the government for replanting the unproductive lands mentioned in the budget for 2012.

This has the solution to the replanting dilemma too. It is said that 75% of the cost of replanting is labour and the cost per acre is Rs.800,000. Thus if two acres are given to a worker and his input is the labour then the cost to the company will be only 25% of the total cost easing the cash flow requirement. The company could enter into an agreement with the worker to supply the green leaf or the latex to the factory operated by the company. This suggestion had been made by the consultant to the EFC Plantations group, Dr. Mrs. Gunatilake and a presentation was made to the trade unions before the commencement of the negotiations in 2011. The workers are capable and willing to accept this challenge. (This is a letter sent by MP R. Yogarajan in response to the Mirror Business Lead Story titled “Tea industry in doldrums” that appeared on Friday November 2)