Wage Hike for Tea Pluckers and the Organic Fertiliser switch - A Symptom of Short Sighted Policies

(Lanka-e-News -11.June.2024, 11.20 PM) The recent decision to raise the minimum daily wage of tea pluckers in Sri Lanka from 700 LKR to 1,700 LKR has sparked a heated debate, reminiscent of the controversial organic fertiliser policy implemented by the former President Gotabaya Rajapakshe. Both decisions, while seemingly well-intentioned, risk undermining the very foundations of Sri Lanka's vital agricultural sectors through a lack of nuanced planning and consideration of long-term impacts.

The current ill considered, purely politically motivated wage increase could have unintended consequences that mirror the fallout from the hasty fertiliser ban and move to organic.

Undoubtedly, tea plantation workers have long deserved better compensation for their labor-intensive work. However the wage increase with no consultation with the plantation companies remain a blunt move, ignoring the productivity based pay scheme proposed repeatedly by the companies which would see workers earning even more than proposed.

The significant wage hike places a heavy financial burden on tea plantation companies, particularly smaller and medium-sized ones that already operate on thin or negative profit margins. Since labor costs form a major part of their expenses, these companies might struggle to remain viable, potentially leading to closures and job losses. The global tea market is fiercely competitive, with production costs heavily influencing prices. Sri Lanka already has the highest cost of production and lowest productivity amongst all tea growing countries.

Higher labor costs could render Sri Lankan tea less competitive, threatening its market share against countries with lower production costs. To cope with the increased wages, companies might resort to mechanization or reducing their workforce, which would undermine the intended benefits of the wage increase and could leave many workers unemployed.

The organic fertiliser ban serves as a cautionary tale. The abrupt transition to organic farming, intended to promote sustainability, instead led to widespread agricultural disruption. The lack of adequate planning, infrastructure, and support for farmers transitioning from chemical to organic methods resulted in significant crop failures and economic losses. The lesson from the fertiliser ban is clear: well-meaning policies, if implemented without thorough planning and stakeholder engagement, can backfire dramatically.

Policymakers must balance immediate welfare improvements with long-term industry sustainability all the while not compromising the same for petty political gains. Significant changes should be phased in gradually, allowing time for adaptation and mitigating adverse impacts. For the wage increase, incremental raises coupled with productivity improvements, that have already demonstrated benefits for workers in trials, would be a sustainable model rather than the current destructive simple wage increase without increased productivity, already the lowest amongst all tea producers.

Engaging with all stakeholders, including plantation companies, workers, exporters and market analysts, is crucial to creating policies that address diverse perspectives and practical realities. Policies should include support mechanisms such as subsidies, training programs, and infrastructure development to help industries transition smoothly without jeopardizing their viability.

Sri Lanka's agricultural policies must strike a delicate balance between improving livelihoods and maintaining economic stability. The wage increase for tea pluckers, if not managed carefully, risks repeating the mistakes of the organic fertiliser ban – well-meaning but ultimately harmful. Sustainable development requires not just ambitious goals but also pragmatic, well-thought-out strategies that safeguard both workers' rights and industry health.

While for some, the intention behind raising the tea pluckers' wages is noble, it is imperative that the implementation is handled with care to avoid a crisis in the making. Policymakers must ensure that their decisions foster both the welfare of workers and the sustainability of the tea industry, preserving Sri Lanka’s legacy as a premier tea producer. For if not, this may very well be the end of Ceylon Tea as we know it.

Written by an Industry expert who wishes to remain anonymous

by     (2024-06-11 19:22:32)

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