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Starvation stares at thousands of plantation workers in Kerala as several small and medium companies are abandoning their estates.
About 15,000 workers lost their jobs as half a dozen estates and 14 tea factories in the hilly district of Idukki have closed down. Many are not getting wages, and quite a few companies are diverting the provident funds of the workers into their operations in a desperate bid to stay afloat.
In Peermade, five workers killed themselves recently. The state government is giving assistance in the form of free ration, medical and educational allowance, but the aid has not reached all the workers.
The advent of globalisation has also blunted the effectiveness of the trade unions.
A delegation, comprising members of the ruling Congress-led United Democratic Front and Parliament's Standing Committee on Commerce, is scheduled to visit the plantations this week, but the workers are sceptical of the outcome.
"The crisis is the result of the wrong policy initiatives of the central government under its globalisation agenda. The Indo-Sri Lankan agreement has turned Sri Lanka into a conduit of cheap tea into the country. The tea plantations cannot be saved unless the accord is revamped," state opposition leader V S Achutanandan, who visited the plantations last month, said
Ironically, the government has been going ahead with a move to bring down the import tariff on agricultural products under the World Trade Organisation pact.
The implementation of the recommendations of the task force on indirect taxes to fix the maximum import duty on farm products at 150 per cent would aggravate the crisis in the plantation sector, which employs about half a million workers, the opposition and ruling front leaders said.
"The recommendations will result in large-scale imports of farm products and a consequent fall in domestic prices. This will hurt Kerala the most since its farm products are dominated by cash crops," Kerala Revenue Minister K M Mani said.
The state government had urged the central government to reject the recommendations and hike the import duty on many products, including rubber, he said.
The plantation industry does not appear to be worried about tariffs. They are concerned with high tax structure and the rising input costs that affect their competitiveness. Prices of most plantation products like tea, coffee and rubber in both the markets have been witnessing a steady decline over the years.
Tea is the worst hit with the price ruling below the cost of production. The average auction price of tea at present is Rs 47 per kg against the cost of production of Rs 60 per kg, according to planters.
The coffee price has declined from Rs 80 per kg to Rs 49 per kg. The rubber price came down from Rs 51.22 per kg in 1996 to around Rs 30 per kg, they added.
The United Planters Association of South India has made a case for correction of anomalies in tax structure, including exemption from excise duty on tea.
It has suggested a survival package consisting of a slash in wages and linking it to productivity implemented through joint efforts of the state government, employers and workers.
Trade union leaders see the suggestion as part of an attempt by the planters to use the crisis to exploit the workers.
All India Trade Union Congress leader C A Kurien, said that even financially strong companies are forcing the unions to re-negotiate the remuneration at lower rates.
The planters have maintained that the companies would sink further if the trade unions did not cooperate with them in overcoming the present crisis adding the strong resistance by the workers in the state to link their wages to productivity is a major factor responsible for the present crisis.
This is in addition to the high agriculture income tax prevailing in the state. The rate is much higher compared to the competing countries. The Association Planters of Kerala, which has been mounting pressure on government to bring down the tax, said that the planters in Sri Lanka are able to dump cheap tea into the country because the taxes there are low.
The agriculture income tax in Kerala is 60 per cent, while it is only 15 per cent in Sri Lanka and between 18 to 35 per cent in Bangladesh, Malaysia, Thailand and Indonesia, with whom India has to compete in the global market.
The state government has given a temporary exemption from agricultural income tax to small planters. It is unwilling for a blanket reduction in the light of its tight financial position.
Also Read: More Reports from Kerala
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