No one has money to pay workers for a cuppa
Wages in Sri Lanka has become a simmering topic as the country goes to the polls later this year and the estate sector is no different with the government insisting on a 70 per cent wage hike that even the state run plantations can ill afford to pay and are found draining the public coffers to pay this increase. The Regional Plantation Companies (RPCs) are in court over the matter and the smallholders, the largest producer of Ceylon tea to the world, are unable to come out of the multiple crises impacting them.
Sri Lanka State Plantations Corporation (SLSPC) Chairman Sanath Bandara speaking with the Business Times said that they will have to pay the estate workers the required increase since they are a government entity. However, he noted that due to a cash flow issue they are unable to make this payment.
In this respect, they have held several rounds of discussions with the Treasury to help support them to pay this wage increase. Following these discussions they believe the Treasury will provide them with a financial assistance of Rs.28 million per month for the next six months which they have requested commencing next week. At present the SLSPC is incurring a cost of Rs.35-40 million to pay wages of estate workers.
However, they have not yet been informed officially of the granting of funds for this purpose. In addition, Mr. Bandara said they have requested the Treasury to provide them with a further capital infusion of Rs.200 million to increase production by purchasing increased fertiliser and weedicides and renovate the factories.
He also pointed out that this increase in wages was carried out “suddenly” so they are unable to provide the funds required to make this payment and would therefore require the Treasury to provide for the increased payment.
In the meantime, the state run Janatha Estate Development Board (JEDB) too had not yet made any increase in payment of wages to estate workers.
The Planters Association has appealed their case to the Supreme Court after the Court of Appeal refused to grant an interim injunction order into the payment of the increased wages.
Its spokesperson Dr. Roshan Rajadurai explained that the industry is currently on a downward decline due to inadequate fertiliser and other issues with production levels dropping.
It was pointed out that the period to end April should be the best season for both prices and crop but this year the tea industry has lost almost 7 per cent of production.
He noted that prices have also dropped and in addition to this some of the markets are showing concern over the current situation in Sri Lanka.
Japan which is one of the critical markets for Sri Lanka’s Ceylon Tea is found to be jittery again as they are expressing concern over availability of stocks in future if the current scenario of increased costs would continue.
Already about 5 per cent of the orders have been cancelled and producers have been informed that this quality cannot be continued if costs should increase.
In addition the recent incident over the suspension of three workers on the Udaradella estate has also created quite a stir.
Minister Jeevan Thondaman who is also the leader of the estate worker’s Ceylon Workers Congress told the Business Times that Sri Lankans turn a blind eye to the realities of the trade unions and the exploitation of workers. He noted that they have proposed to provide a transitionary wage through a five year plan.
He said that they were awaiting confirmation from the state plantations to make the increased payment of wage to the workers and that so far Elkaduwa Plantations had started to pay Rs.1700.
In the meantime, the smallholders are struggling on their front with increased costs as fertiliser prices soar and climate impacts like the sudden flooding recently that led to estates becoming inaccessible.
Most smallholders are finding it hard to survive and some are selling their lands since this is more viable than running them at current prices.
Overall annual production that was once at 300 million kg of exports is currently at 250 million kg. Decline in quantities and increase in costs with sudden shocks like glyphosate bans, fertiliser bans and surge in prices of inputs for an industry that was contributing to increased export revenue does not brew well especially with the country’s export markets.
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