The entire tea industry in Kerala will collapse if it is forced to pay a daily wage of ₹500 each to the tea-leaf pickers, as being currently demanded by the agitating workers in some of the tea companies, said C Vinayaraghavan, Chairman, Association of Planters Kerala.

“After March next, virtually no tea estate or factory will be able to function if the ₹500 demand is ceded,” Vinayaraghavan, who is also the President of the Harrisons Malayalam Limited, one of the largest producers of tea in South India, told BusinessLine .

Following a nine-day strike by thousands of women tea-leaf pickers, Munnar’s Kanan Devan Hills Plantations Limited had last week agreed to pay ₹20 per cent bonus. Their demand for ₹500 as wage will come up for negotiations on September 26. In the wake of the ‘Munnar-model’ strike, women workers at many tea gardens have taken to the roads. Hundreds of women workers at Harrisons Malayalam’s three estates have been on strike for the fourth consecutive day. Vinayaraghavan pointed out that currently the workers were being paid a basic wage of ₹232; but the total monetary benefits (including provident fund contributions, etc) a day was ₹325. If the demand for ₹500 was ceded, the total daily monetary benefits would be ₹720.

Low productivity, low price Giving out productivity figures, he noted that each worker picked 21 kg of leaves which would give out 4.83 kg of ‘made tea.’ The current price of tea at Kochi auction was ₹87 a kg. “Given this market reality, how can a tea company pay more as the price realisation is much lower than that of even the tea picked by the worker?” he wondered. “Even to break-even, we will need to get a price of ₹178 a kg.”

He also noted that the Central Government’s Tea Control Order mandated that 70 per cent of the tea produced by a company be sold at auction, and only 30 per cent could be sold in the market.

Vinayaragahavan also said that the tea companies were forced to pay the social costs of providing housing, water, sanitation, power and healthcare of the workers. This was unique to the tea industry while the government bore such social costs in other industries.

He claimed that the industry, saddled with high cost and low price, was passing through a crisis and that the government and the workers needed to understand this predicament for the survival of the industry.

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