Planters’ Association of Ceylon Chairman Roshan Rajadurai speaking at the press briefing. Others on the head table from left: Employers’ Federation of Ceylon (EFC) Director General/CEO Kanishka Weerasinghe, Convener of the Media Committee of the Planters’ Association Tony Goonewardena, Consultant to the EFC S. Srikumar and Planters’ Association Secretary General Malin Goonetileke
Pic by Samantha Perera
By Chandeepa Wettasinghe
The Planter’s Association of Sri Lanka, which represents the regional plantation companies (RPCs), warned that the tea industry is facing an imminent threat of coming to a grinding halt if the trade unions do not sign a new productivity-based wage agreement this month.
Under pressure from the unions to increase wages, the RPCs signed an agreement with the government and one constituent party of the trade unions to increase wages for 2 months with Rs.1 billion borrowed from the government, in exchange for transitioning into a new productivity model.
“Already we’re too late. We’re borrowing and paying. Our boards will take a call very soon,” Planter’s Association of Ceylon (PA) Chairman Roshan Rajadurei said. He was unwilling to provide a time frame for any drastic action, but expressed that the RPCs would only take any such measures with great reluctance.
“If they don’t sign, we will go on like this and the estates will come to a grinding halt. It’s scary. We have been loud and consistent with the government that this will not go on for long, it will come to a grounding halt,” he added. He added that there is no possibility of providing the workers with higher wages than what is already proposed, since the shareholders of their plantation companies will not approve of it.
Rajadurei said that if things go unchanged, considering no positive outlook on global tea prices, the RPCs will honour the existing labour wages (prior to the agreement in June)—which account for 70 percent of production costs.
However, he said in such a context, the RPLC would not be able invest in replanting and fertilization as much as they would like to.
“It will go on like JEDB (Janatha Estate Development Board) and, SPC (State Plantation Corporation), for as long as possible. Then the companies might decide, there’s no point and dispose the shares. I don’t know who’s going to buy. It’s going to be a huge calamity. The government has to decide,” he added.
Rajadurei was unwilling to comment on whether the RPCs will resort to legal action to compel the government enforce the tripartite wage agreement, of which the government is a signatory.
The government has so far remained outside the process of both changing the 150-year old guaranteed work model for estate workers, as well as the annual wage increase negotiations, in fear of upsetting a voter base of over one million living in estates.
Rajadurei however said that the government does have the power to change the status quo.
“If the government says this is the model, they (trade unions) will have to comply with that,”
Wage negotiations have failed to reach a conclusion since the previous agreement lapsed in March 2015.
RPCs are currently getting an income of Rs.430 per kilogramme (kg) of tea, and have a production cost of Rs. 550 per kg—an increase of Rs.100 for the past 2 months given the Rs. 2,500 wage increase passed through the 2016 budget, and paid for through the Rs. 1 billion loan from state banks.
The RPCs are said to have incurred losses of nearly Rs. 3 billion for the past 6 months, and a further Rs.13 billion since 2012, through tea operations due to rising labour costs and the dampened tea prices in the world market.
Prior to the Rs. 100 increase since June, Sri Lankan estate workers, who plucked an average of 18 kg of tea, had a communist style guaranteed minimum wage of Rs. 15,500 a month.
According to RPC data, 10 kg of tea leaves can be plucked within 2-2.5 hours. Kenyan tea pluckers average 48 kg a day, while those in South India average 38 kg a day, and get a fraction of Sri Lankan workers’ wages.
The two new productivity-based models proposed by the RPCs offer Rs. 17,100 and Rs. 16,830, respectively, based on worker preferences to pluck 18 kg. They also offer additional payment for each extra kilogramme plucked by the workers, promoting productivity.
Rajadurei also noted that RPCs pay for the housing and other benefits of estate workers and their entire families, which is the best welfare system in all plantation economies around
Awaits govt. nod for glyphosate usage
The Planters’ Association of Ceylon said that it has requested the government to allow glyphosate to be used by the tea industry, whose areas under cultivation have reported no cases of chronic
“There has been no scientific evidence that glyphosate causes kidney disease,” Planters’ Association of Ceylon Secretary General Malin Goonetillake said.
Rajadurei noted that the lack of weed killers is affecting both the quality and quantity of tea harvests.
Goonetillake added that the Tea Research Institute also had not banned the use of the chemical.
“TRI has not banned this. They have said to spray 2 litres of glyphosate mixed into so many gallons of water twice a year,” he added. Glyphosate was banned through an executive order, under the belief that it was causing chronic kidney disease in residents of the North Central Province, where the President hails from.
However, top RPC executives believe that this is due to paddy farmers spraying glyphosate into paddy fields where the chemical remains in the water for days or months, compared to in tea and rubber plantations, where the chemical kills the weeds and diffuses when it comes into contact with soil.
Rajadurei said that the TRI has not yet started to research an alternative, but the TRI also takes around 15-20 years to investigate a chemical’s adverse effects—which is a positive attribute.