The sharp increase in cash wages in the plantations of West Bengal and Assam is an opportunity for planters in both States to switch to the South Indian model of heavy mechanisation and higher productivity, said the Tea Board’s first Non-executive Chairman, PK Bezboruah.

In Bengal, the cash component in wages — there are non-cash components, too — will increase by a whopping 33 per cent to ₹176 a day from October 1. That’s a rise of ₹44.

In Assam, the government ordered an interim increase of 22 per cent to ₹167 a day, ₹30 more than the current wages. According to the latest reports, estates in the Cachhar area of Assam refused to hike wages beyond ₹15.

While South India offers double the cash wage, it reports three times higher productivity per man-day due to mechanisation, reporting lower per unit cost of producing black tea.

The plantation industry in Assam maintains the manpower at the January 1, 1969 level.

“To cut costs, the tea industry should pay high wages and employ less people,” said Bezboruah, a former banker educated at Wharton and IIM-Calcutta.

He was talking to BusinessLine on the sidelines of the annual general meeting of the Tea Research Association.

Falling valuation

Asked if the series of recent acquisitions of tea estates indicate the good health of the industry, Bezboruah said the valuation of Assam gardens had declined by 30 per cent over the last six months and may decline further due to concerns of future wage cost.

“At the moment, ₹350 a kg is the equilibrium price. If the costs goes up, valuation will decline further,” he said, adding that while some had entered the plantation business with the hope of backward integration, some deals were sweetened by real estate offers.

“They are entering because they have money. There will be no profits (from the gardens) for next couple of years,” he said.

Bezboruah also has family interests in plantation.

‘Dismantle labour line’

On the industry’s persistent demand that the government should bear the social costs (subsidised foodgrain, education, health, etc) as mandated in plantations, Bezboruah said the “labour lines should be done away” and the land may be carved out of the estates.

The ‘labour line’ is a source of a huge social problem in North India, particularly in Assam. As the tea workers were brought from Central India, they have no land rights and remain dependent on the estates. This is increasing the population pressure in gardens.

However estates rarely talk against the practice, as tea workers keep bringing family members to the garden, ensuring an assured flow of workers.

Carving out labour lines will help roughly 10 lakh tea tribe population enjoy rights and privileges, and reduce the social cost expenses of the estates.

‘Redundant laws’

Earlier, speaking at the AGM, Basudeb Banerjee, former Board chairman and former West Bengal Chief Secretary appealed for immediate amendments to the Tea Act, 1953, and Plantation Labour Act, 1951, to allow market forces greater play in the tea industry.

Banerjee said the laws, drafted in the Control-era when tea was a major forex earner, were making the industry over-regulated.

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