Kerala planters stumped by wage hike

The labour strike that crippled the tea, rubber, coffee and cardamom plantations in Kerala for 17 days in September-October has caused a loss of ₹140 crore to the plantation sector and together with the 30 per cent hike in the wages, the loss this financial year will be huge, says C Vinayaraghavan, Chairman of the Association of Planters of Kerala.

“At a time when the prices of tea and rubber are falling, the increased wage bill is a huge burden on the plantation industry,” Vinayaraghavan told BusinessLine .

“On one hand, the prices of commodities are falling and, on the other, the cost of operation is rising sharply.” The APK had, at the meeting of the tripartite Plantation Labour Committee meeting (represented by the government, the managements and the unions), held on Monday, agreed to pay the increased wages from November (to be paid in the first week of December).

After several rounds of conciliations in the wake of the strike, the plantation managements had, on October 14, agreed to raise the basic daily wage of tea workers from ₹232 to ₹301; of rubber workers from ₹317 to ₹381; of coffee workers from ₹237 to ₹301 and of cardamom workers from ₹267 to ₹330.

He said the APK had not gone back on its commitment made at the October 14 talks, though the industry was in red because of the uneconomical prices. He claimed that at the current prices, the tea plantation companies would now be making a loss of ₹47 on every kg of tea they produce.

The loss for rubber plantations would be ₹55/kg while the cardamom planters’ loss would be a hefty ₹186/kg.

He pointed out that the wage bill was by far the largest component of the cost and that the average daily wage of plantation labour was the highest in Kerala when compared to other States. Apart from the wage bill, he noted, the bonus which now as 20 per cent, was another major component.

“In Tamil Nadu, the bonus is around 12 per cent, but we are now forced to pay 20 per cent,” he said. “We have urged the Labour Commissioner to stick to the statutory bonus rate (8.33 per cent).”

Vinayaraghavan urged the State government to help the industry to tide over the current crisis by giving tax breaks and other concessions. He also wanted the government to ask the local self-government authorities to take care of water and power supplies to the labour quarters which are currently paid for by the plantations.

He agreed that the labour quarters on many plantations were in a bad shape and asked the government to give soft loans to the managements to undertake maintenance and repairs to the quarters.

Our Bengaluru Bureau adds: Meanwhile, President of United Planters Association of India (Upasi) N Dharmaraj said the enormous increase in wages of plantation workers in Kerala was not sustainable and would lead to further losses in the sector.

“It is going to be a huge set back for the plantation sector,” Dharmaraj told reporters in Bengaluru ahead of the annual conference of Karnataka Planters Association.

Planters, who are already losing ₹20 on every kg of tea and coffee produced due to the low prices, would lose another ₹10 due to the impact of the wage hike, he said.

Further, the wage burden may lead to job losses and closure of estates, Dharmaraj said.

Planters in Kerala, who were forced to accept the wage increases, have asked the government to provide some relief in the form of removal of plantation tax and waiver of agriculture income tax.

“The government has not come back on this,” he added.