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The government’s decision to pay an additional Rs 200 per day to plantation workers raises a number of issues regarding the tea plantations. The issue is not whether the daily wage of plantation workers should be increased or not, but whether the government, rather than the plantation companies, should bear the cost. That, in a nutshell, is the issue.

Controversy

The controversy on the increase in wages of plantation workers by Rs 200 per day is not about the need to increase the wages, about which there is a consensus, but about whether it is the government that should pay the increased wage or the plantation companies that manage and run the estates. In other words, the issue is not whether to give or not to give the wage increase but who should give it.

Consensus

In as much as there is a consensus that the daily wage of estate workers is inadequate, is it not the privately managed plantation companies of state-owned estates that should pay a living wage?

Plantation companies

On the other hand, the plantation companies contend that they are unable to pay the wage increase, as they claim they are running at a loss. However, it has been pointed out that plantation companies pay dividends and bonuses to shareholders.

Budgetary approval

Parliament approved the budget for 2026 with 160 votes in favour, 42 against and 8 abstentions. Significantly, two members of the main opposition, Samagi Jana Balawegaya (SJB)—Mano Ganesan and V. Radhakrishnan—and Opposition member P. Thigambaram supported the budget, as they were in favour of the salary increase.

Financial Burden

The government is now burdened with the salary payment to plantation workers. In addition to the large number of loss-making state-owned enterprises, we will now have state-owned and privately managed loss-making enterprises (SOPMLMEs).

IMF conditions

This raises several issues, including the concern that it may go against the IMF conditions, which promote the privatisation of state-owned enterprises as a move to reduce the government’s fiscal burden. How could the financing of state-owned, privately managed enterprises by the government coffers be permitted by the IMF? Presumably this has been sorted out with the IMF.

Consensus

There is no disagreement among members of parliament that the current plantation wage is inadequate. The disagreement is whether the government should bear the cost of the increase.

Plantation companies’ contention

Plantation companies contend that they are unable to bear an increase in wages. Even though this is borne out by the cost of production (COP) of tea, others contend that the plantation companies are making profits. This is an issue that must be clarified by the Auditor General.

Smallholders

Another issue that has arisen is the demand by workers on small holdings for an increase in their daily wage too. How will the government contend with such a demand?. A demand for a wage supplement would be politically difficult to deny workers on small tea holdings that produce about 80 per cent of the country’s tea.

There are significant differences in tea productivity on estates and small holdings. The productivity on small holdings is much higher than on plantations due to several agronomic conditions.

Senile tea bushes

A large extent of plantations have senile tea bushes: some over a hundred years old. Then most estates have vacancies that reduce plant density. The lower plant density means fewer tea leaves. Significantly, low-country tea lands get more sunlight; that is a factor in green leaf production. These are among the factors accounting for the higher productivity on small holdings.

Implications

The implications of these are that the tea plantations require large-scale replanting with vegetatively propagated (VPP) higher-yielding tea, the infilling of vacancies and constant weeding. The acute labour shortages on plantations make the resuscitation of the plantations exceedingly difficult.

Investment

The long-term character of this investment and the government financial bind have deterred this investment.

Conclusion

This discussion on the wages of plantation workers leads to the inevitable conclusion that a well-funded plan to develop the tea plantations is imperative. The implementation of such a plan requires considerable finances, scientific and technical expertise and labour, which is a severe constraint. The development of a tea development plan should not be difficult, but its implementation would be a formidable task.