The Hindu Business Line : Planters decry move to unfreeze DA

THE recent announcement by the State Labour Minister, Mr Babu Divakaran, unfreezing DA for tea and coffee plantation workers has put the State plantation industry in a spot. The move, according to the industry, will affect the crisis-ridden sector badly.

The defreeze of DA in the plantation sector without an increase in labour productivity will force managements to close down many units in the State, Mr V.P. Nambi, Chairman, Association of Planters of Kerala (APK), said at a press meet here on Monday.

He said plantations are still making a loss of Rs 10 to 15 per kg of tea sold through auctions.

"On the one side, the Government is exerting pressure on the estates which are closed to re-open, but decisions like this will only force many more to close their operations," Mr Nambi said.

The association felt such short-sighted and unilateral decisions would make things worse for the tea and coffee sector. The unreasonable increase in wages without any linkage to productivity and without looking into the paying capacity has forced the industry to either close down or to migrate to other States, he said.

Mr Nambi pointed out that the de-freezing of DA would result in a price hike of Rs 5.64 for each worker taking his one-day wage to Rs 82.9 from the present Rs 77.

The managements of various units are not in a position to de-freeze DA for the time being as the crisis had exposed the cost vulnerabilities of the plantation sector, he added.

The argument put forward by the trade unions that the price of tea had gone up will not stand since, a rise in the price by Rs 3 to Rs 4 per kg cannot bring back an industry which has been in the crisis for the past 6 years, he said.

It may be recalled that the management representatives had agreed to de-freeze DA in rubber from October 2003 taking into consideration the improved situation, he said.

Speaking on the occasion, APK executive committee members pointed out that though the wages had increased in tea plantations in recent years, there has been no corresponding increase in productivity. The plucking average in Tamil Nadu is less than 25 per kg, while in Kerala it is around 16 per kg.

Likewise, the price of tea in 1996 was Rs 41 per kg and the average wage per worker was Rs 50.75.

Today, the price is in the range between Rs 47 and 48, while the wages had touched Rs 82.90 for each worker. Moreover, productivity- linked wages had come down to 50 per cent.

The productivity growth is the lowest in the tea plantation industry, they said pointing out that 65 per cent of the cost in the sector goes to wages alone. In other industries, the wage component does not exceed more than 10 per cent, they added.

The association also pointed out that the trade unions in Tami Nadu had on their own agreed for a wage reduction by 10 per cent considering the grim situation in the tea industry.

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