Tamil Nadu government’s proposal to revise the minimum wages for employees in the plantation sector has triggered concerns in the State’s tea sector. The government has issued a draft notification dated July 30, proposing revision of minimum wages for employment in plantations growing tea, coffee, rubber and cinchona in the State.

As per the latest proposals, there would be a wage increase of ₹87 per day for workers in tea estates, which is the predominant plantation crop in Tamil Nadu. The affected parties are required to submit their objections or suggestions to the proposals within a period of two months from the date of gazette notification. Thereupon, the government shall issue the final notification by either modifying or confirming the proposals. The previous such revision was in 2017.

Low prices

“What is worrying for the employers is that the steep increase in their wage liability has come about in the context of falling tea prices at the public auction centres. Growers of coffee and rubber in the State belong primarily to the small holder category, who would find it to be an uphill task to shoulder the burden of an identical sudden wage hike. The wage and wage-related expenditure in the cost of production in plantations is in excess of 60 per cent,” said Arun Kumar, Chairman, The Planters’ Association of Tamil Nadu, in a statement.

“Of particular concern to employers is that, out of the total wage of ₹425 per day, the methodology adopted by the government in the notification for arriving at the variable dearness allowance component is egregious. This has led to a 27 per cent increase in dearness allowance (DA), as against only a 9 per cent increase in the 2017 notification. This would result in an adverse effect every quarter to quarter, when the DA would have to be revised, during the course of the validity of the final notification,” Arun Kumar said.

Further, even without such a revision, the existing wage rates in Tamil Nadu are far higher than the North-Eastern States, which are the dominant producers of tea in the country in terms of volume, Arun Kumar said.

The employers in the plantation industry in Tamil Nadu are in the process of finalising their objections to the statutory draft notification. “We hope to convince and prevail upon the State government on the need for moderation in minimum wage fixation in Tamil Nadu to ensure protection of employment and the continued survival of the industry,” he added.

Tea production in Tamil Nadu stood at 153.83 million kg (mkg) in 2020, accounting for around 12.2 per cent of India’s tea output of 1,257.53 mkg.

Long-term policy needed

N Lakshmanan Chettiar, Director, Golden Hills Estate Pvt Ltd, Coonoor, said the proposed wage hike will upset the economics of the industry. “The government has done the unilateral decision of hiking the wages and at the same time they don’t have a mechanism to boost up the auction levels,” Lakshmanan said, adding that the industry should look at a long-term solution.

“We should not be dependent on this migrant labour forever. We will have to be in tune with the current trends which is happening in the world scenario by automating the agri-operations, for which long term funding is necessary,” he added.

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