Traditional exports up with Government’s backup:

On a sound footing

Dr. Mathu H. Liyanage

It’s encouraging news that our traditional exports - tea, rubber and coconut - are on the mend due to the vigorous boost given by the Government.

Tea

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 industries.

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.

Rubber

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.

Coconut

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.