Storm in tea gardens

Print edition : August 12, 2005

The latest strike by plantation workers in northern Bengal demanding wage hike comes as another blow to the crisis-ridden tea industry in the region.

Women workers at a tea garden in northern Bengal.-PARTH SANYAL

THE Indian tea industry, which has been in recession for the past seven years, was faced with a new crisis when over 3.5 lakh workers in the 350-odd tea gardens in north Bengal went on an indefinite strike from July 11 following the failure of negotiations over their demand for higher wages. Wage hike was the central point of discord in their eight-point charter of demands for which they have been agitating for over two years. The stalemate over wages came to an end on July 25, when the parties concerned arrived at a settlement. The strike was called by the Coordination Committee for Plantation Workers (CCPW) and the Defence Committee for Plantation Workers' Rights (DCPWR) - the bodies that represent all tea workers' unions in north Bengal.

The terms of the last wage agreement signed in March 1999, expired in 2003. The workers demand a basic minimum wage of Rs.88 a day to be fixed for a period of two years. The demands were unacceptable to the Coordination Committee of Planters' Association (CCPA), which was initially willing to offer a wage hike of just Re.1. Later, the planters offered a hike of Rs.6 over a period of three years (Rs.2 annually), which was turned down by the unions. Later the planters offered a hike of Rs.8 over a period of three years (Rs.2.50 each in the first two years and Rs.3 in the third year), which was accepted by the union representatives.

According to the data available with the Tea Association of India, the daily cash wage of the tea workers of the Terai and Doars regions is Rs.47.40. But if fringe benefits like subsidised foodgrain and fuel, and facilities such as housing, health care, education, provident fund, bonus and gratuity are taken into account, the total daily wage cost in the Doars and the Terai come to Rs.93.40 and Rs.93.28. "We are in fact paying them more than they demand," a management representative of a reputed tea garden told Frontline. But this logic is obviously fallacious. These benefits were assured to the workers by the Plantation Labour Act, 1951. And, inspite of them, the purchasing power and standard of living of the workers remain abysmally low. To add to their misery, a recent Central order threatens to stop the supply of subsidised rice and wheat as it is not found to be legitimate according to guidelines for the targeted public distribution system (TPDS).

The planters, however, have accused the workers of being responsible partially for the crisis. According to a status paper brought out in October last by the ITA, apart from the fact that India remains the highest cost producer of tea in the world, declining productivity, rising input costs, low level of labour output, uneconomic age profile of tea bushes have contributed most to the decline of the industry. "The only way of ensuring long-term survival of the tea industry is to reduce cost of production and benchmark it against Kenya, Sri Lanka and even Bought Leaf Factories. At current yield levels, there is no hope of bringing cost of production down coupled with the low labour productivity and the burden of social costs." The workers do not accept the planters' stand that wages be linked to productivity.

The strike has added to the woes for the ailing tea industry. Of the total 830 million kg of tea produced every year in the country, north Bengal accounts for around 200 million kg. According to industry sources, if the strike had taken place in winter, the loss would have been far less as bulk of the production happens during monsoon. The quantum of loss the industry is suffering because of the strike is staggering - around Rs.6.5 crores a day and, production wise, around 1 million kg a day. Even if the strike is called off, it would take three more weeks to resume plucking. The economy of the region is also severely affected, as it is completely dependent on tea.

The West Bengal government led by the Communist Party of India (Marxist) has been trying to solve the problem through bipartite and tripartite meetings. In his statement to the State Assembly, Labour Minister Mohamed Amin, the government representative in the talks, said: "When the tea gardens were making profits, then no part of that was shared by the owners with the labourers. Now they are saying that the tea gardens are no more profitable; but why should the workers suffer for that? The workers have some legitimate demands and the management will have to accept them."

Chief Minister Buddhadeb Bhattacharjee and Industries Minister Nirupam Sen have also held several rounds of talks with the unions and the managements.

Many organisations and trade unions, including the Centre of Indian Trade Unions (CITU), the Indian National Trade Union Congress (INTUC) have come out in support of the tea workers.

On July 19, a 12-hour bandh was declared by the tea unions in the four tea-growing districts of north Bengal - Jalpaiguri, Darjeeling, Coochbehar, and North Dinajpur. Numerous rallies were held in the region and in which labour unions from other industries participated. This is the second time in six years that the tea workers of north Bengal went on strike. In 1999, they went on strike for 10 days, and the planters had to relent.

AS of July 23, the strike in the north Bengal tea gardens had been on for 13 consecutive days - the longest in a decade. But the settlement of the present dispute would not mean an end to the problems of the industry. According to experts, certain decisions taken earlier by the industry have not had the desired effect. Since the 1980s, the Indian tea industry started focussing more on CTC (crush-turn-curl variety of tea) rather than orthodox tea. Bulk production was the order of the day. As a result of this, there sprouted small growers and bought leaf factories. But with the erstwhile Soviet Union, the largest importer of Indian tea, providing a safety net for the industry, there was nothing to worry about. And it was late when the tea industry realised the need to change its product range from bulk tea to quality tea to cater to the export demands.

Kalyan Basu, secretary-general TAI, told Frontline: "The problem the industry is facing is competition both within and outside the country. In export, countries like Vietnam and Indonesia have a major cost advantage over us; and within the country bought leaf factories manufacture tea at a much lower price, and they account for around 20 per cent of the total produce in the country." With the dismantling of the Soviet Union and India's loss of its export market to competitors like Kenya, Sri Lanka and Indonesia, the industry had to pin its hopes on the domestic market, which so far, has failed to cover the total production. It is important to note that there is no definitive record of the total domestic consumption or the regionwise pattern of tea consumption. The Tea Board attempt to promote tea through advertisement campaigns but it failed owing to the lack of adequate financial support from the industry.

It is no longer possible to bank on any particular country or countries to address the problem of excess production. Iraq is a case in point. In 2002, it was the second largest importer of Indian tea after Russia. The 44 million kg it imported then dropped to 12 million kg. The drop had a telling effect on the low quality orthodox producers.

A recent study has revealed how costly the production of tea in India is, compared to other tea exporting countries. India's share of exports today stands at barely 25 per cent of the total production against the 60 per cent about 30-40 years ago. Its share in the global market has declined from 36 per cent in 1960 to merely 13 per cent in 2003.

Though the demands of the workers are completely justified, it is not fair to place the blame squarely on the planters in the organised sector. The social cost they have to bear under the Plantation Labour Act puts them at a disadvantage vis-a-vis the bought leaf segment. Most of these companies do not have a corporate structure, and in times of crisis, banks are reluctant to come forward to help. Repayment of the money that comes through private financing is a very costly affair. The L.V. Saptarishi Committee suggested a few years ago that 40 per cent of the social costs be borne by the Centre and 10 per cent by the State government. The committee's recommendations are yet to be implemented. To address this problem, the Ministry of Commerce has set up a sub-group under the chairman of the Tea Board to work out the modalities of setting up a Special Purpose Fund for extending financial support to the industry.

Productivity itself has been dwindling for a while now, as most of the tea bushes are very old with little yield. In his Budget speech this year, Union Finance Minister P. Chidambaram said: "In the case of tea, our comparative advantage has been eroded largely because of the declining productivity of tea. The government will examine ways and means of introducing a programme for massive replantation and rejuvenation."

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