Sunday Island Editorial

Challenges confronting tea

25 September 2016

Lankans are generally aware that the tea industry is in deep trouble with both production and earnings falling. The Regional Plantation Companies (RPCs) which run most of the large estates taken over by the government under the land reforms are carrying huge losses and facing wage demands from their workers. The cost of production has been running way above auction prices particularly in the larger estates carrying high overheads. For many years now smallholders, particularly in the low country, have outstripped production in RPC estates. While these holdings and some 50-acre proprietary properties continue to do a little better than break even, profitability is much lower than what it has been for some years. The government has been subsidizing smallholders for low green leaf prices and the head of the Planters Association recently went on record complaining of unequal treatment of RPCs. Given the state of government finances, hopes of the estate sector being similarly compensated for low prices must remain no more than a pipe dream.

While we keep boasting that Ceylon tea is the best in the world, production in our plantations fall well below what is achieved by our competitors both in India and Africa as well as the lesser producers elsewhere. Our workers are also better paid than their counterparts in other countries adding to the woes of plantation owners. No doubt our tea retains its reputation for quality as evidenced by the fact that auction prices in Colombo are higher than those at other sales centers. But this is scant consolation at this time when producers are in the red. While smallholders mostly use their own and family labor, the big estates are confronted with labor shortages. Given that wages particularly in the construction industry is way above what obtains in the plantations, male workers seize available opportunities. A large number of estate women have opted for domestic service, both at home and abroad. This is less demanding than plucking tea in the heat of the blazing sun or in rainy conditions. Earnings too are better especially when employer- provided food and accommodation is factored into the equation. The result is that many estates find it difficult to get their crops in and other field work done. The problem has been compounded by the recent ban on the import of glyphosate, a weedicide widely used by tea plantations.

Plantation Industries Minister Navin Dissanayake is acutely aware of the problems confronting the tea industry and has been speaking out on the subject recently. A few days ago he indicated that he was hopeful about getting the glyphosate ban relaxed so that tea estates can continue cheaper chemical weeding without resorting to manual forms of weed control for which there is no labor in any event. But given what proponents of the ban such as the influential Athureliye Rathana Thero of the JHU have said subsequent to the minister’s statement, whether he will succeed in these efforts is an open question.

The issue is emotive in the context of the kidney disease that has taken many lives in the North Central Province being believed by some to be the result of pollution of ground water by toxic chemicals. It is not only tea growers who use glyphosate. Paddy farmers also use this chemical for weed control. A possible via media that Minister Dissanayake seems hopeful about navigating is to restrict imports for the tea sector only. Inevitably questions will be raised about leakages. Given past experience these will never be wholly plugged.

What is the way out of the impasse confronting Sri Lanka’s plantation industry? The days when the economy was totally dependant on the tea-rubber-coconut tripod are long gone. As is well known, both garments and expatriate worker remittances have years ago overtaken the contribution made by tea to foreign exchange earnings. There were times when prices were so poor that rubber smallholders stopped tapping their trees. Rubber too has been bedeviled by low prices in recent times. While we are still some distance away from stopping plucking our tea due to the current woes of the industry, there is no way in which RPCs are going to be able to meet the current wage demands. They have been talking about productivity linked wages which the unions have rejected. Some estates have in a small way attempted to apportion extents of estate land among workers who are required to look after and harvest the crop from such parcels and deliver the leaf to the factory. They will be paid no wages but will be paid for the leaf they bring in at going prices. It has been claimed that both productivity of the land and earnings of workers have improved under this method. But whether this can be worked on a large scale and if both parties will cooperate to set up a new model remains to be seen.

New and innovative methods will have to be devised and implemented to meet the almost insurmountable challenges confronting the tea industry. Tea earnings up to August this year have been the lowest since 2007 and production has hit a seven-year low. There are a few bright spots including increased exports to China, Germany and the US and some slight upward price movements. But these hardly cause a dent in the overall problem and with the best will in the world a cash-strapped government will not be able to throw a lifeline to tea growers. The industry will have to fend for itself and all stakeholders must put their best foot forward to do so. Cooperation rather than confrontation must be the buzz word.