Traditional exports up with Government’s backup:
On a sound footing
It’s encouraging news that our traditional exports - tea, rubber and
coconut - are on the mend due to the vigorous boost given by the
Earnings from these three main exports have exceeded US$ 200 billion
besides providing jobs to more than 1.5 million over the recent years
according the Plantation Industries Minister D.M. Jayaratna’s speech
given at the Programs Evaluation Workshop of the Plantation Development
Project (PDP) at the Galle Face Hotel on October 30.
Not surprisingly, the rise in exports is the result of the broad
economic strategy outlined by President Mahinda Rajapaksa in his
election manifesto Mahinda Chintana, which emphasized the need to
advance the promotion of agriculture including paddy cultivation, tea,
rubber and coconut plantations and related agrarian industries, among
others, to reduce poverty in rural areas.
It is true that the agriculture sector has lost its importance in the
past few decades and now accounts for only 12 percent of GDP as compared
with industry’s 28 percent and service sector’s 60 percent.
The gradual rise of traditional export earnings is, therefore, a
testimony to the efficacy and efficiency of the economic program, the
President outlined, which the Government is now putting into practice.
While paddy cultivation, which employs around 879,000 farmer
families, is given pride of place to ensure food security the foreign
exchange earners in the agricultural sector are tea, rubber and coconut
Tea plantations in central highlands with a temperate climate
throughout the year, annual rainfall and the level of humidity are the
geographical factors, which favour the production of high quality tea,
fetching good prices in the world market.
Kandy and Uva areas are famous for mid-grown tea while low-grown tea
is located in the South - Galle and Matara, and in Ratnapura areas.
Though the tea industry is the major foreign exchange earner, which
employs the largest number of persons estimated at over one million,
poverty levels in tea estates have been persistently higher than the
average national level.
Recent trade union action demanding higher wages, which caused great
financial loss to the estate managerial sector, was halted by the timely
action of the Government by negotiating with the employers and the trade
union officials and arrived at an amicable settlement to increase the
workers’ daily wage from Rs 290 to Rs 405 - nearly a 40 percent wage
hike. The present situation in tea estates is essentially due to the
structure of the industry, which is highly labour-intensive. Any
increase in the wages of workers is bound to increase the cost of
production and reduce the profits of companies unless they take
appropriate action to absorb the cost by increased efficiency in other
factors of production.
In tea plantations mainly in the South, the impact of any wage
increase can be cushioned by the possibility of being able to buy leaf
from farmers of small tea-holdings in addition to processing of leaf
grown in their own estates.
The farmers of small holdings, who are responsible for and take up
commercial risks of growing tea, can get better rewards by selling their
leaf to factories over and above the wages of workers in the estates.
There is also competition among factories for purchase of leaf
resulting in higher prices, which in turn increase their income.
Besides, the farmers of smallholdings can grow coconut or other cash
crops on their plots to supplement their income from tea leaf and to
lessen the impact caused by the fall of tea prices in the market.
Estate workers are denied such allurements and lucrative options, and
they can only sell their labour to one buyer.
It is heartening to note that the plantation companies that run the
estates try to improve the living conditions of their workers by
providing better free housing and healthcare though the industry faces a
labour shortage now as the estate youth give up work on estates because
of low wages and poor recognition of their work. They do not invariably
want to follow in the footsteps of their parents.
The move by the Government to transfer the estate management to
skillful and trained private sector personnel is commendable as it might
improve the living conditions of the workers and be able to maintain a
persistent and uniform wage structure while improving the level of
production by the estates as a result of a more contented workforce and
a skillful management.
Plantation Industries Minister D.M. Jayaratna’s proposals to provide
each family with a seven-perch, change the designation of plantation
workers and provision of flat-type houses to replace the colonial
“labour lines” are indeed laudable and praiseworthy.
It is logical that these improvements and benefits would flow on to
the rubber and coconut estates to put the plantation sector on a better
and sound footing.
The writer is a freelance journalist and author.