Financial Daily from THE HINDU group of publications
Friday, Mar 29, 2002
Agri-Biz & Commodities
Starvation looms over Kerala tea plantations
HAPPIER TIMES: Such activities are missing from many a tea estate in the State.
KOCHI, March 28
THOUSANDS of workers in the State's tea plantations are in serious financial crisis following the closing down of four tea factories and abandoning of some estates.
Kerala has 84,000 workers in tea estates with a total 20.32 lakh persons depending on them. Four tea factories have downed shutters while some are functioning partially. This has led to at least half of these workers losing their wages.
"We are finding it difficult to make both ends meet,'' workers in Idukki district told Business Line. "For our survival, the Government should take some immediate steps. Otherwise, there is a possibility of starvation in the estates.''
Mr N. Dharmaraj, Chairman of Upasi Tea Committee, and Vice-President of Harrisons Malayalam Limited (HML) said, "The situation has reached such a critical stage that most of the companies/ estates are not in a position to pay the prescribed wages, apart from meeting the statutory obligations.''
There are plantations that have not paid wage arrears and defaulted on remittance of provident fund dues for the last few months. "There are abandoned and non-functioning estates also. If this crisis is allowed to continue, the plantation industry will not be able to survive in the State,'' he warned.
Tea plantations in Kerala provided employment to almost one lakh workers, both men and women, in remote and backward areas of the State where no alternative employment is available. The situation now has made their day-to-day life very difficult and has driven them into heavy debt burden. Education of their children, medical treatment etc have also been adversely affected.
"The situation can be altered only through drastic corrective measures. In the first place, the grower should be able to realise a remunerative price. The tea auction system should be restructured to ensure competitive bidding. The wage rates and productivity norms have to be modified in such a way that the commodity becomes globally competitive," Mr Dharmaraj said.
The cost of production should be contained by reducing the unit cost of labour and inputs. The cash flow position, which has been moving from bad to worse, must be made steady, he said. The wage rates in plantations here are normally decided through tripartite negotiations conducted in the plantations' labour committee.
"Unfortunately, the linkage between productivity and increase in wage is conspicuous by its absence,'' Mr Dharmaraj said. Over a period of time, there had been an erosion in the incentive component of the total wage, he said.
The wage rate in tea plantations increased by 27 per cent in the past three years whereas the average price realised by the tea growers has decreased by 29 per cent. "The picture is more dramatic for the opening months of the year 2002,'' he pointed out.
The fall in price and the rise in cost of production have resulted in a loss of around Rs 15 for every kg of tea produced by the corporate sector plantations, he said. In such a situation, the tea plantation industry finds it difficult even to pay the wages, he said.
For instance, he said, Kenya, which had captured some of the export markets enjoyed by India was able to produce tea at an average cost of production of around Rs 37 per kg in comparison to Rs 65 in the estate sector in Kerala, Mr Dharmaraj said. South-East Asian countries produced tea at a still lower cost of production, Mr Dharmaraj said.
According to him, Kerala is the only State in the country which has a substantial stake in all major plantation crops. Among them, on an average, tea accounted for eight per cent in planted area and production. There has been a significant increase in the yield levels of tea in recent years.
During the 20-year period between 1980-81 and 2000-01, the average yield increased from 1,484 kg per hectare to 1,863 kg/ha showing a 26 per cent growth. However, the yield level of 1,800 kg/ha was no comparison to the level of 2,800 kg/ha of Tamil Nadu.
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