'Ceylon Tea' in crisis

by Lalin Fernandopulle

Sri Lanka's world famous tea industry is nearing crisis point in terms of profitability. The tea sector, a major contributor to the economy, has fallen from the frying pan to the fire with a gloomy global market scenario that has resulted in the exports dwindling drastically over the years.

In addition to the recent wage hike demand by trade unions, the plantation industry has been plunged into further difficulty with the ban on chemical weedicides for plantations, and the plummeting international market prices.

Planters' Association of Sri Lanka Chairman Roshan Rajadurai said, Regional Plantation Companies (RPC) are in a precarious state, unable to pay even the daily wages of workers, which currently is Rs. 620. We cannot meet the demand for an increase up to Rs. 1,000 a day with the situation worsening, with production and global tea prices dropping sharply.

"Despite the drop in price of tea by around Rs. 66-67, and rubber prices from Rs. 530 to 350, since 2014 we agreed to pay Rs. 100 in addition to the daily wage, for two months, which has made RPCs incur a further loss. The trade unions should understand the reality and make reasonable claims", Rajadurai said.

Productivity based

RPCs complied with the request of the Prime Minister to pay an interim allowance of Rs. 100 a day for at least two months, to the workers. We paid the interim allowance in June and July, having borrowed Rs. 1 billion from the government, with the hope of moving on to the productivity based model.

"We cannot go on like this for long. RPCs cannot be borrowing from the Treasury to pay its workers. If there is no solution the plantation sector will drift aimlessly without any progress", Rajadurai said.

He said, the plantation industry will come to a gr inding halt if trade unions persist with their demand for a wage hike based on the old model, which is not appropriate at a time when the industry is in a deep crisis.

We have provided an equitable solution to the wage hike demand, which enables workers to live a decent life. Education, healthcare and other welfare facilities are provided along with the guaranteed 25 -day mandatory work payment.

When asked about a time line, Rajadurai said, it's all left to be seen. It is time the government, RPCs and trade unions come to a reasonable and sustainable agreement.

A spokesman for the Plantation Association, the umbrella organization for RPCs said, RPCs have invested around Rs. 55 billion since privatization, to improve factory infrastructure. All RPCs are listed companies, and privatization in the early 1990s has helped improve the output from the plantation sector and the services offered to workers.

"The attendance based model for wages has to change to a productivity based wage model that will help workers earn more and improve the quality of life. The trade unions are adamant. They want to stick to the age old attendance system introduced by the British", Rajadurai said.

Promotional campaigns

Discussions between RPCs and trade unions to reach a viable solution for wages has been going on since March 2015.

"The policymakers should get trade unions to agree on the productivity based wage increase model that is viable and sustainable", he said. He said, the removal of the fertilizer subsidy for plantations and the ban on glyphosate have dealt a severe blow to the tea sector, which is currently in the doldrums. Application of glyphosate is permitted only two to three times a year. The ban on chemical weedicides is a disincentive to commercial scale cultivation.

When asked about a probable move by the government to nationalize the plantation sector, Rajadurai said, nationalization is not a solution to the many ills faced by the industry. It will not solve the wage problem, worker output nor improve global competitiveness. We should not kill the goose that lays the golden egg, he said.

With regard to the move by the Finance Ministry to acquire the tea fund to the consolidated fund, Rajadurai said, the funds of the tea sector should be used for promotional campaigns to boost exports and regain the market share.

RPCs earn around Rs.430 on a kilogram of tea, while the cost of production is Rs. 550 per kg. Plantation companies incurred a loss of around Rs. 3 billion in the past 6 months due to rising labour costs and the drop in world tea prices. With regard to the ban on glyphosate, Rajadurai said, the Association has called upon the government to permit the use of the weedicide on tea plantations which have not reported cases of the Chronic Kidney Disease (CKD)

He said, the absence of an effective weed killer is a major issue affecting production in the plantations. It has a dent on the quality and quantity of the harvest. We have lobbied to lift the ban, but to no avail.

Tea Research Institute (TRI) Director Dr. Sarath Abeysinghe said, glysophate was recommended by the TRI in 1980 as one of the cost effective weedicides popular in the tea sector.

The only alternative to glysophate, a broad spectrum weedicide, is Glufosinate Ammonia which is much costlier than glyphosate.

"There is no broad spectrum weedecide for tea plantations. As a result, there is no means to control the spread of weeds during the rainy season. This has made the job of tea pluckers difficult and time consuming.

Manual weeding

The lack of an effective weed controller has resulted in the drop in land productivity and tea production", Dr. Abeysinghe said. He said, the TRI has recommended an integrated weed management approach which permits the use of chemical weedecides and manual weeding.

Manual weeding is costly, a cost effective alternative to glyphosate should be introduced to enable the plantation sector to increase the quality and quantity of production.

President Maithripala Sirisena said some time ago, that glyphosate would be completely banned forthwith, over fears that it was causing the chronic kidney disease in the North Central Province.

The ban is applicable to vegetable and paddy cultivation during the Maha season, which starts in October.

Soil erosion

The high cost of production due to the increased demand for labour for manual weeding, worsening soil erosion and siltation of lakes and reservoirs downstream, have a major negative impact on tea plantations, PW Agro Farms (Pvt)Ltd Managing Director and Agricultural Researcher, Prasanna Weerasinghe said. Glyphosate was mainly used in the plantation sector -tea, rubber and coconut estates, as a weedicide, apart from controlling soil erosion, because it was cheaper compared to manual labour, which is becoming increasingly scarce in the hill country. Additionally, dead weeds act as a protective soil cover during the rainy season. Some paddy farmers applied glyphosate as a pre plant spray for 14 days every six months before ploughing paddy fields, as it hastened the decomposition of weeds.

However, glyphosate became popular only after banning the much cheaper herbicide, paraquat since 2010, Weerasinghe said. Prior to that, the price of glyphosate was beyond the reach of the poor paddy farmers.

Scientists who conduct research on renal diseases prevailing in many parts of the country have pointed out, that the use of pesticides, weedicides and chemical fertilizer is one of the contributory causes for the disease.

The limited information available in Sri Lanka does not show the harmful levels of glyphosate in drinking water in Chronic Kidney Disease of Uncertain Etiology (CKDUE) in the North Central Province,Weerasinghe said.

It has also, not been reported in tea growing areas where glyphosate is far more intensively used, he said. Therefore, scientific evidence is lacking to support the contention that glyphosate is the cause of CKDUE in the North Central Province.

The Department of Agriculture in 1977 permitted the use of glyphosate as a weedicide in non cropped lands in the hill country and it was extended to all of Sri Lanka in 1994. Its use in paddy fields was permitted only in 1998.

Although the President had decided to ban the import, and the use of glyphosate, the National Academy of Sciences of Sri Lanka has said recently in a statement, that it was not aware of any scientific evidence from studies in Sri Lanka or abroad that CKDUE is caused by glyphosate.