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Qualitea (Pics by Rasika Kotudurage)

Collective disagreement and its collateral damage

She stood barefoot on the scorching hot paved road, a Pottu smack in the middle of her forehead. For her 51 years she had not aged too well. Born to the estate, years of tea plucking have taken its toll on Mahespari. With no one to call her own save for her brother, with whom she lives, Mahespari is married to the New Valley Estate.

The minimum harvest of tea leaves required of people like Mahespari, per day, is 16 kilos, for which they are paid a minimum daily wage of Rs 459 plus attendance allowance, price share supplement and other incentives. “Anything below 16 kilos is paid Rs 200,” said Mahepari. “Even 14 kilos is paid Rs 200,” said Mahespari in a complaining tone.

Negotiations on the Collective Agreement, between the three major plantation trade unions and the Employers’ Federation of Ceylon, which would resolve most of these wage issues, is currently under ways and it seems that the unions cannot reach an agreement on the terms. The negotiations were apparently stalling due to the prevalent political situation as well as the existing Tea Industry crisis. The three major trade unions involved in the agreement are the CWC, Lanka Jathika Estate Workers’ Union (LJEWU) and the Joint Plantation Trade Union Centre (JPTUC). The agreement which was previously signed in 2011 expired on March 31 this year.

When asked whether she knows anything about the said Collective Agreement, Mahespari answered in the negative. “Unions don’t tell us anything. They just turn up around elections,” said Mahespari. According to her, workers in general are not informed about how their salaries are calculated, nor are they consulted at any decision making stage. In fact estate owners are yet to address demands laid down on earlier occasions including providing workers with the basic facilities for a decent living. costs
On the contrary the industry argues that a mere Rs 50 increase on the basic wage alone would result in an increase of cost of production by Rs 22. “The estate workers are fully aware of how their salaries are calculated,” said Bogawantalawa Tea Estate Regional General Manager, UK Navaratne. “In fact we have offered them another afternoon shift under a separate daily wage of Rs 450 for fertilizer application and weeding, but none of them are interested because they have more lucrative day jobs such as driving trishaws,” said Navaratne.

The minimum daily harvest required from a single tea plucker is 16 kg, for which they are paid a minimum daily wage of Rs 450, price share supplement, attendance allowance for 75 percent attendance and other incentives. This amounts to something between Rs 620 and 688, according to Navaratne. Every kilo plucked over the minimum 16 kg is paid Rs 23.

“The unions want to bring down the minimum harvest of 16 kg, but the truth is that the pluckers can easily meet this amount with their eyes closed,” said Navaratne. He pointed out that the negotiations on the Collective Agreement are stalling because of union rivalry. He opined that the situation called for government intervention.

Labor costs account for 67 to 70 percent of the total cost of tea production. Tea producers argue that cost of production cannot be reduced unless labor productivity is increased. “But then again, there is no point in increasing production because every extra kilo we harvest is a loss,” said Navaratne. He explained that bidding at tea auctions start at Rs 50 to 100 a kilo. “Some tea is too good to be sold at the going price. Such tea is usually re catalogued and sold three weeks later in the next auction.”

Navaratne explained that tea manufacturers are forced to block money often up to a month with no return. “We have already paid wages for workers, on top of that the auctioning and buying process takes up to weeks. The buyers take another week to pay up. All in all we don’t earn the money back for nearly a month.”

All this coupled with the various sanctions and embargoes on Middle Eastern countries, a major Sri Lankan tea buying region, some Regional Plantation Companies report a loss of Rs 70 and Rs 50 per kilo of tea. and quantity
Kenyan tea is of relatively better quality and the yield is higher than those of Sri Lankan estates. Most of the Sri Lankan tea was planted in the 1960s by the British during the colonial age. The tea bushes have been applied with chemical fertilizer and pesticide over many decades, resulting in nutrient depletion of the soil. Countries such as Kenya, that ventured into the tea industry fairly recently has the advantage of their virgin soils that produces higher yield and better quality tea.

In this backdrop the best option for Sri Lanka to keep up with new tea producing countries is to replant tea. Navaratne explained that replanting would mean spending millions of rupees, with nearly four years of waiting for the first harvest. This is why plantations are exploring other avenues such diversification. He explained that in areas where the soil is nutrient depleted replanting is not economically viable. Such areas identified by the Tea Research Institute are earmarked for diversification.

“In such identified locations we plant trees for timber and fuel wood.” Their choice timber tree is eucalyptus. When asked of the potential threat of eucalyptus to the environment, by its excessive water demand, Navaratne explained that the plantations only opt for eucalyptus where the soil is not conducive to other cultivation.

“Kenya’s labor costs are fairly low because their industry is largely mechanized,” pointed out Navaratne. And to compete with such countries Sri Lankan plantations are also trying their hand at mechanization. However mechanization can be a costly affair. According to Navaratne a tea plucking machine costs around Rs 100,000.

When asked whether estate workers will be affected by this sort of diversification, Navaratne explained that it takes over seven to eight years for timber trees to reach maturity. “By that time most of the current generation of estate workers would be in their retiring age. The new generation has no interest in working in the estate anyway.”

Navaratne pointed out that encouragement for education in Sri Lankan Estates is very high compared to other tea producing countries. This has resulted in an annual drop between five to ten percent in new additions to the labor force.
In concurrence New Valley Superintendent and Ceylon Workers Congress Trade Unionist, V Shakthivel said, “I have two sons, one of them is working at the Munchee factory in Norwood. We don’t like our kids to move away from us, but we also want our children to do better.”

New markets
As a means of dealing with the tea industry crisis, tea producers are now looking into new markets as well as diversification with various types of tea. White or silver tea is an expensive type of tea produced using only the bud of a tea grown especially for the purpose. A kilo of white tea sells for Rs 17,000 to 18,000. White tea also involves a special production process where the bud is sun-dried.

“We have converted part of our estate to cultivating organic tea,” said Navaratne, explaining that health consciousness has created a niche market for organic tea. However, producing organic fertilizer requires costly investments. “One hectare of organic tea cultivation and harvesting costs Rs 400,000, where as a hectare of inorganic tea costs only Rs 48,000.”

He explained that even with the existing tea crisis the government offers no tax concessions on new imported machinery.

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