High labour costs hit plantation sector

Though the Indian plantation sector has managed to survive the economic downturn, the ever-escalating cost of production is worrying the industry. Plantation labour wages in India are the highest in comparison with the competing countries. In addition to that, the burden of social costs have made Indian plantation commodities costly. Hence, India is losing out in the export markets.

Expressing concern over the various issues affecting the plantation sector, D P Maheshwari, president, United Planters’ Association of Southern India (UPASI), said price levels of all plantation commodities during the year were at comfort levels. Though the market fundamentals are suggesting a continuance of better prices for some more time, uncertainties prevail, Maheshwari said, speaking to reporters on the eve of the 116th annual conference of Upasi, which kicked off today at Coonoor.

The two-day conference will deliberate on various issues, including the impact of global recession, lower exports and labour shortages in coffee and rubber plantations.

Plantations, including tea, coffee, natural rubber and cardamom are crucial to the Indian economy. Predominantly, rubber and spices are grown in Kerala, tea in Tamil Nadu and coffee in Karnataka. The plantation industry in South India produced Rs 12,192 crore worth Of products last fiscal and earned nearly Rs 3,605 crore as the net foreign exchange. The sector provides direct employment to about 1 million workers, and indirect employment to an equal number.

Labour shortage is acutely being felt by the industry as the younger generation is no longer interested in traditional pursuits and are shifting from the countryside to towns and cities seeking better-paying jobs. When the input costs are sky rocketing and is beyond the control of producers, the only alternative is to increase land productivity, according to planters.

Various commodity boards are undertaking ambitious projects to encourage replantation by offering subsidies. Except for tea, corporates are kept out of the ambit of the scheme. The corporate sector plays a vital role in the plantation sector which employs a large number of workers.

The costs are high on account of the higher wages they pay and the associated social cost element, including housing and healthcare for workers.

“It is absolutely important that the government of India extend all assistance and incentives to growers irrespective of the size of holding,” Maheshwari added.