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Politics and the Plantation Wage

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by Anura Gunasekera

President Ranil Wickremesinghe chose the Ceylon Workers’ Congress May Day platform, in Kotagala, to announce the increase of the plantation workers’ daily wage to Rs 1,700.00. An unexpected presidential fiat, delivered just a few months before a possible election by a potential presidential candidate, was made public from the political platform of a major plantation trade union, generally seen as pro-government. The self-evident political implications do not merit either debate or elaboration.

Preamble

In a rational world, in any industry, the employer and the employee should arrive at a fair wage through a consultative process. The unsolicited intervention of a third force with an agenda unrelated to the interests of either party, is undesirable from all points of view. Still, there are precedents, when sitting presidents have mandated wage increases in the plantation sector, for patently political reasons, ignoring the possible toxic economic consequences.

Abrupt and illogically high increases are self-defeating, as sudden, unmanageable cost inflation force enterprises to withhold or diminish essential inputs, deny upgrades, abandon new investment and, in extreme cases, even close down. Unviable enterprises cannot discharge responsibilities to society, stakeholders, the economy and the environment. When operational costs suddenly exceed revenue the only relief is a magical increase in the selling price. Bur miracles do not happen in the real commercial world.

Products prices at public auctions are determined by unpredictable local and international market dynamics of supply and demand. Hence, the producer needs to be able to operate within a framework of reasonably priced inputs, especially the worker’s daily wage, which, prior to the above increase, constituted around 65% of the unit production cost; that could well be the largest labour cost component in the unit production cost of any factory produced item, in any industry, anywhere in the world.

Estimates are that the increase of the plantation wage to Rs 1,700.00 (with EPF/ETF- LKR 1.955.00 per day) will raise the above component to about 75% of the unit cost of production. The balance input proportion, representing fertilizer, energy, chemicals, other material requirements, machinery, vehicle and building maintenance, and welfare and contingencies, offers minimal margin for cost management. With that kind of lop-sided production cost distribution, no legitimate industry can remain viable.

Market Realities

Trade unionists who seek wage increases linked directly to auction price fluctuations, and politicians who support such proposals when it suits personal political aspirations, ignore the realities of international trends of supply and demand. Wage increases, whilst being of crucial importance, especially in periods of rapid cost-of-living inflation, still need to be sustainable in the context of the relevant industry .

An analysis of world market prices of Tea and Rubber in the last three decades, will demonstrate a consistent pattern of long troughs relieved by sudden, short-lived peaks. These trends are directly linked to weather, climate, production levels, changes in consumption patterns, resultant supply and demand, exchange rate movements , inflationary or recessive trends in consuming economies, and political climate and state-imposed trade policies and tariffs.

In the case of Rubber, in addition to all of the above, speculation in futures markets, crude oil prices, innovations in synthetic alternatives and fluctuating demand in high consumption industries, such as tyre and vehicle manufacture, are key determinants in demand and price. These factors contribute to a permanent state of commodity-market volatility. They also converge to fashion “Global Economic Health”, which determines the buying and selling price of all internationally traded commodities.

All of the above is to demonstrate that, whilst accepting the imperative of a living wage for the plantation worker, that it is unrealistic and imprudent to determine a wage increase, based on industry revenues during periods of peak prices.

Impact Distribution

The mandated increase will impact tea, rubber and oil palm plantations in the RPC sector, private “bought leaf factories”, mostly in the Southern and Sabaragamuwa provinces and, in particular, about 500,000 tea small-holders, again located mostly in the above provinces. The segment delivers 72% of the National Tea Production and 65% of the National Rubber Production, and represents a community of about 1.5 million citizens. That important vote-bank, primarily Sinhala speaking, is concentrated in the South, Sabaragamuwa and in a wide swathe in the mid-country, between Pussellawa and Matale. In a presidential election these people may not vote for the man who, with one irrational and cynical gesture, impoverished them.

Smallholder Segment

Contrary to popular belief that only a few “rich companies” will be affected by the wage increase, in actual fact, the smallholder will be the biggest loser.

Due to contribution to total national production, the smallholder is the most important segment in both Tea and Rubber. Individual holdings range from around 50 ha to half-hectare extents or less. This segment relies on external labour for harvesting (and for other work as well), generally on the payment of Rs 40 per kg of green leaf. Consequent to the mandated increase, harvesting one kg of green leaf will cost them around Rs 80, with no possibility of additional revenue. The green leaf is purchased by the manufacturing factory, based on the Tea Commissioner’s formula, linked to the Factory Net Sale Average, which is determined by auction prices. Any revision of the current green payment formula, designed to relieve the supplier, will bankrupt 427 private tea factories which, collectively, manufacture 70% of the national tea production.

A smallholder, confronted by suddenly increasing input costs and diminished revenues, may respond by harvesting less often, resulting in lower crops and a poor standard of green leaf. That will affect made tea quality, resulting in lower auction prices, a diminished net sale average for the manufacturing factory and, again, a proportionate diminution of the green leaf payment to the smallholder/supplier.

Poor quality tea coming in to the auction will affect demand, diminish the national net sale average and the competitiveness of Ceylon tea, with a corresponding impact on foreign exchange earnings. Exporters seeking quality Tea are likely to move to Kenya, India, Vietnam or Indonesia, and still buy reasonable quality at one USD per kilos less than in Colombo. The overall outcome will be massive hit on every aspect of the national industry, including value-added exports.

Alternately, the smallholder may reduce costs by withholding or minimizing inputs such as fertilizer and field cultural practices. Some may either abandon their holdings or convert to other crops. In combination all these will lead to the diminution of national crop outputs which, currently, are at a three-decade low.

Up to now the most efficient operational model of tea and rubber production was the smallholder segment. The mandated wage increase has thrown that in to total disarray.

Impact on Rubber Industry

The Rubber sector will face a similar fate. Our national production has declined from 152 mn kg in 2012, to 70 mn kg in 2022 ( RRI statistics). With 65% of the production coming from the small holder sector, the wage increase will have an impact as in Tea. The prospect of reduced revenue will inhibit future replanting of rubber, which has a gestation period of six years and a productive life of about 20 years. About 60% of the national rubber production is used locally whilst annual imports are around 60 mn kg a year. The outcome will be a further decline in national production and an increase in imports, if local manufacturers of rubber-based goods are to maintain current production levels. The result will be an increased outflow of foreign exchange.

Key Economic Factors and Paradoxes

Of all major tea growing countries, Sri Lanka has the highest cost of production, highest labour cost and the lowest productivity. The new Sri Lankan wage will be about double the Indian labour cost, four times that of Bangladesh, and about 30% more than Kenya, where national average field productivity is about double that of Sri Lanka.

This 70% increase will cost the Regional Planation Companies an additional LKR 28 billion a year and with high gearing being a common feature in the sector, will also affect banks and other financial institutions adversely. The total additional annual cost to the industry will be LKR 81 billion. The current auction tea average is LKR 1,250 per kg and, with the new wage increase, the national cost of production will increase to around LKR 1,450 per kg.

Prior to this increase, the Tea/Rubber wages board minimum determination was the second highest in the country. A demand for a proportionate increase by other local industries would lead to an economic disaster in the country. Another interesting feature is that a plantation worker clocking in for a minimum 25 days per month, working a four-five hour day, will now earn much more than a garment worker who works a minimum of eight hours per day, excluding meal breaks. In fact, both a graduate teacher and a fully qualified nurse, will earn less.

A common perception is that a higher wage will entice workers to stay on the plantation, rather than migrate to other employment. Nothing could be further from the truth. Since 1992 to-date, the basic daily wage has increased from LKR 66 to LKR 1,700, whilst, during the same period, the actual worker component in the RPC sector, has declined from 32% of the resident population to 17%.

The only method by which the plantation worker can be guaranteed a fair income, whilst maintaining the viability of the industry which sustains them, is to move to an output-based payment model. Proposals based on the smallholder model, offered by the RPC sector, guaranteeing the worker up to LKR 2,000/- per day, have been steadfastly resisted by the trade unions as such models would liberate the worker from the clutches of the unions. An independent worker, earning a decent wage and in control of his own destiny, renders the union irrelevant. That is a fearful outcome for politically-aligned unions which rely on monthly worker contributions for their existence.

Consequences of Political Intervention in Enterprise

In this country State intervention in the plantation industry has a dismal history. The nationalization in the 1970’s led to the dismantling of a management system of proven efficiency, and its replacement with a state apparatus, which, over the next couple of decades, led to the accumulation of vast liabilities. That, along with other inadequacies, compelled the re-privatization of the sector in 1992.

In 2016, then President , Maithripala Sirisena, on the advice of a Buddhist monk, overnight banned the use of Glyphosate, essential for weed control in the plantations. In 2021, then president Gotabhaya Rajapaksa, on the advice of an inner coterie with no experience in plantation management, similarly banned inorganic fertilizer and oil palm. The consequences were disastrous crop declines, freezing of both ongoing and planned investment, massive operational losses in all three sectors and the disruption of the Tea, Rubber and Oil Palm industries, from which they have not recovered yet.

For close upon 200 years, the local plantation industry has demonstrated incredible resilience in surviving a series of disasters, some natural and many man-made. This mandated wage, though, may be the last straw. Historians may one day record that the great industry birthed by a Scotsman named James Taylor, was strangled to death by a Sri Lankan named Ranil Wickremesinghe.

Anura Gunasekera

(The writer is a retired plantation specialist with over 50 years experience, covering the Agency House era, the State-management interlude and the Regional Plantation Company period.)



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A plural society requires plural governance

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The local government elections that took place last week saw a consolidation of the democratic system in the country.  The government followed the rules of elections to a greater extent than its recent predecessors some of whom continue to be active on the political stage.  Particularly noteworthy was the absence of the large-scale abuse of state resources, both media and financial, which had become normalised under successive governments in the past four decades.  Reports by independent election monitoring organisations made mention of this improvement in the country’s democratic culture.

In a world where democracy is under siege even in long-established democracies, Sri Lanka’s improvement in electoral integrity is cause for optimism. It also offers a reminder that democracy is always a work in progress, ever vulnerable to erosion and needs to be constantly fought for. The strengthening of faith in democracy as a result of these elections is encouraging.  The satisfaction expressed by the political parties that contested the elections is a sign that democracy in Sri Lanka is strong.  Most of them saw some improvement in their positions from which they took reassurance about their respective futures.

The local government elections also confirmed that the NPP and its core comprising the JVP are no longer at the fringes of the polity.  The NPP has established itself as a mainstream party with an all-island presence, and remarkably so to a greater extent than any other political party.  This was seen at the general elections, where the NPP won a majority of seats in 21 of the country’s 22 electoral districts. This was a feat no other political party has ever done. This is also a success that is challenging to replicate. At the present local government elections, the NPP was successful in retaining its all-island presence although not to the same degree.

Consolidating Support

Much attention has been given to the relative decline in the ruling party’s vote share from the 61 percent it secured in December’s general election to 43 percent in the local elections. This slippage has been interpreted by some as a sign of waning popularity. However, such a reading overlooks the broader trajectory of political change. Just three years ago, the NPP and its allied parties polled less than five percent nationally. That they now command over 40 percent of the vote represents a profound transformation in voter preferences and political culture. What is even more significant is the stability of this support base, which now surpasses that of any rival. The votes obtained by the NPP at these elections were double those of its nearest rival.

The electoral outcomes in the north and east, which were largely won by parties representing the Tamil and Muslim communities, is a warning signal that ethnic conflict lurks beneath the surface. The success of the minority parties signals the different needs and aspirations of the ethnic and religious minority electorates, and the need for the government to engage more fully with them.  Apart from the problems of poverty, lack of development, inadequate access to economic resources and antipathy to excessive corruption that people of the north and east share in common with those in other parts of the country, they also have special problems that other sections of the population do not have. These would include problems of military takeover of their lands, missing persons and persons incarcerated for long periods either without trial or convictions under the draconian Prevention of Terrorism Act (which permits confessions made to security forces to be made admissible for purposes of conviction) and the long time quest for self-rule in the areas of their predominance

The government’s failure to address these longstanding issues with urgency appears to have caused disaffection in electorate in the north and east. While structural change is necessarily complex and slow, delays can be misinterpreted as disinterest or disregard, especially by minorities already accustomed to marginalisation. The lack of visible progress on issues central to minority communities fosters a sense of exclusion and deepens political divides. Even so, it is worth noting that the NPP’s vote in the north and east was not insignificant. It came despite the NPP not tailoring its message to ethnic grievances. The NPP has presented a vision of national reform grounded in shared values of justice, accountability, development, and equality.

Translating electoral gains into meaningful governance will require more than slogans. The failure to swiftly address matters deemed to be important by the people of those areas appears to have cost the NPP votes amongst the ethnic and religious minorities, but even here it is necessary to keep matters in perspective.  The NPP came first in terms of seats won in two of the seven electoral districts of the north and east.  They came second in five others. The fact that the NPP continued to win significant support indicates that its approach of equity in development and equal rights for all has resonance. This was despite the Tamil and Muslim parties making appeals to the electorate on nationalist or ethnic grounds.

Slow Change

Whether in the north and east or outside it, the government is perceived to be slow in delivering on its promises.  In the context of the promise of system change, it can be appreciated that such a change will be resisted tooth and nail by those with vested interests in the continuation of the old system.  System change will invariably be resisted at multiple levels.  The problem is that the slow pace of change may be seen by ethnic and religious minorities as being due to the disregard of their interests.  However, the system change is coming slow not only in the north and east, but also in the entire country.

At the general election in December last year, the NPP won an unprecedented number of parliamentary seats in both the country as well as in the north and east.  But it has still to make use of its 2/3 majority to make the changes that its super majority permits it to do.  With control of 267 out of 339 local councils, but without outright majorities in most, it must now engage in coalition-building and consensus-seeking if it wishes to govern at the local level. This will be a challenge for a party whose identity has long been built on principled opposition to elite patronage, corruption and abuse of power rather than to governance. General Secretary of the JVP, Tilvin Silva, has signaled a reluctance to form alliances with discredited parties but has expressed openness to working with independent candidates who share the party’s values. This position can and should be extended, especially in the north and east, to include political formations that represent minority communities and have remained outside the tainted mainstream.

In a plural and multi-ethnic society like Sri Lanka, democratic legitimacy and effective governance requires coalition-building. By engaging with locally legitimate minority parties, especially in the north and east, the NPP can engage in principled governance without compromising its core values. This needs to be extended to the local government authorities in the rest of the country as well. As the 19th century English political philosopher John Stuart Mill observed, “The worth of a state in the long run is the worth of the individuals composing it,” and in plural societies, that worth can only be realised through inclusive decision-making.

by Jehan Perera

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Commercialising research in Sri Lanka – not really the healthiest thing for research

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Image credit University of Sydney

In the early 2000s, a colleague, returning to Sri Lanka after a decade in a research-heavy first world university, complained to me that ‘there is no research culture in Sri Lanka’. But what exactly does having a ‘research culture’ mean? Is a lot of funding enough? What else has stopped us from working towards a productive and meaningful research culture? A concerted effort has been made to improve the research culture of state universities, though there are debates about how healthy such practices are (there is not much consideration of the same in private ‘universities’ in Sri Lanka but that is a discussion for another time). So, in the 25 years since my colleague bemoaned our situation, what has been happening?

What is a ‘research culture’?

A good research culture would be one where we – academics and students – have the resources to engage productively in research. This would mean infrastructure, training, wholesome mentoring, and that abstract thing called headspace. In a previous Kuppi column, I explained at length some of the issues we face as researchers in Sri Lankan universities, including outdated administrative regulations, poor financial resources, and such aspects. My perspective is from the social sciences, and might be different to other disciplines. Still, I feel that there are at least a few major problems that we all face.

Number one: Money is important.

Take the example American universities. Harvard University, according to Harvard Magazine, “received $686.5 million in federally sponsored research grants” for the fiscal year of 2024 but suddenly find themselves in a bind because of such funds being held back. Research funds in these universities typically goes towards building and maintenance of research labs and institutions, costs of equipment, material and other resources and stipends for graduate and other research assistants, conferences, etc. Without such an infusion of money towards research, the USA would not have been able to attracts (and keeps) the talent and brains of other countries. Without a large amount of money dedicated for research, Sri Lankan state universities, too, will not have the research culture it yearns for. Given the country’s austere economic situation, in the last several years, research funds have come mainly from self-generated funds and treasury funds. Yet, even when research funds are available (they are usually inadequate), we still have some additional problems.

Number two: Unending spools of red tape

In Sri Lankan universities red tape is endless. An MoU with a foreign research institution takes at least a year. Financial regulations surrounding the award and spending of research grants is frustrating.

Here’s a personal anecdote. In 2018, I applied for a small research grant from my university. Several months later, I was told I had been awarded it. It comes to me in installments of not more than Rs 100,000. To receive this installment, I must submit a voucher and wait a few weeks until it passes through various offices and gains various approvals. For mysterious financial reasons, asking for reimbursements is discouraged. Obviously then, if I were working on a time-sensitive study or if I needed a larger amount of money for equipment or research material, I would not be able to use this grant. MY research assistants, transcribers, etc., must be willing to wait for their payments until I receive this advance. In 2022, when I received a second advance, the red tape was even tighter. I was asked to spend the funds and settle accounts – within three weeks. ‘Should I ask my research assistants to do the work and wait a few weeks or months for payment? Or should I ask them not to do work until I get the advance and then finish it within three weeks so I can settle this advance?’ I asked in frustration.

Colleagues, who regularly use university grants, frustratedly go along with it; others may opt to work with organisations outside the university. At a university meeting, a few years ago, set up specifically to discuss how young researchers could be encouraged to do research, a group of senior researchers ended the meeting with a list of administrative and financial problems that need to be resolved if we want to foster ‘a research culture’. These are still unresolved. Here is where academic unions can intervene, though they seem to be more focused on salaries, permits and school quotas. If research is part of an academic’s role and responsibility, a research-friendly academic environment is not a privilege, but a labour issue and also impinges on academic freedom to generate new knowledge.

Number three: Instrumentalist research – a global epidemic

The quality of research is a growing concern, in Sri Lanka and globally. The competitiveness of the global research environment has produced seriously problematic phenomena, such as siphoning funding to ‘trendy’ topics, the predatory publications, predatory conferences, journal paper mills, publications with fake data, etc. Plagiarism, ghost writing and the unethical use of AI products are additional contemporary problems. In Sri Lanka, too, we can observe researchers publishing very fast – doing short studies, trying to publish quickly by sending articles to predatory journals, sending the same article to multiple journals at the same time, etc. Universities want more conferences rather than better conferences. Many universities in Sri Lanka have mandated that their doctoral candidates must publish journal articles before their thesis submission. As a consequence, novice researchers frequently fall prey to predatory journals. Universities have also encouraged faculties or departments to establish journals, which frequently have sub-par peer review.

Alongside this are short-sighted institutional changes. University Business Liankage cells, for instance, were established as part of the last World Bank loan cycle to universities. They are expected to help ‘commercialise’ research and focuses on research that can produce patents, and things that can be sold. Such narrow vision means that the broad swathe of research that is undertaken in universities are unseen and ignored, especially in the humanities and social sciences. A much larger vision could have undertaken the promotion of research rather than commercialisation of it, which can then extend to other types of research.

This brings us to the issue of what types of research is seen as ‘relevant’ or ‘useful’. This is a question that has significant repercussions. In one sense, research is an elitist endeavour. We assume that the public should trust us that public funds assigned for research will be spent on worth-while projects. Yet, not all research has an outcome that shows its worth or timeliness in the short term. Some research may not be understood other than by specialists. Therefore, funds, or time spent on some research projects, are not valued, and might seem a waste, or a privilege, until and unless a need for that knowledge suddenly arises.

A short example suffices. Since the 1970s, research on the structures of Sinhala and Sri Lankan Tamil languages (sound patterns, sentence structures of the spoken versions, etc.) have been nearly at a standstill. The interest in these topics are less, and expertise in these areas were not prioritised in the last 30 years. After all, it is not an area that can produce lucrative patents or obvious contributions to the nation’s development. But with digital technology and AI upon us, the need for systematic knowledge of these languages is sorely evident – digital technologies must be able to work in local languages to become useful to whole populations. Without a knowledge of the structures and sounds of local languages – especially the spoken varieties – people who cannot use English cannot use those devices and platforms. While providing impetus to research such structures, this need also validates utilitarian research.

This then is the problem with espousing instrumental ideologies of research. World Bank policies encourage a tying up between research and the country’s development goals. However, in a country like ours, where state policies are tied to election manifestos, the result is a set of research outputs that are tied to election cycles. If in 2019, the priority was national security, in 2025, it can be ‘Clean Sri Lanka’. Prioritising research linked to short-sighted visions of national development gains us little in the longer-term. At the same time, applying for competitive research grants internationally, which may have research agendas that are not nationally relevant, is problematic. These are issues of research ethics as well.

Concluding thoughts

In moving towards a ‘good research culture’, Sri Lankan state universities have fallen into the trap of adopting some of the problematic trends that have swept through the first world. Yet, since we are behind the times anyway, it is possible for us to see the damaging consequences of those issues, and to adopt the more fruitful processes. A slower, considerate approach to research priorities would be useful for Sri Lanka at this point. It is also a time for collective action to build a better research environment, looking at new relationships and collaborations, and mentoring in caring ways.

(Dr. Kaushalya Perera teaches at the Department of English, University of Colombo)

Kuppi is a politics and pedagogy happening on the margins of the lecture hall that parodies, subverts, and simultaneously reaffirms social hierarchies.

By Kaushalya Perera

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Melantha …in the spotlight

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Fun mode for Melantha Perera and Allwyn H. Stephen

Melantha Perera, who has been associated with many top bands in the past, due to his versatility as a musician, is now enjoying his solo career, as well … as a singer.

He was invited to perform at the first ever ‘Noon2Moon’ event, held in Dubai, at The Huddle, CityMax Hotel, on Saturday, 3rd May.

It was 15 hours of non-stop music, featuring several artistes, with Melantha (the only Sri Lankan on the show), doing two sets.

According to reports coming my way, ‘Noon2Moon’ turned out to be the party of the year, with guests staying back till well past 3.00 am, although it was a 12.00 noon to 3.00 am event.

Having Arabic food

Melantha says he enjoyed every minute he spent on stage as the crowd, made up mostly of Indians, loved the setup.

“I included a few Sinhala songs as there were some Sri Lankans, as well, in the scene.”

Allwyn H. Stephen, who is based in the UAE, was overjoyed with the success of ‘Noon2Moon’.

Says Allwyn: “The 1st ever Noon2Moon event in Dubai … yes, we delivered as promised. Thank you to the artistes for the fab entertainment, the staff of The Huddle UAE , the sound engineers, our sponsors, my supporters for sharing and supporting and, most importantly, all those who attended and stayed back till way past 3.00 am.”

Melantha:
Dubai and
then Oman

Allwyn, by the way, came into the showbiz scene, in a big way, when he featured artistes, live on social media, in a programme called TNGlive, during the Covid-19 pandemic.

After his performance in Dubai, Melantha went over to Oman and was involved in a workshop – ‘Workshop with Melantha Perera’, organised by Clifford De Silva, CEO of Music Connection.

The Workshop included guitar, keyboard and singing/vocal training, with hands-on guidance from the legendary Melantha Perera, as stated by the sponsors, Music Connection.

Back in Colombo, Melantha will team up with his band Black Jackets for their regular dates at the Hilton, on Fridays and Sundays, and on Tuesdays and Thursdays at Warehouse, Vauxhall Street.

Melantha also mentioned that Bright Light, Sri Lanka’s first musical band formed entirely by visually impaired youngsters, will give their maiden public performance on 7th June at the MJF Centre Auditorium in Katubadda, Moratuwa.

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