Agri Business

‘Wage rise will cause long-term damage to plantation sector’

KPM BASHEER Munnar | Updated on January 22, 2018

The Association of Planters of Kerala Chairman C Vinaya Raghavan has said the ‘huge increase’ in the Basic Daily Wage of the tea, rubber and cardamom workers following a ‘forced’ agreement between the managements and trade unions will cause a huge burden of additional loss to the plantation sector.

“This is going to push the companies (such as Kanan Devan and Harrisons Malayalam), which are already making huge losses because of the high cost of production and low commodity prices, into deep red,” Raghavan told BusinessLine on Thursday. The impact of the wage rise would make long-term damage to the plantation industry, he said.

He claimed that as of now tea companies were making an average loss of ₹36 on every kg of black tea produced. This was because the average cost of production per kg was ₹120. With the basic wage increased from ₹232 to ₹301 following the wage agreement reached on Wednesday, the cost of production of a kg of black tea would now go up, he claimed, to ₹136. Since the average market price now was ₹84, the tea producers’ loss per kg would rise to ₹52.

The rubber-producing companies too would be in a similar predicament, Raghavan said. Currently, they were incurring a loss of ₹21 on every kg of natural rubber produced. With the increase in the basic daily wage of rubber tappers, the cost of production would go up to ₹140 a kg. At the present average price of ₹110 a kg for natural rubber, the loss per kg for the companies would rise to ₹30. This would again go up if the cost of ₹30/kg if re-plantation was taken into account, Raghavan said.

However, the Pompilai Orumai coalition of women workers at Kanan Devan tea company said the increase in the wage was ‘totally unsatisfactory.’ Lissie Sunny, who has now been elected President of the Orumai, told BusinessLine on Thursday that the increase was a massive let-down for the workers. She alleged that the organised trade unions (which are different from Orumai) had misled the workers promising to secure ₹500 as daily wage. “It’s a big treachery on the part of the organised trade unions who have agreed for ₹301 as the daily wage,” she said.

However, she claimed that the ₹69 increase in the basic wage itself was because of the agitations by the Orumai, not of the recognised unions. “It’s our achievement, and the entire credit goes to our struggles,” she said. She said all the Orumai workers would return to work from Friday. “We are temporarily suspending our strike,” she vowed. “We will resume our strike after the local bodies elections are over.”

Published on October 15, 2015

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