Politically-linked trade unions– big challenge to plantations

Plantation firms are calling for industrial peace saying that the biggest problem facing tea firms now is the issue of ‘politically motivated’ trade union action.

“Inflation levels over the past few years have also been in double digits and there are hardly any signs of this relenting,” Naresh Ratwatte, Chairman Hapugastenne Plantation Plc (HPP) has said, adding that the biggest problem facing tea firms now is the issue of ‘politically motivated’ trade union action over the last 18 months.

Agalawatte Plantations Plc (APP) Chairman, Dr. C. N.A. Nonis has also noted this in his annual review saying that the critical proviso to the success of the national agricultural crops is industrial peace.

"The country needs to be mindful that the profitability of Sri Lanka's tea and rubber industry is strongly influenced by local production costs and the movement of the global market with Sri Lanka's cost of production being substantially in excess of our competitors and international plantation commodity prices becoming progressively more competitive with the rapid development of low cost producers like Vietnam, India and Kenya, the absence of a productivity linked wage regime will increasingly hinder the country's long-term viability and sustainability of the plantation industry," he has stressed.

Ratwatte said debt levels are high, productivity is low and yields are low and declining with the seedling teas in many areas being old and often planted on poor sites.

He has said that harvesting is also labour intensive with estates facing shortages of workers as the younger generation opts out of working on estates.”

He has said the companies granted a 33 percent increase in wages in November 2006, which was valid for two years, till December 2008, but in November 2007, unions unilaterally abrogated the agreement which saw a further 18 percent increase in their wages.

“All these amount to a volatile mixture of elements, which is an unsustainable foundation for the industry in the long term,” he has noted.