Crucial negotiations between the parties today would either continue a period of relative industrial peace or end in confrontation.
The Planters’ Association of Ceylon ( PA) said prices for plantation commodities, tea and rubber and rubber based products have reduced. The tea price debacle for plantation crops was that tea prices realized were reduced by over Rs. 100 per kilo. Currently the Colombo net sales average ( NSA) is about Rs.350 per kilo. Plantation companies' cost of production ( COP) is in excess, Rs. 450.
Rubber is now an unsaleable product, consequent to a drop in global oil prices. Synthetics have taken over the alternatives and rubber based products now depend on synthetic raw material for their production needs.
Trade Union demands did not consider industrial down trend consequent to such price reductions.
Chairman PA Roshan Rajadurai said their negotiating proposals were based on a productivity formula; that is kilos plucked over the norm, could give an industrious plucker a wage of over Rs. 900 per day. He confirmed such productivity based wage structures were operative in other tea producing countries as well. Notably, India and Kenya.
The main cost component in plantations is worker wages. The cost factor under this expenditure item was about 60 percent. "Our brief, was that although all workers, men or Women, were paid equal wages, the men were less productive than women, Rajadurai said.
"Plantation managements were privatized because they was a drain on state finances. There was no plausible reason to believe that state ownership of the plantations could continue to be operative at that financial level. Privatization, subject to emergence of the ‘Golden Share Holder’ was a feature of the process at that time. 1992.
"Plantations were privatized. Since then plantation companies sustained continuous losses. There were about three years, some companies were profitable.
"Collectively, losses over the past approximately 20 years were substantial, Rajadurai, said. Cumulative losses amount to approximately Rs. 55 billion.
"The hypothetical position would have been that if plantations continued under state control such expenditure would have been the responsibility of the Treasury.
"Apart from wages, Plantation Companies invested in improvement to these holdings to ensure industry continuation. Factories were modernized, infrastructure improved, and more importantly welfare facilities were attributes that focused on allround improvement to worker welfare, Rajadurai pointed out.
"Child welfare, medical facilities, improvement to housing, and similar social welfare activities were continued and are improving.