| adding some cheer
Calcutta, Aug. 7: The Assam government has directed the tea industry to pay wages to plantation workers on their rest day at a time when the industry is passing through a financial crisis and the prices of new season tea has dropped by Rs 4-5 per kg at the auctions.
There are eight lakh workers in the Assam tea plantations and this hike will directly increase the cost of production by 10 per cent. About 60 per cent of the cost comprises employee cost. Assam produces 400 million kgs of tea.
The tea industry in Assam, has been paying workers according to the 1952 recommendations of the Chetia committee.
Under the deal, workers get wages for six days, which takes care of the seventh.
This recommendation also features in the preamble of the current wage agreement of the plantation workers.
Recently, the labour department of the Assam government had written to various regional labour offices calling for payment of wages for the rest day. This would translate into a hike of about 17 per cent in wages than was negotiated through the traditional process of collective bargaining, said Suresh Bansal, president of the Tea Association of India (TAI).
Bansal said the matter has been referred to Assam chief minister Tarun Gogoi and he has assured the industry that he would look into it.
High cost of production and low productivity is eating into the margins of the tea industry. Adding to the industry’s woos is the low price of tea at the auctions and falling export demand.
The average price of tea has come down to Rs 63.46 per kg from Rs 68.52 per kg in the previous year — a drop of almost Rs 5 per kg.
“To increase productivity, we are talking to the workers at the gardens directly. It is a tough task but we think the workers also realise the condition of the industry. This is the fourth consecutive year that the industry is passing through a crisis,” he added.
The loss of export markets is also a major concern. Following the war in Iraq, exports to the country is almost nil. Last year, the industry had exported about 43 million kgs to Iraq.
Exports to Russia and CIS countries has gone down drastically to 61 million kgs from 95 million kgs in previous years.
The industry is hoping that India will export at least 10 million kgs of tea to Pakistan. “A delegation of merchant exporters will be going to Pakistan in the third week of this month,” said Bansal.
Another important area is the financial restructuring of the tea industry. The relief package extended by the bankers to the industry under Madhukar Committee recommendations have not been uniformly implemented by all the banks.