July 14, 2015 (LBO) – Sri Lanka’s regional plantation companies (RPCs ) said they are raising the daily pay for 1000 rupees to meet labour union demands but only if workers agree to improve their productivity and pluck more tea.
Plantation worker earns 620 rupee wage at present.
“While the RPCs are finding even the present daily wage to be significantly above production costs and are experiencing negative cash flows, nevertheless, being conscious of the needs of workers, they have made the following proposal.” Regional plantation companies said in a statement.
RPCs say that they have proposed an 11 percent increase in the basic wage to 500 rupees (from Rs. 450 at present) for a minimum daily plucking average of 15kg of tea leaves.
Each additional kilogramme plucked will be paid for at 40 rupees (an increase from the Rs. 23 paid at present), thus enabling a worker who plucks 25kg of tea leaves to earn 1,000 rupees a day which includes EPF and ETF.
The productivity based proposal of the RPCs have been presented to and discussed with the estate sector trade unions, the statement said.
“An unconditional increase of the daily wage to 1,000 rupees is impossible at present, as it would require the average revenue from a kilogramme of tea at the Colombo Tea Auction to be 660 rupees, for a plantation company to merely breakeven,”
RPC’s say that in June 2015, the average price of a kilogramme of tea at the Colombo Tea Auction was only 400 rupees (according to broking firms) while the production cost of a kilogramme of tea at present exceeds 450 rupees.
The Planters’ Association of Ceylon, which represents the interests of the 22 Regional Plantation Companies, urges Trade Unions to seriously consider the proposal of the RPCs as it offers the only viable alternative to mitigate the present crisis in both tea and rubber industries, which even the government has recognized in providing certified prices to smallholders.
While rubber prices have slumped to historic lows, key export markets to which more than 70 percent of Ceylon Tea is exported – Russia, Middle East and Ukraine – is in crisis due to military conflict, economic sanctions and depreciation of the Russian Rouble etc, the statement said.
“There is significant room for improvement of productivity, particularly through increase in ‘effective plucking time,’ (time actually spent on the plucking of tea) as both the labour productivity and effective plucking time is among the world’s lowest in the tea industry in Sri Lanka – despite wages and other benefits including housing being among the best among tea producing economies,”
While the daily plucking average of a tea plucker in Sri Lanka is approximately 18kg, in Kenya and Assam- India the figures are 48kg and 28kg respectively.