Meeting to review social costs of tea estates

Meeting to review social costs of tea estates

Kochi: Social cost, the second largest tea production expense after labour, has motivated tea estate owners to demand that the government bear some of the burden. Paying heed to the concern, an inter-ministerial committee (IMC), formed by the labour ministry in 2003, had recommended several measures, which have not seen the light of day till date.

After persistent demands from several tea growers, the commerce ministry has convened a meeting of the Tea Board, labour ministry, tea estate owners, state government officials, and trade union leaders at Coonoor in the Nilgiris on Saturday to look into the problem areas and consider changes to the Plantations Act.

The falling price of tea during the early part of the decade and growing social costs that solely are being borne by the tea estate owners put them in a financial bind.

The estates are forced to bear an increasing wage bill, a low yield, and also a low price of around Rs50 a kg.

It was in response to this crisis that the labour ministry formed an IMC to look into the matter. The IMC, in its 2003 report, estimated the social costs, which include medical benefits for tea estate workers, housing, and welfare activities such as schooling, to be around Rs7 per kg of tea produced.

The IMC had then suggested that the Union and state governments intervene and share some of the social costs. According to the proposal, the Union government would bear 40% of the costs, state governments would fund 10% of the expenses, and the rest would be borne by the tea estate owners.

Arjith Raha, additional secretary of the trade body, Indian Tea Association, says the proposal is yet to be implemented.

The total area under tea cultivation currently is around 5.2 lakh hectares and production is around 950 million kg. While Assam accounts for nearly 50% of India’s tea production, West Bengal and the South, comprising Tamil Nadu, Kerala and Karnataka account for 25% each in output.

J.K. Thomas, president of the grower’s body, United Planters Association of South India, says that unlike in the tea estates in Bengal and Assam, the cost of production in the South is high and the output per worker is low. The cost of production is the highest in Kerala at Rs90.50 per kg, followed by Rs78 in Tamil Nadu, and Rs72 in Karnataka. Wages constituted around 65% of this cost, while in the North, where the cost of production is around Rs70 per kg, wages are in the Rs50-55 range.

David King, chairman of the Association of Planters of Kerala, says tea-growing areas now are thickly populated and estates are forced to pay taxes even to the lowest panchayat level.

Schools and hospitals in the tea-growing areas benefit everyone, not just the tea estate workers, he adds.