Plantation sector in dire straits

By P. Venugopal

THIRUVANANTHAPURAM, DEC. 7. The spectre of labour unrest looms over the plantation sector across South India, with the planters finding it difficult to even pay the weekly wages of workers due to falling commodity prices.

Nearly 10 lakh workers in the plantations of Kerala, Tamil Nadu and Karnataka are going on a day's strike on December 11 to highlight how they have become the victims of the new international trade regime. All trade unions in the sector - CITU, INTUC, AITUC, HMS, UTUC and those affiliated to DMK and AIADMK - are associating with the strike.

``The outlook is extremely bleak. The very survival of the plantation sector is doubtful if the Government does not wake up,'' says the chairman of the Association of Planters of Kerala (APK), Mr. G. J. Ancheril.

According to him, several plantations are on the verge of closure since the prices of tea, coffee, rubber and spices have been ruling well below the costs of production for nearly two years now. ``Many planters are finding it increasingly impossible to pay even the statutory wages to their workers, leave alone remitting the Provident Fund and other contributions,'' he said.

Every kg. of tea, coffee or rubber produced by the plantations today is sold at a loss, according to the planters. The average price of tea at the Kochi auction so far this year comes to Rs. 51.47 per kg. against Rs. 62.41 per kg. during the corresponding period last year. The cost of production of tea varies between Rs. 55 and Rs. 65 per kg.

The average price of Robusta coffee grown in Kerala has been as low as Rs. 38 per kg. for five months at a stretch, compared to an average price of Rs. 60 per kg. for the whole of 1999.

For natural rubber, the average price of RSS 4 grade has been Rs. 31.48 per kg. against the benchmark price of Rs. 34.05 per kg. notified by the Government way back in September, 1998.

The industry estimates that 60 per cent of the cost of production in plantations is attributable to wages alone. According to Mr. Ancheril, ``wage cuts and deferments in wages or dearness allowance are measures taken by the planters as a last resort to keep the plantations open and the workers employed. Already, plantations have resorted to large-scale cost cutting on various essential areas such as fertilizer use, pesticide spraying and even on soil development, land upgradation and replanting''.

The planters attribute the low prices of their commodities mainly to the imports for domestic consumption under the terms of WTO and other trade agreements the country had entered into in recent times.

In the case of natural rubber, the recession in Indian economy has resulted in lower domestic consumption in these past two years. ``Allowing import of plantation products, especially at minimum duty as is the case of tea from Sri Lanka, at a time when the domestic production is in surplus, drives down the price realisation for our products drastically. Propping up other countries' plantation industries at the cost of our own can in no way be justified,'' Mr. Ancheril says.

APK will be joining a South Indian delegation of planters to New Delhi next week to request the Union Government to raise the import duties on plantation crops, especially in the context of the imminent opening up of imports after the removal of the quantitative restrictions (on imports) with effect from April 1, 2001 under the WTO pact.

According to Mr. Ancheril, another factor affecting South India's plantation crops is the import of commodities from countries such as Vietnam and Indonesia for re-export as Indian products. This reduces the demand for Indian commodities among exporters and is also bringing down the brand equity for Indian plantation products abroad due to low quality, he says.

The planters' delegation propose to submit the following proposals to the Union Government to save the sector:

a) Ban duty-free imports of plantation crops for at least one year.

b) Let export promotion zones procure products from domestic markets (all grades used for export are available here).

c) Make these exporters eligible for benefits given to advance licence holders procuring latex from the State Trading Corporation.

d) Increase Customs Duty of natural rubber from 25 per cent to 50 per cent through provisional safeguard measures.

e) Increase Customs Duty of tea and coffee to bound rates as per WTO norms.

f) Initiate export promotion campaigns for all plantation crops.

g) Include natural rubber in the list of items exported to Russia under the debt repayment scheme.

f) Propagate rubberisation of bituminous roads in all the States.

``The plantations are located in remote or backward areas like Idukki in Kerala, Nilgiris in Tamil Nadu and Coorg in Karnataka, where there are no other avenues of employment. The survival of a very large workforce depends on the survival of the plantation industry. It will be a big calamity if the Government does not wake up immediately,'' Mr. Ancheril says.

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