- Producers have no say in deciding prices at auctions
- Cost of tea production in Sri Lanka is the highest while labour output is the lowest in the world
Responding to the scathing remark made by President Anura Kumara Dissanayake at the ‘Economic Summit’ recently over the inability of Regional Plantation Companies (RPCs) to pay the promised daily wage of Rs. 1,700, spokesman for the Planters’ Association (PA), Dr. Roshan Rajadurai said he did not know on what basis the President made such a remark when RPCs fulfills all its statutory obligations to its employees unlike some of the state-owned plantation bodies that have failed to do so.
“Compared to the 40 odd wages boards we are the highest paying entity which offers all the statutory and traditional benefits to workers,” Dr. Rajadurai said.
Besides, he said no company could pay its workers beyond what it earns.
Sri Lanka has the highest cost of production among tea producing nations while having the lowest productivity level compared to Kenya, South and North India which notches 60kg, 50kg and 34kg per worker. Tea daily labour wage in Kenya is Rs. 960, South India Rs. 1,218 and North India Rs. 696.
How could companies pay an unrealistic wage when the cost of production is Rs. 86 per kg of green tea.
If the 500,000 tea smallholder pluckers who are paid Rs. 40-50 per kilo of Green leaf without any statutory and traditional benefits, the 100,000 RPC pluckers receive; tea smallholder pluckers receive only Rs. 900 for 18kgs but if they are productive and could pluck over 30kg and earn over Rs. 1,500.
According to the planters, tea consumption is rapidly dwindling globally with an excess of over 300mn/kgs (More than our annual production) and world tea prices are currently at US$2.
“The producer has no say in the selling price but has to accept whatever the buyer offers,” Dr. Rajadurai said adding that the producer has to sell tea weekly as tea is a vegetative leafy crop that grows 365 days. Unlike other crops, harvesting of tea leaves cannot be delayed.
The President said in 1991, the Government provided companies with certain benefits but even after 32 years, a plantation worker still doesn’t earn more than Rs.1,700 daily. “This raises questions about the success of those companies,” the President said.
Former President Ranil Wickremesinghe in 2023 requested RPCs to engage in a collective agreement concerning the wage hike for plantation workers, aiming for a minimum of Rs.1700, as per their request.
However, plantation companies have repeatedly stated that they are unable to offer the Rs. 1,700 daily wage proposed by the former Government as it is not realistic given the high cost of production and drop in global tea market prices. Tea exports for December 2024 totalled 22.56 million kgs, showing an increase of 1.81 million kgs vis-à-vis 20.75 million kgs of December 2023.
