22 January, 2021

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How To Pay More Than Rs1000 Per Day To Tea Estate Workers

By Remy Jayasekere – 

Remy Jayasekere

In the recent past there have been several articles written opposing the government decision to increase the wages of tea estate workers. On the 22nd November 2020, the Island newspaper published an article titled “Tea industry experts willing to learn the magic formula …” written  by a spokesman for the Planters’ Association. Its theme was that under the present conditions it is not possible to increase wages.

There is a 1000 acre tea plantation called Nerada in far north Queensland in Australia (neradatea.com.au). It produces 6.6 million kg of leaf and 1.6 million kg of made tea annually. Total labour force is less than 50 and the factory is manned by 4 people in a shift. The minimum hourly wage in Australia is about AUD 20 or around SLR 2,500 which works out to SLR 20,000 for a  8 hour day. Nerada pays above minimum wages so that they can retain talent. Leaf plucking is done by one machine for the whole plantation – therefore there is  only one tea plucker at any time and plucking is a 24 hour operation. The plantation is family owned and they have developed all the technology themselves – no Tea Research Institutes or Tea Boards.

If Nerada can pay  SLR 20,000 per person per day why can’t Sri Lanka pay SLR 1000 per day? The answer is simple – at Nerada 50 people produce 1.6 million kg of made  tea annually which works out to 32,000 kg per person annually. This is worth about AUD 150000. Pay the worker AUD 50,000 per year and the company has AUD 100,000 per person per year for other things. This has been achieved through innovation which has resulted in mechanisation and automation of processes.  SL has not innovated, continuing to do things the way they have been done for ages. This could be the net result of many decisions taken in the past such as nationalisation of the plantations, regional plantation companies (RPC) not owning the plantations, therefore milking them rather than developing them and general backwardness of the country in developing and employing modern technology. 

RPCs have managed the plantations for more than 25 years and if they are interested in developing the plantations, they had ample time. However, they have chosen to remain in the dark ages without any innovative thinking and actions and now are arguing against wage increases. SLR 1000 is around  USD 6 per day which is not much higher than the extreme poverty level defined by the UN. The actions of the government, the plantation companies and the planters have made sure the workers remained in poverty during the past and now want to ensure that continues into the future. 

In the 1980s Singapore had the problem of being turned into  a large garment manufacturing centre which they did not want. The government increased the wages of garment factory workers – the message was innovate and produce more per worker or close down. History shows they all closed down and engaged in other pursuits. The Sri Lankan government should be congratulated for taking this bold step of increasing wages – the message is clear, innovate or we will change the agreements. How can you let the RPCs hold a large proportion of the population as well as the economy of the country hostage. 

What is stopping us from using a company such as Nerada as the benchmark and trying to achieve what they have achieved. Let me list a few steps.

1. Green leaf – Nerada produces 6600 kg per acre per year. Considering it is one plantation, as a country can we aim for at least half of that. I am sure everyone knows what to do – the list is long. Definition of innovation – 5% is knowing what to do and 95% is doing it. 

2. Plucking – This possibly is the highest cost item in the production of tea in Sri Lanka. Two excuses are given for not mechanising plucking – the terrain does not allow for mechanised plucking and mechanised plucking reduces the yield. New replanting areas should have the terrain modified to enable mechanised plucking. The myth of reduced yield does not stand against evidence from Nerada

3. Factory – There are more than 700 tea factories in Sri Lanka employing large numbers of people. Factories in some areas cannot find enough people to man them. Most of these people are used for transporting material from one process or machine to another and in some cases to watch and operate machines. At Nerada all these operations are automated and only 4 people are required in a shift. Why not scrap the existing factories and build new ones – the payback will be very quick. One of the big problems in the past was trying to modify existing factories which limits possibilities. Do not think outside the box. Think there is no box.

4. Then there are other minor things that go beyond what Nerada has done – using solar energy for the driers and using dehumidified air for withering. Nerada has no need for producing dehumidified air as the humidity in that area is very low. 

5. The workers cannot do anything about these. The government, RPCs and management have to take the initiative to improve our plantations. There are no bad soldiers – only bad officers

I believe I have made a case for increasing wages of plantation workers and hope the RPCs will look at this in a positive manner.

*Remy Jayasekere – Chartered Engineer

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Latest comments

  • 6
    2

    The tea industry operates on a three tier structure. The plantations, the broker and the seller. In true capitalistic style, the broker and the seller makes maximum profits, while the lowly Indian labourers live in line rooms. The Plantations went through few stages after post-independence. As the Europeans either left or died, they were bought by few wealthy Ceylonese, which then taken over by the Srimavo Government, Under the open economy of JRJ , it became semi-government and semi-private . Then in 1990’s it became a complete mess. Few families likes the De Soyza’s manged to hang on to their estates like, (Gartmoor, Maskeliya). Now Anyone with money can buy a tea plantation.
    Get rid of the middle-man, / broker and the savings can be transferred to the hardworking Indian Tamils . There is no need for brokers. An Ministry of Finance controlled Tea Bureau can evaluate the standards of the respective high-grown and low grown teas and it can be directly given to the Sellers- Nearly all , Pareses, Boras, Muslims, and Christians.

    My father, grand-father and great-grand-father ( The first native Ceylonese to own a plantation – High Walton, Matale, 1880’s ) were Tea planters, and it is shameless that Sri Lankans , specially the Buddhist’s have permitted the continuous exploitation of Indian indentured labour. While the yobs in Colombo, mostly Muslims and Christians rake in all the money.

  • 4
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    “In the recent past, there have been several articles written opposing the government decision to increase the wages of tea estate workers.”

    I am truly shocked and appalled to hear this. These articles have been published at the behest of shameless and selfish exploiters. These fellows are no better than the pimps who live off the earnings of sex workers.

    The root cause of the problem is the sharp division of the tea industry into the manufacturing sector and the marketing sector. The manufacturing sector is being operated at a barely sustainable level whereas indecent profits are made by the marketing sector. There must be a better and more equitable distribution of profits between these two sectors. The government’s taxation and export duty rates on tea also aggravate the situation further, I think.

  • 1
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    dear RJ

    Thank you.

    We should have asked the FP/TULF/TNA to come up with the solutions then in 1948 to date??

    Looking at the deliverables in North and East they certainly would have done the same in upcountry and reduced the number of folks massively solving the Nations issues altogether.

    A party delivered nothing for the entire existence except death and turned the parliament into court room drama.

    Our current GOSL has decided to rewrite history the inks to the public who understood this misery giving the opportunity to rewrite the MOD for cohabitation differently from now onwards.

  • 3
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    Dear Remy
    Its indeed a very interesting and thought-provoking article. Thanks for same. The mechanisation in Australia is an interesting and exceptional case. If we were to take Kenya which stated production of tea in large scale much later than SriLanka. There too they have gradually started to stream line their operations, I believe in the 80s. They are as we know is one of the largest producers and exporters of tea. For tea plucking they are using mechanised methods in certain parts of their estates.
    I will come back and write a bit more later today. By the way I am also an engineer (Chartered in both Mechanical and Electrical Engineering). Less about me
    Ratnam Nadarajah

    • 0
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      Thanks for your comments Engineer Nadarajah. I agree with your comments on Kenya. Look forward to your further comments as promised. Kind regards

  • 1
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    The demand of wages per day for tea estate workers, not later than in 2015 was Rs.1000/=. This was @ US $ 5.46 in November 2015.

    In November 2020, the exchange rate is Rs.1000 = US 7.00

    The tea worker should therefore demand Rs. 1280/ per day and not the outdated Rs. 1000 per day. The Tea Worker Unions have not adjusted their arithmetic.

    The plantations have consistently and obstinately stood by the figure of Rs.1000/ as an impossible amount to pay even after their rupee equivalent has increased year after year.

    The demand of 2015 amounts now to only 1000 – 280 = Rs. 720/

  • 1
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    Dear Folks

    With all the issues kindly shared in mind how we then free the folks fro0m the estates so they can independently seek as citizens of Sri Lanka….seek employment any where else, live anywhere else, enjoy life away from this slavery trap of a hill country, then the Unions and the parties they belongs to will also diversify and integrate into being Sri Lankans and not Indians?? that is exactly what we want that “all for one and one for all” and until we reach this stage we can not free the folks nor could we ask the estates too improve working conditions/wages/industrialisation etc??

    That is what they have done in Countries like Malaysia where the Indian workforce was made literally abandoned outside of all the closing estates and left to fend for themselves. The Indian Congress was not intially not so prepared for this dilemma but with the community help have managed to integrate folks into general life outside off the estates. Some (few) went through criminal routes (used by the local Chinese mafias too) and now is being brought under control too.

  • 0
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    Mr. R. Jayasekere. I have read with great interest the achievements of the Australian Tea plantation, NERADA.What is impressive is their volume of production. No mention has been made in detail re the machinery used and in particular processes of qmanufacture which is required to assess the standard of the end product .
    Whilst I hold no brief for the RPCS It must be admitted that Sri Lanka could never be able to match the production figures of NERADA,. even if good agricultural/ cultural practices adhered here.The topography there, appears to be flat,virgin land throughout the Thousand acres which easily facilitates the maximum use of machinery, and a bare minimum of Human Resources. In comparison our Tea is planted mainly on Hilly terrain that precludes the use of machinery , for harvesting, or be it in for a limited extent. The four workers in the factory which is fully automated indicates the severe Maceration of withered leaf with the resultant high temperatures that is detrimental to the quality and standard of the Tea. A fellow retired planter now in Aussie referred to the standard of this tea as “ Horrendous “.
    The RPCs have the financial resources to pay a living wage of a sum in excess of Rs1000/= to the workers in keeping with skyrocketing cost of living. A few Massive conglomerates run these plantations. They include the RPCs.

    • 0
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      Hello pkota
      Thanks for your comments which are greatly appreciated. Nerada tea is available in most supermarkets in Australia usually placed side by side with Dilma. I drink both and find no significant difference in taste (I am not a professional tea taster of course). Nerada would not have survived this long if the quality was no good.
      The intention of the article was to show what has been achieved elsewhere and what we could use as benchmarks to develop Sri Lanka’s tea industry. Regards

  • 0
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    Hello Remy…I will not dwell on the standard of Tea even though I have been involved in it’s manufacture for more than 3 decades as it will deminish the thrust and title of your post ie how to pay more than Rs1000/= per day to the workers.. It is therefore necessary to elaborate a little further on the workings of the RPCs.The basic difference between the two are that the Tea Small Holders, bought their lands, cultivated them with the Tea crop and are harvesting them successfully. Whereas the RPCS were virtually bequeathed these once flourishing Tea gardens @ Rs500/=
    Per Estate per Annum as lease rentals, which some RPCS are in arrears, besides the EPF dues. The moment they got the estates they made a bee line to the Banks and lending institutions and mortgaged them to the hilt and needless to say invested in other ventures.Apart from the conglomerates having control of various activities in the industry referred to in my previous comments ,they have fertilizer and insurance and other Cos.. They have spread their vicious Tentacles around the Tea industry and holding it by its neck.
    I have in this and previous comments made it plain for all to see, that the wages of these destitute, wretched workers could be easily paid in excess of a Rs1000/= and with retrospective effect from Jan 2019.
    The pertinent question to be replied by the RPCs is if the plantations are running at a loss

  • 0
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    C/o…..Why are the RPCS not handing them back to the government, instead of clamoring for an extension of the lease to 99 years, which is virtual ownership of public property,
    As a matter of interest I shall be obliged if you Remy would obtain the selling price per kg for this Aussie tea and Dilmah’s in Australia.

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