An Echelon Media Company
Sunday September 24th, 2023

Sri Lanka RPCs to pay Rs.1,000 daily wage on higher productivity, trade unions yet to agree

ECONMYNEXT- Sri Lanka’s regional plantation companies (RPCs) have agreed to pay its labourers a 1,000 rupee daily wage, in return for higher productivity, a Planters’ Association of Ceylon statement said.

The Planters’ Association of Ceylon, the lobby group for the RPCs, said it met with government and trade union leaders on 17 occasions to reach a deal, and is now calling for workers to produce two additional kilogrammes of tea a day or one additional kilo of rubber in return for the wage hike.

Trade unions have yet to agree on the proposed deal, the Planters’ Association said.

Plantations and trade unions hold talks on changes to wage structures every two years, but the RPCs were forced to the negotiation table a year earlier on a presidential directive in January to pay a 1,000 rupee minimum wage from March 01, up from the existing 855 rupees.

The Planters’ Association said alternative revenue-sharing or outgrower models which have been piloted have shown workers could earn 40,000-80,000 rupees a month as entrepreneurs who partner with RPCs, compared to the current 21,375 rupees or the proposed 25,000 rupees.

In such alternative pilot projects, workers have plucked 30-35 kilogrammes daily, compared to the historical average of 18 kilogrammes under normal wage agreements, Planters’ Association Spokesperson Roshan Rajadurai said.

In low-country smallholder estates, 30 kilogrammes of tea is plucked daily, while in a ‘Best Tea Plucker’ competition held recently, the winner plucked 19.4 kilogrammes in one hour, he said.

The daily plucking average in Kenya is 60 kilogrammes, while in South India it is 50 kilogrammes and in Assam 36 kilogrammes he said.

External conditions are currently not conducive for tea producing in Sri Lanka, with low prices at the tea auction in Colombo due to weak demand and high costs of production, Rajadurei said.

Weak oil prices and the coronavirus impact on the global economy is pushing demand for tea down in major markets in the Middle East and Russia, he said.

“Despite this, trade unions insist on sticking to such archaic wage models as the daily wage system which are rooted in a colonial past and best suited to the 1800s,” he said.

“This is an absurd position that does nothing for the workers themselves.”

“As managers, we would like nothing better than to simply give 1,000 rupees a day or more, but given the fact that we are selling a product at a lower price than we are producing it, how could such a path possibly be sustained without throwing the entire industry, and the nation into further debt?”

“We are all experienced professionals who are legally bound to take decisions that will not result in our companies going into bankruptcy.”

Rajadurai said the RPCs are asking for a marginal increase in productivity for the higher wage, but trade unions “are adamand that they want something for nothing, even if it collapses the industry.”

He said given the impasse, RPCs are confident the government will intervene.

Plantations Industry Minister Romesh Pathirana has said that the Treasury would intervene if the two parties are unable to reach a compromise. (Colombo/Mar16/2020)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lanka India industrial zone around Trinco, maritime links mooted

ECONOMYNEXT – Sri Lanka’s Ports Minister Nimal Siripala de Silva had highlighted the desire of both the Governments to work closely to develop the industrial zone at Trincomalee, after accepting an invitation to participate in a maritime summit.

The Global Maritime India Summit (GMIS) will be held in India from October 17-19, 2023 at Mumbai where Sri Lanka has been invited at a partner country.

At a curtain raiser event on September 22, India’s High Commissioner in Colombo, Gopal Baglay had said both countries were working on enhancing sea connectivity according to a vision document launched during a recent visit of the President of Sri Lanka to India.

Minister de Silva will lead a delegation from Sri Lanka to the summit.

Secretary to the Ministry of Ports, Shipping and Waterways, Government of India, T K Ramachandran said the Global Maritime India Summit aims strengthen the Indian maritime economy by promoting global and regional partnerships and facilitating investments.

The event will give an opportunity to the Government of Sri Lanka to attracting greater investment from India in development of its maritime infrastructure, Ramachandran said.

It will also facilitate greater business to business interactions. (Colombo/Sept24/2023)

Continue Reading

Sri Lanka brings back import para tariff on milk

ECONOMYNEXT – Sri Lanka has brought back an import para tariff called the Ports and Airports Levy, to several grades of milk powder.

Milk powder has been removed from a list of PAL exemptions, making them liable for a 10 percent tax.

The PAL para tariffs are also a contentious issue in terms of export competitiveness, and the government has previously given undertakings that they will be eliminated.

Trade freedoms of the poor figure in an IMF/World bank reform program with the governments.

Milk is a protein rich food, in a country where children of poor families are facing stunting and malnutrition.

Economic nationalism is seen at high levels in food, with several businessmen are pushing for trade protection, amid an overall autarkist (self-sufficiency) ideology, going directly against policies followed in East Asia, which the same as hold up as examples.

Sri Lanka keeps dairy product prices up ostensibly to bring profits to a domestic dairy company and farmers.

Sri Lanka also keeps maize prices up, ostensibly to give profits to farmers and collectors. (Colombo/Sept22/2023)

Continue Reading

Sri Lanka govt warns liquor manufacturers: pay defaulted tax or lose licence

ECONOMYNEXT – Sri Lanka government which is struggling to raise the state revenue despite   higher taxes, has warned liquor manufacturers to pay defaulted taxes or lose their licence.

The government is now getting tough with past tax defaulters amid concerns over falling short of this year’s revenue target agreed with the International Monetary Fun (IMF).

“Liquor manufacturing firms owe us 660 crore rupees (6.6 billion rupees),” Siyambalapitiya told  reporters on Thursday (21).

“Most of this or around a third is the only excise tax amount to be paid. The rest is penalty. If a liquor manufacturer does not pay on time, we impose a penalty of 3 percent per month This means 36 percent (penalty) per annum,” he said.

“We have given them deadline to repay the basic excise taxes. If they don’t pay, we will cancel their licence.”

President Ranil Wickremesinghe’s government committed an ambitious revenue target among many other reforms to the International Monetary Fund (IMF) in return to a $3 billion loan package.

However, the revenue could face a short fall of 100 billion rupees, State Finance Minister Ranjith Siyambalapitiya has said.

A new Central Bank Act also has legally prevented the government of printing money at its discretion as  in the past.  (Colombo/September 24/2023)

Continue Reading