 "Kerala's plantations face a perfect storm")
The strike by Kerala's tea and rubber plantation workers, which threatened to snap the backbone of the state's farm economy, has been called off. The decision was taken in the wake of a wage settlement arrived at on Wednesday following a meeting of plantation managements, trade unions and the government.
The labour trouble, which started over a month ago when 3,000-4,000 workers at Kannan Devan Hills Plantations (KDHPL) in Munnar stuck work, had since spread across the state's government and private tea and rubber estates. Nearly 300,000 plantation workers had gone on strike. With it, work at the state's tea and rubber plantations, which contribute nearly Rs 21,000 crore to its exchequer annually, had come to a grinding halt.
The workers want their wages to be increased from Rs 232 to Rs 500 a day and the annual bonus to be 20 per cent of their wages instead of the existing 10 per cent. Their contention is that coconut climbers get paid Rs 1,200-1,250 a day and even casual labourers earn more at Rs 700.
The unions and managements have agreed to increase the wages to Rs 301 for tea and coffee plantation workers, Rs 330 for workers at cardamom plantations and Rs 381 for those working at rubber plantations. With benefits added, the total emoluments work out to Rs 436, Rs 478 and Rs 552, respectively.
KDHPL says the unrest cost it Rs 27.80 crore due to loss of production and another Rs 5 crore has gone into paying the workers the extra 10 per cent bonus - a demand which was agreed to in order to diffuse the situation. These disruptions, says KDHPL, "will adversely affect the performance of the company in the present season and beyond".
The troubles, however, might not yet be over for KDHPL. Pembilai Orumai, the new-found women's collective that initiated the strike at KDHPL, has said it will withdraw the agitation only temporarily. It says it might resume the strike after the forthcoming panchayat elections or after the next round of the Plantation Labour Committee's meeting where the workers' wages will be decided. The women's body will contest from 30 wards in the panchayat elections due in the first half of November.
A bagful of troubles
Plantation workers might breathe easy for now but they realise that labour trouble isn't the only issue ailing the sector. Fall in prices of tea and rubber, land issues and climatic changes have hit production and have left the sector bleeding.
Three years ago, Kerala tea cost Rs 107 a kg. Now it is priced at Rs 84 per kg. Rubber prices too have dropped, from over Rs 200 to Rs 110 per kg. With losses mounting, plantations are struggling to survive, says C Vinayaraghavan, chairman, Association of Planters of Kerala (APK), which represents 90 per cent of the plantation owners in the state. Already about 30 per cent of small owners have exited the business. According to him, 80 per cent of the domestic market is dominated by Assam tea that is priced at nearly Rs 140. The tea produced by Tamil Nadu is also priced higher at Rs 100. Kerala tea loses out in this respect.
Several factors are affecting the future of the rubber sector, says A Jayathilak, chairman of the Rubber Board. Rubber cultivation is shifting to low-cost countries and to non-traditional regions within major rubber-producing countries. Climate change, technological advancements and the growing acceptance of synthetic rubber as opposed to natural rubber are all taking a toll on production. He is, however, optimistic that things will start looking up. History shows that growth of the rubber industry has always been cyclical and a recovery is imminent, he says.
As of now, the ageing plantations with low-yielding trees do not hold the promise of a turnaround. Rising imports of natural rubber have further affected the domestic industry. Last year, India imported a record 415,000 tonnes of rubber, mainly from Thailand, Malaysia, Indonesia and Vietnam. Domestic production, meanwhile, dipped to a 12-year low of 655,000 tonnes. Analysts expect imports to continue rising. This year, they are likely to grow 18 per cent, touching a record high of half a million tonnes. Besides, at prices as low as Rs 90 a kg, imported block rubber costs much less than rubber produced in India.
According to the Rubber Board, domestic production tumbled by 14 per cent to 143,000 tonnes in the first quarter of the current fiscal. In June, the fall was 21 per cent, compared to a year ago. Industry sources say that this is the third consecutive year that the production of natural rubber has fallen in India, which is its second largest consumer. Last year, it fell 16 per cent and in this year 15 per cent.
Vinayaraghavan rues that despite its significant contribution to the exchequer, the plantation sector is not getting the kind of attention that sectors like information technology enjoy.
To cultivate one acre of land, the owner has to invest around Rs 12 lakh, he says. While many countries offer 30-35 per cent of subsidy for cultivation, in India it is less than Rs 2 lakh (around 17 per cent).
"We might have to form a consortium to survive," he says. "The government said it will sell the produce through its fair price shops. The state will need to chip in to support the sector." Vinayaraghavan adds that the state government should also allow for the shift from one plantation crop to another, which is currently difficult due to the land laws prevailing in the state. More than tea and rubber, the soil and climatic conditions in Kerala are well suited for crops like cocoa and pepper, the "black gold", he says.
Out-of-the-box thinking is what the sector needs.
