Plantations in deep waters

By V.Jayanth

CHENNAI, NOV. 2 Just as recession in the textile industry refuses to go away, the plantation sector is unable to extricate itself from one of the most devastating, persistent crises it has faced in recent years.

The Planters Association of Tamil Nadu meets for its annual conference in Coimbatore on Saturday, to review the situation and impress on the State Government the urgent need for supplying some oxygen to a `dying' sector.

Association sources say, ``the problems of the industry are too well known. Our demands have been with the Central and State Governments for over two years. Unfortunately, both of them have failed to respond positively to revive the plantation sector. We will continue to press our case.''

The planters say the delay in providing succour has only worsened the situation. Had the Centre and three southern States hammered out a package to resolve the crisis, things could have been better by now.

Some of the problems no doubt are of their own making - mismanagement, wrong policies, lack of planning and preparedness for the WTO regime and, in many estates, absence of financial discipline. But there are issues which the Government could have resolved - for instance, the falling prices of tea, coffee and rubber; the ill-timed imports when there is a major glut in the domestic market and the high rates of taxation as well as a new cess.

There have been external factors too. In the era of globalisation, the export markets have begun to shrink, for Indian plantation produce. The producers have been excessively dependent on exports to Russia and West Asia, with the full backing of the Centre through bilateral and multilateral pacts. Now, all these have disappeared and the south Indian tea has been forced to compete with the products from Sri Lanka and Southeast Asia, for instance. It has not been able to withstand the competition because the cost of production here remains prohibitive, while the auction prices have slumped.

Association sources explain that tea prices fell from Rs. 68.80 per kg in 1998 to Rs. 47.42 this year. Arabica coffee slumped from Rs. 98.10 to Rs. 47.06 and Robusta from Rs. 73.03 to Rs. 30.24 in the same period. Rubber prices crashed from Rs. 50.50 to Rs. 29.35 a kg. But the cost of production now was Rs. 65 for tea; Rs. 66.75 for coffee and Rs. 45 for rubber.

The plantations in Tamil Nadu are said to have suffered a loss of over Rs. 1,000 crores following the crash in prices and are now considered ``unbankable'', because of the risk involved. Tomorrow's meeting could provide a forum for the planters to come up with a real warning to the State that if it does not step in at least now, many of the estates may face closure sooner than later.

Another major problem confronting the estates is the rising cost of labour. Thanks to the vociferous unions and the wage settlements, the pay package has risen, pushing up production costs even as auction prices continue to fall. The association was upset at the approach of the DMK Government on the labour issue and hopes that the present regime would adopt a more ``rational attitude'' in the long-term interest of the industry.

Though the Government did step in to procure Nilgiris tea from small producers, in a limited way, the planters want the administration to take a more pro-active role in resolving the crisis and putting the sector back on rails. Given the sensitive nature of the estates and the resident labour population, nobody wants to take chances when the future appears so gloomy. Planters are wondering whether the State and the Central governments will do anything to pull the sector out of the protracted crisis.

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