{"id":67612,"date":"2020-02-16T18:34:53","date_gmt":"2020-02-16T23:34:53","guid":{"rendered":"http:\/\/dbsjeyaraj.com\/dbsj\/?p=67612"},"modified":"2020-02-16T18:34:53","modified_gmt":"2020-02-16T23:34:53","slug":"claims-by-sri-lankan-plantation-companies-that-they-are-running-at-a-loss-are-false-many-companies-gain-windfall-profits-because-they-also-operate-as-tea-auctioneers-and-exporting-businesses-while-pl","status":"publish","type":"post","link":"https:\/\/dbsjeyaraj.com\/dbsj\/?p=67612","title":{"rendered":"Claims by Sri Lankan plantation companies that they are running at a loss are false. Many companies gain windfall profits because they also operate as tea auctioneers and exporting businesses.While plantation workers are paid a pittance, senior tea industry directors receive massive salaries."},"content":{"rendered":"

By M. Thevarajah<\/strong><\/p>\n

On January 14, President Gotabhaya Rajapakse\u2019s office issued a media release declaring that the president wanted the minimum daily wage of tea plantation workers increased to 1,000 rupees ($US5.50), starting on March 1.<\/p>\n

The announcement was immediately hailed by Ceylon Workers Congress (CWC) leader Arumugam Thondaman, a cabinet minister in the new government, who claimed that it fulfilled a promise made by Rajapakse during last year\u2019s presidential elections.<\/p>\n

Rajapakse\u2019s announcement is a patent fraud. The president and his Sri Lanka Podujana Peramuna (SLPP) minority government, who are preparing a snap general election sometime in April, are sitting on a social time bomb, with rising working-class opposition over low wages and the high cost of essential items. Key sections of the working class, including the tea plantation workers, have been involved in a series of wage struggles over the past 18 months.<\/p>\n

Rajapakse\u2019s pay proposal is a crude attempt to diffuse the mounting anger of plantation workers over wages and win their votes in the forthcoming election. He hopes to win a two-thirds parliamentary majority for the SLPP and push through legislation to establish authoritarian methods of rule.<\/p>\n

<\/p>\n

Rajapakse declared last November that if elected he would ensure that plantation workers\u2019 daily wage would be lifted to 1,000 rupees. While he hoped this would win him plantation workers\u2019 votes, Rajapakse only secured 36 percent of the votes in the Nuwara Eliya district where large numbers of plantation workers live.<\/p>\n

Estate workers\u2014the majority of them Tamil-speaking\u2014are hostile to Rajapakse and fully aware of his brutal role as former President Mahinda Rajapakse\u2019s defence secretary during the bloody war against the separatist Liberation Tigers of Tamil Eelam. Plantation workers, particularly youth, were subjected to systematic state victimisation during this period.<\/p>\n

Rajapakse\u2019s proposed increase comes nowhere plantation workers\u2019 demands during their indefinite national strike in December 2018. They wanted their 500-rupee basic wage doubled to 1,000 rupees, with additional increases in pensions and other benefits.<\/p>\n

The CWC and other plantation unions betrayed the strike, calling it off after 11 days and then signing a collective agreement in January 2019 that increased the daily basic wage by just 200 rupees, which along with additional allowances, took it to 750 rupees. The plantation companies also included their obligatory monthly payment to the Employees Provident Fund, to falsely claim that the daily wage of the plantation worker was increased to 855 rupees.<\/p>\n

Using this bogus figure, the media is falsely reporting that Rajapakse\u2019s 1,000-rupee daily wage involves a 145-rupee or 17 percent increase on the \u201ccurrent 855-rupee daily wage.\u201d<\/p>\n

Sri Lanka\u2019s 22 major plantation companies, and the Ceylon Employers\u2019 Federation (CEF) which represents them, immediately opposed the new pay proposal. This would cost nearly 6 billion rupees annually, the CEF claimed, and have a \u201cdisastrous impact\u201d on the \u201cunprofitable\u201d tea industry.<\/p>\n

However, after separate discussions last week with the Sri Lankan President\u2019s Secretary P.B. Jayasundara and Plantation Industries Minister Dr. Ramesh Pathirana, the CEF agreed to come up with an \u201calternative\u201d pay rise model.<\/p>\n

On Sunday, CEF plantation sector chairman Roshan Rajadurai told a meeting that \u201cno decision\u201d had been taken on the pay issue but that if a \u201cproductivity-based system\u201d was implemented workers could earn \u201cmore than a 1,000 rupees a day.\u201d The \u201cproductivity-based system\u201d is part of the tea industry\u2019s demands for expansion of its \u201crevenue sharing model,\u201d which the unions endorsed in last year\u2019s pay deal.<\/p>\n

Under this scheme, plots of around 1,000 or more tea bushes are allocated to a worker and his family to maintain and harvest. Workers\u2019 hard-won social gains, such as pensions and other benefits, are eliminated. The worker and his family are paid a portion of the income from the tea bushes, after the companies deduct their costs and profit margin. Workers have rejected this exploitative, cost-cutting system in several estates where it has been implemented.<\/p>\n

Some companies have also started introducing digital identity cards and electronic weighing machines to drive up production. Last year, 10 days after Rajapakse was elected president, almost 5,000 plantation workers from the Up-Cot area near Hatton went on strike against these methods. The strike action was betrayed by the trade unions.<\/p>\n

Sri Lankan plantation workers face an international chain of capitalist exploiters. Plantation companies constantly demand higher productivity and lower production costs in order to compete with other tea-exporting countries, such as Kenya and India, in the world market.<\/p>\n

Claims by Sri Lankan plantation companies that they are running at a loss are false. Many companies gain windfall profits because they also operate as tea auctioneers and exporting businesses. In 2018, for example, the average auction price of tea was about 580 rupees a kilogram, while the export price was 850 rupees.<\/p>\n

While plantation workers are paid a pittance, senior tea industry directors receive massive salaries. In 2017, for example, the annual remuneration of the three executive directors of Kelani Valley Plantation was 35 million rupees (about $US200,000) (see: \u201cSri Lankan plantation companies reap huge profits while attacking workers\u2019 wages and conditions\u201d).<\/strong><\/em><\/p>\n

At the same time multi-national corporations such as Unilever, which control the international tea market, earn huge profits after buying from the client export companies in the tea-producing countries.<\/p>\n

Along with the CWC, other plantation unions have endorsed Rajapakse\u2019s so-called pay rise proposal. The \u201c1,000 movement,\u201d which was initiated by the Frontline Socialist Party and other pseudo-left groups, are also promoting the president\u2019s bogus pay rise proposal as good coin.<\/p>\n

Chinthaka Rajapakse, a spokesman for the \u201c1,000 movement,\u201d offered the organisation\u2019s support, telling the media that \u201cif the government is serious not only about increasing daily wages of workers but also ensuring that the tea industry will be stable in the long run, it has to make a number of interventions.\u201d<\/p>\n

In other words, workers can win their demands and improve their living standards only if the government intervenes to ensure and maintain industry stability. This is impossible under the capitalist system in which profits are extracted from the labour of the working class.<\/p>\n

Like all other corporations, the tea industry fights to maximise its profits and maintain its market share in competition against its global rivals. The most successful companies are those that ruthlessly drive down all labour costs, including wages and other hard-won benefits (see: \u201cHow giant tea companies exploit Kenyan plantation workers\u201d).<\/p>\n

Underpinning all the official propaganda about Rajapakse\u2019s wage proposal are long-held preparations for a major restructuring of the Sri Lankan tea industry to drive up productivity and unleash a full scale assault on plantation workers\u2019 wages and conditions.<\/p>\n

Workers can only confront and defeat this attack by mobilising independently of the trade unions and in unity with their class brothers and sisters around the world on the basis of a socialist and internationalist program.<\/p>\n

The Socialist Equality Party (SEP) is the only organisation that advocates this perspective. It fought for this during the plantation workers wage strike in December 2018, calling on workers to build their own action committees independent of the trade unions. Abbotsleigh Estate workers powerfully responded and established an action committee during the national strike.<\/p>\n

The SEP urges plantation workers and other sections of the working class to establish their own action committees in preparation for the future struggles that lie ahead.<\/p>\n

Courtesy:World Socialist Web Site<\/em><\/p>\n

Tweet<\/a><\/div>","protected":false},"excerpt":{"rendered":"

By M. Thevarajah On January 14, President Gotabhaya Rajapakse\u2019s office issued a media release declaring that the president wanted the minimum daily wage of tea plantation workers increased to 1,000 rupees ($US5.50), starting on March 1. The announcement was immediately hailed by Ceylon Workers Congress (CWC) leader Arumugam Thondaman, a cabinet minister in the new …<\/p>\n

Continue reading ‘Claims by Sri Lankan plantation companies that they are running at a loss are false. Many companies gain windfall profits because they also operate as tea auctioneers and exporting businesses.While plantation workers are paid a pittance, senior tea industry directors receive massive salaries.’ »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[12],"tags":[],"_links":{"self":[{"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/posts\/67612"}],"collection":[{"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=67612"}],"version-history":[{"count":1,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/posts\/67612\/revisions"}],"predecessor-version":[{"id":67613,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/posts\/67612\/revisions\/67613"}],"wp:attachment":[{"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=67612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=67612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=67612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}