United Planters Association of Southern India (UPASI) today urged the Government of Kerala to urgently take note of the grave situation in the plantation sector that has arisen after fixing increased wages and to deliberate with the industry the ways and means of neutralising the huge additional financial burden that has to be borne by the plantation industry.

In a statement, UPASI President N. Dharmaraj said that the new wage for plantation crops prescribed in Kerala had come at a time when the industry was already reeling under the burden of low prices and high costs.

“This is very unfortunate for the plantations, which employed over a million people and will destroy the rural economy of plantation areas in the state,” he said.

The wages for tea had been fixed at the rate of Rs. 301 per day, while for rubber and cardamom, the wage would be Rs. 381 and Rs.335 respectively. In tea and coffee sector, the wage increase along with statutory benefits would result in an increase to Rs. 436 per day, while in rubber the total daily wage including statutory benefits was Rs. 552 per day.

The plantations in South India were not against paying higher wages, but the current economic realities coupled with the plethora of taxes and levies, did not make it a viable proposition, he said adding that the wages that was being forced upon, without considering the capacity of the industry to pay, would lead to the collapse of this sector.

Kerala, which is considered to be a plantation enclave growing all plantation crops, would soon lose its relevance, as the growing of plantations has turned uneconomic.

At the present wage rate, the industry would incur huge losses, besides drying up of
credit avenues and in the process there could be delay in wage payments and some estates/companies may even default and many plantations would be compelled to reduce the workforce to sustain themselves, he claimed.

All these would result in a permanent damage to this sector. Already seven estates and 14 factories were lying closed and in the wake of this new additional wage increase it was feared that more estates would close down leading to loss of employment and revenue.

Kerala, which currently produces around 67 million kg of tea, 68,000 tonnes of coffee, 5.65 lakh tonnes of natural rubber, with a contribution of around Rs.13,243 crores to the exchequer, would be affected on account of unreasonable wage increase and it was certain that the State’s role in plantation sector would be eroded due to the loss in production, export and employment, Dharmaraj said.