Payment problems plague 1 million plantation workers

The Assam government has taken the initiative to pay workers their wages electronically and has asked banks to open branches adjacent to tea gardens and install ATMs in estates.

The plantation sector, one of the largest sources for rural jobs, is facing the heat of demonetisation because it is not able to pay workers. Tea gardens have survived the cash crunch because tea auctions switched to the electronic platform months before demonetisation was announced. 

The government's recent decision to allow district collectors to withdraw cash from planters’ accounts and disburse plantation workers’ wages is stuck over practical difficulties like lack of enough cash with banks. 

D Vinod Sivappa, president of the United Planters’ Association of Southern India (UPASI), said the cash crunch coincided with the harvesting season for all major crops. Coffee, arecanut and pepper are harvested between now and February.

The plantation industry employs 1.3-1.4 million people and they receive wages in cash every week. Despite having bank accounts, workers prefer cash since because access to banks and ATMs is difficult in hill areas. Planters are worried about the turnout of workers at this crucial time.

The Karnataka government has started implementing a system where district collectors take cheques from planters and cash them for workers. An official from the Idukki district (Kerala) collectorate said the details of workers were being collected and procedures to open a special account were on. The wages were expected to be disbursed in three days, he added.

A couple of months ago e-auction of tea was extended to all centres in the country and payments to planters were made electronically. “As far as sales of tea is concerned, there has not been any problem,” said SS Bagaria, chairman of the Bagaria Group. But workers in tea gardens are feeling the heat. Their wages comprise 40 per cent of a tea garden’s input cost.

The Assam government has taken the initiative to pay workers their wages electronically and has asked banks to open branches adjacent to tea gardens and install ATMs in estates. A December 5 deadline has been set to open Jan Dhan accounts for tea garden workers. Assam produces over 50 per cent of the country’s tea and houses 850 big estates with over 1 million workers. 

A tea industry executive said 10-15 per cent of tea garden workers in Assam and 5 per cent in West Bengal were migrants who needed to be paid in cash because they could not open bank accounts.

Jute farmers registered with the Agricultural Produce Marketing Committee have accounts with cooperative banks. These farmers cannot exchange old currency notes or withdraw money because of the prevailing restrictions on cooperative banks. "Jute farmers are very hesitant to join the banking system for payments," said the owner of a jute mill.

Photograph: Jayanta Dey/Reuters.