Plantations losing money, cannot afford increased wage demands
Owing to the present ongoing industrial dispute with the labour unions the country is losing Rs. 250 million in revenue per day and the proposed 20 per cent increase is going to cost Rs. 6 billion for plantation companies every year despite the declining prices of tea.
This was stated by Chairman, EFC Plantations Services Group, Roshan Rajadurai at a hurriedly-called press conference of the Planters Association of Ceylon held at the Renuka City Hotel on Tuesday on the current state affecting the tea industry in Sri Lanka. Meanwhile, the worker strike on the plantations was reportedly called off on Thursday.
Twenty established Sri Lankan blue chip companies representing the tea industry took part in the discussions. He said the gratuity and the total wage package of Rs. 9 billion will have to be borne by the plantation companies.
“We have offered a reasonable wage package increase of Rs 3375 per a month, a 20 per cent increase considering the present situation affecting the tea industry. I do not see any reason why the plantation unions should reject such a good offer,” he said.
“We have offered alternate schemes in order to reward or encourage productive people who want to earn more money by being productive. The current model that is in operation in the plantation sector is 150 years old, on an attendance-based system that was suited 50-70 years ago when the British planters were in absolute control. But the world has changed today.”
He said the tea smallholders today contribute to 75 per cent of the production where 425,000 are involved in a productivity-based model. “Their living standards are good because they have been encouraged to be their own masters.”
He said they are willing to pay Rs. 46 for the first kg of tea leaves plucked which is far more superior to what the smallholders pay in addition to all the other perks they enjoy at present.
“Some of the workers have earned around Rs 20,000-30,000 for a month by being more productive under the new scheme that we have introduced. But they cannot earn that amount on the daily wage system.”
He said 95 per cent of Ceylon tea is exported and the world market prices are determined at the tea auctions held here. “We as business people can only pay the workers by the revenue of what we earn by selling tea and rubber. Tea prices are slipping from last year and it had dipped by Rs. 60 and continues to slip by Rs. 10-20 every week. What is more alarming is about 30-32 per cent of the tea is being unsold,” he added.