Plantation sector asks government to share social cost burden

"Commodity plantations is the only sector in the country mandated to provide social and welfare benefits to their employees under the Plantation Labour Act, 1951," plantations' apex body's president T.V. Alexander said here.

Addressing about 800 planters at the 117th annual conference of the United Planters' Association of Southern India (Upasi), Alexander said that three high-powered committees had recommended sharing the cost by the government in the ratio of 50:50.

The first inter-ministerial committee, set up by the union labour ministry in 2002, made the recommendation in 2003 after examining the issue.

Subsequently, the O.P. Arya Committee and the S.N. Menon Committee, set up to study the competitiveness of the Indian tea industry, endorsed the sharing of social costs by the central and state governments.

"It is unfortunate that the recommendations of the three committees remain unimplemented so far," Alexander told union Commerce Ministry Additional Secretary A.K. Mangotra, who was the chief guest at the occasion.

Under the Act, planters are mandated to provide free housing, medical care for employees and their families and education facilities for their children in addition to negotiated wages.

"The additional cost arising from the statutory provisions has eroded India's competitiveness in the global commodity plantations sector over the years," Alexander lamented.

The plantation sector, which plays an integral role in the economy of the three southern states -- Kerala, Tamil Nadu and Karnataka, contributes around 25 percent of the country's tea output and almost the entire production of coffee, spices and natural rubber.

Of the 1.5 million growers and 2.3 million labourers working in the plantation sector in the country, south India accounts for 83 percent (1.25 million) of growers and 57 percent (1.31 million) of workforce.

About 90 percent of growers are small, holding less than two hectares out of the total area of 1.1 million hectares of land in the three states.

"Though plantations may not be as important economically as they were a few decades ago and their contribution to the country's agricultural gross domestic product (GDP) is 2.5 percent, they provide jobs to the lower strata of society in remote locations where alternative avenues of employment are almost nil," Alexander pointed out.

However, in terms of value, the plantation commodities account for eight percent of the agricultural and allied product exports, estimated at Rs.5,645 crore (Rs.56.5 billion) in fiscal 2009-10.

The total value of plantation commodities in the last fiscal was estimated at Rs.25,443 crore (Rs.254 billion).

"The share of southern India in the total value of plantation commodities is 63.4 percent and in export value 70.3 percent," Alexander noted.