The Hindu Business Line : Plantation sector worried over low prices for tea

The sale realisation of tea at the Kochi auction continued to decline. In the three weekly sales this month, the price realised at the auction has dropped by Rs 7-8 a kg, industry sources said.

This is the seventh year the tea plantation industry is facing such a crisis. The mismatch between the cost of production and sale price realisation continues to remain unabated and the current low sale price realisation has only deepened the crisis, they said.

The sale price average during the same period last year was Rs 55 a kg and the price realised currently is Rs 47 a kg, they said. Hence, it is time that all the stakeholders take a serious view of the situation and take drastic steps to save the plantation industry.

Increase in labour productivity, wage freeze and the Government bearing part of the social costs are a few important and urgent measures that need to be taken, the sources claimed.

Given this situation, the Association of Planters of Kerala (APK), had sought the co-operation of the trade unions not to press for the minimum wage revision and to come forward for settling the wage issue on a realistic and pragmatic basis.

The APK came out with the request given the low prices of tea, coffee and cardamom. "Without a substantial increase in labour productivity, there is no chance for the tea industry to survive by paying even the present wages, leave alone the proposed high minimum wages," it said. The financial crisis in the south Indian tea industry, in general, and Kerala, in particular, was acute, it said.

According to official figures of the State Government, 37 plantations have been closed down in the State and the Government formed district relief committees and is providing some relief care to the affected workers.

The rest of the estates are surviving either because they are part of composite plantation companies with other profitable crops such as rubber or because the pure tea companies are paying only a portion of the wages due to the workers as advance, and the workers trade unions and the Government authorities realising the helplessness of such plantations, have not been making an issue of the non-payment of the wages, it claimed.

The year 2003 was the worst in the tea crisis saga. The slight improvement in prices during 2004 kindled some hope that the industry might be on the way to recovery. But the trend does not seem to be encouraging, it said.

The South Indian average price, which was Rs 68.50 a kg in 1998 had crashed to Rs 41.63 in 2002 and that further dropped to Rs 39.90 in 2003. The average price increased to Rs 47.01 in 2004, and the first three-week average of January 2006 has touched that level.