The Hindu Business Line : To reduce tea growers' woes

IN an effort to reduce the burden of social cost borne by the tea-producing companies, the Union Commerce Ministry is closely studying the Sri Lankan model.

According to sources, Government officials are aware that the huge social cost of the tea producing companies is making them uncompetitive in the global market. However, there is hardly any way to reimburse a part of this cost.

According to statistics available from the Indian Tea Association (ITA), the average cost of tea production is $1.62 per kg, of which $0.81 is spent on the labour account. Sri Lanka's cost of tea production is $1.23 per kg and its labour cost is $0.74 per kg.

"The Sri Lankan Government reimburses 75 per cent of the housing cost borne by the tea companies towards its employees. We are trying to work out some sort of a similar scheme but nothing has been finalised yet," the sources told Business Line.

Indian tea companies bear more burden than just housing. It provides foodgrains at concessional rates, free medical facilities, primary education, proper roads, water supplies fuel and electrification of labour quarters. This apart, the tea companies also pay statutory benefits such as provident fund, bonus, gratuity and others.

The Union Government is considering helping the tea companies on this account. Among other things, it was contemplating channelising a part of the funds earmarked for rural development to the tea companies through local government bodies such as the panchayats.

"If that option is to be implemented the tea companies would have to allow representatives of panchayats to visit the gardens and monitor the living conditions of workers on a regular basis," the Government sources said. In all probability, this option would not be acceptable to tea company managements.

According to the report prepared by the consultancy firm, Accenture, India has the highest production and labour cost among all tea-producing countries. The cost of tea production in India has increased by 38 per cent between 1998 and 2001. Even in terms of productivity, Indian industry is not too well placed. For example, in Kenya, a worker plucks 33 kg of green leaf every day. In India it is between 22 and 25 kg. In Kenya, the average yield per worker is 1026 against 748 in India.

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