Editorial

Next to water, tea it is said, is the most consumed beverage in the world. And at the United Nations headquarters in New York last week, the spokesman for the world body referred to Sri Lanka in glowing terms (for paying its annual membership fees in full despite its financial crunch) and then said: “it’s a great place to have black, white and green tea.”

In Sri Lanka, however, there were ‘Theatrics in the Thottam’ (tea garden) as the headline for our front page picture described a Cabinet Minister wearing his other hat as a labour leader performing for his supporters, finger-wagging at estate managers and laying siege in front of the local police station. He denies he did anything wrong. He was only backing his members, he says.

The impending elections have much to do with these theatrics. It all started with the President making a sudden May Day announcement that plantation workers must be paid a minimum daily wage of Rs. 1,700. The large management companies and smallholders were up in arms straightaway claiming what they called election gundoos (stunts) were going to cripple their balance sheets and run them to the ground.

Emboldened by the vote bank available for prospective candidates at the elections, and the financial backing of the Indian Government, the union leaders of the area were showing their colours.

The Presidential directive is also applicable to the rubber and coconut industries and will have trigger effects on demands for higher wages from other allied workers in these industries like factory workers, watchers and drivers.

Sri Lanka’s tea industry, once its mainstay in terms of foreign exchange earned, has long been tottering. It has been unable to rise to the potential it ought to have had and lost out to new entrants to the world market, especially Kenya, which has beaten Sri Lanka in the volume of tea exported by almost double. Sri Lanka has also lost out to other countries entering the value-added market for tea (which makes Sri Lankan tea more expensive than Kenyan tea) with the UK, Egypt, Pakistan etc, doing the value additions.

A one million Euro (€ 1 million) French-funded project branding CEYLON TEA as a well-known international Geographical Indication (GI) and an Intellectual Property mark in line with the famous Appellation d’ Origin for French wines to protect it from counterfeits has been struggling to get off the drawing board.

Strikes and labour unrest have not helped. But these are not the only factors for the decline of the tea industry. Over-fertilisation for decades has affected soil. Then came the opposite, the non-fertilisation due to sudden Presidential orders; and the excessive use of chemical weedicide, all of which have led to toxic levels in manufactured tea leading to bans by countries like Japan. Poor overseas marketing strategies have made Sri Lankan teas lose market share drastically. Ten years ago (2013), Sri Lanka earned USD 1.5 billion exporting 319 million kilos. In 2022, the earnings dropped to USD 732 million exporting only 250 million kgs.

One of the issues that caused the recent blow-up on the tea gardens was that a particular estate at the epicentre of the crisis was planning to diversify from tea to coffee, a move opposed by the workers. It is time the Plantations Ministry thought of diversifying from unproductive teas giving low returns, and studying world consumer trends that are heavily weighted towards coffee drinking. Again, Kenyan coffee is world famous, while Sri Lanka which gave up coffee centuries ago due to a blight, never returned to the crop. It is time it did.

For the labour unions, their days of flexing their collective muscle could be numbered as well. Droves of the Gen Z, are no longer interested in working on the inhospitable plantations. The women especially are migrating to the major cities for jobs in supermarkets, beauty salons and spas. Life – and work in the plantations are changing. It’s a two-way street for both the employers and the employees.

Without workers, the management will face bigger issues. Mechanised agriculture in the traditional sense is yet not an option given the terrain, unlike in Kenya where the estates are on vast flat ground. However, drone agriculture and AI are the future. If these companies collapse financially, it will only accelerate the worker migration process which in turn will weaken the power base of the unions.

Notwithstanding the occasional flash-points on the plantations, it is in the best interests of not only both the management companies and the unions, but also the country as a whole, that cool heads prevail bringing about some amity between them.

They must swim together with the national interest paramount. Only then can Sri Lanka remain a “great place for black, white and green tea”, as the UN spokesperson said.

Concerns over IMF programme

 

President Ranil Wickremesinghe has earned another feather in his cap with the IMF this week granting another tranche to keep the country’s economy afloat. Not many are, however, willing to give him that credit.

As for him, his propaganda machinery has been unable to reap the deserved political mileage for a remarkable feat in stabilising what was a shattered economy only two years ago. His astute handling of lender countries in the debt negotiations has been lost in the counterarguments trotted out by Opposition campaigners exploiting the hardships the people have had to endure in the process of swallowing the bitter medicine prescribed by the IMF. No specific alternatives have been made though.

The IMF statement on Wednesday says Sri Lanka’s economy is on the road to recovery, and its foreign exchange reserves that were as low as USD 500 million in 2022 are now at USD 5.5 billion. It points out where the economy has done well and not so well and says the path to debt sustainability is “knife-edged”.

Policy direction following the elections seems to clearly be one of the IMF’s concerns. Despite having met the Opposition contenders for high office, and whatever has been said publicly and to them at closed-door meetings, it betrays a sense of uncertainty among the lending agency on the future of its own bailout programme for Sri Lanka. This uncertainty should worry the discerning Sri Lankan public as well.