The question posed after reading the statistics below is:
Why do we need many layers of certification bodies adding costs to the product when these facts can be easily obtained and verified by any party.
There are some well-known tea companies and major buyers who insist that certifying with a fair trade organization is a guarantee that producers and workers get a fair deal for their product.
The comprehensive facts that I have listed below apply only to Ceylon Teas and I believe that they demonstrate a very fair laid down policy for the estate workers without adding further layers of heavy costs on producing the product. It is my belief that any consumers looking at these facts will be perfectly assured that the system is inherently fair. It is also my opinion that the fair trade concept has been hijacked by those purveyors of tea who constantly seek to put pressure on the purchasing price. The U.K. is known for good value on teas but it is very possible that good value can mean that unacceptable pressure is being exerted on the production sector in order to achieve that questionable reputation. This island has very strong unions and part of their strength comes from the fact that the amount of available number of workers is less than the number that the estates require. Furthermore the Sri Lankan Government has created very strict and transparent regulations for wage and benefit negotiations enforceable by law across the plantation sectors.
I understand that there are certain situations that arise in parts of the world where perhaps small family units producing products like coffee or bananas, need to find reliable agents to sell to and help with negotiating prices for their products in order to earn a reasonable living. That is not the situation in Sri Lanka.
I am also aware that trying to criticise conditions that were operated in the 1800’s and right up to the 1900’s as is often done by some organizations trying to justify their existence, is extremely disingenuous. Times change: all those years ago conditions were basic and developing. Originally these estates were created by individuals and families, encouraged by the Governor, who required funds to be generated for the island to be able to develop communications such as roads, bridges, a railway system and a port together with the usual Government structure to support the island. Those families laboured under extremely difficult conditions, clearing land and suffering all manner of diseases as witnessed on the old headstones in the cemeteries. The owners and their workers started in basic mud huts which had grass thatched roofs. That system welded a very tight and loyal relationship that grew between the family and their workers. One of our own early estates was named after the wife of the owner in Tamil, Doteloya being called Blackett Nona which came from Katharine Blackett’s efforts to care for the estate workers during the coffee crash. Having created the coffee plantations, thirty years on the whole system was being wiped out by a fungal disease that could not be controlled with the families and their workers being left in dire straits.
That era was eloquently summed up by Sir Arthur Conan Doyle in the words – “those were the royal days of coffee planting in Ceylon before a single season and a rotting fungus drove a whole community through years of despair to one of the greatest commercial victories which pluck and ingenuity ever won. Not often is it that men have the heart when their one great industry is withered to rear up in a few years another as rich to take its place, and the tea fields of Ceylon are as true a monument to courage as is the lion at Waterloo.”
Those families that managed to survive and change to tea retained their workers but it was at this time that Companies in London arrived to invest and take over cheap properties that had been abandoned and by the 1950’s there were few of those original family owned estates left.
As with all ventures over the years conditions and pay for workers have increased at a pace that could be sustained. The original deep ties to those family owners has been replaced by a corporate ownership system with an important sector of locally owned smallholdings.
The bi-annual negotiation laid down by the Government must take place and the final result is published as a Government Gazette that all estates have to abide by. It is to be noted that the government since nationalization and even under the privatization programme which allows the 23 private companies to tender for blocks of estates, still owns the land and so is duty bound to supply essentials like schools, hospitals, roads, electrification of the estates, modern clean water provision and sewerage treatment plants. Organizations such as Fairtrade have therefore decided that in this case they should apply a floor price for tea which has been decided as being $2.60 per kilo and that should tea prices drop below that floor price they would contribute. However the level of the floor price is well below prices that are received for Ceylon teas and for 2016 so far the lowest average price received has been $2.78 at any one auction and the annual average price to date is $2.93. See the section on Fair Trade.
Example to highlight advantages Estate workers receive compared to an equivalent city worker based on the 2015/16 wage agreement:
An estate woman plucker using the table below for the 2015 agreed basis on a 5 day week can earn Rs.15,125/= per month and some well managed estates can work 6 days a week with 7 days a week in periods of really heavy cropping.
A reasonable plucker can earn a daily plucking norm bonus of Rs.193/= PER DAY which equates to approximately Rs.4,246/= from over kilos to add to her Rs. 15,0125/= giving a total approximate income per month of Rs.19,300/=. In June 2016 the U.K. £ would equate to Rs.201/= however in October 2016 it is now down to Rs.179/=
A plucker’s husband can also earn Rs.15,125/= per month as well and any children over 16 years (Age of registration) can also earn these salaries.
2002 – 2016 Collective Agreements between the Estates & the Unions
Below I have listed the the various bi-annual agreements reached:
| 2002 | 2004 | 2006 | 2009 | 2011 | 2013 | |
| * Basic Daily Wage | Rs.121/= | Rs.135/= | Rs.170/= | Rs.405/= | Rs.380/= | Rs.450/= |
| ** EPF &ETF | ||||||
| **** Attendance Incentive – 75 % | Rs.12/= | Rs.25/= | Rs.70/= | Rs.90/= | Rs.105/= | Rs.140/= |
| *** | Rs.14/= | Rs.20/= | Rs.20/= | Cancelled | Rs.30/= | Rs.30/= |
| Price Share Supple | ||||||
| ***** | ||||||
| Productivity Bonus | ||||||
| Total Possible Daily Wage | Rs.147/= | Rs.180/= | Rs.260/= | Rs.525/= | Rs.572/= | Rs.620/= |
| Increase in Percentage | 44.0 % | 102.0 % | 8.9 % | 8.4 % |
| 2015 | 2017 | 2019 | 2025 | |||
| * Basic Daily Wage | Rs.450/= | Rs.500/= | Rs.700/= | Rs.2000/= | ||
| ** EPF &ETF 15 % | Rs.67.50 | Rs.75/= | Rs.105/= | |||
| ****Attendance Incentive – 75 % | Rs.140/= | Rs.60/= | ||||
| ***Price Share Supple | Rs.30/= | Rs.30/= | Rs.50/= | |||
| Productivity | Rs.140/= |
| Bonus | ||||||
| Total Possible Daily Wage | Rs.687.50 | Rs.805/= | Rs.855/= | |||
| Increase in Percentage | 10.9 % | 17 % | 0.07 % |
Over Kilos Plucked- Rs./Kg – – – – – – Rs.25/- –Rs.40/=
** EPF = Employer’s Provident Fund
ETF = Employer’s Trust Fund
As can be seen from the trends above, in 2006 the basic wage was raised very significantly by 44 % with little emphasis on productivity. Again in 2009 the wage was increased even more significantly with extra income from the over kilos bonus shown below. This agreement put the estate companies in an extremely tight situation and some could not afford these levels. The unions understood that endless huge increases in wages without equivalent increase from consumers was a recipe that would bankrupt the system that supported them. Since then they have agreed to a lower emphasis on the basic wage and more emphasis on turnout and productivity which is an important step for the estates. Settlements are now nearer 8 or 10 %. On my visit to the island in 2019 there was considerable unrest nit just at the estates but the Unions had spread their discontent within the island population ti demand a minimum daily wage of Rs.1,000/= per day. No agreement could be reached and in the end the Government suggested that the estate companies should pay that going forward and the Government would pay the amount due if back dated to the date the negotiations started. I have now learnt that the plan has been abandoned by the estate companies as impossible to fund and negotiations continue with the rate shown above under 2019.
At the next agreement the pressure will be there to raise the wage structure to that of other workers in the island who do not get the same benefits and this is likely to hasten abandoning large areas of high grown tea and machine plucking elsewhere. It is extremely important that consumers understand this problem and decide what sort of prices they are prepared to pay. Work of this type and skill cannot be rewarded by equating it to the cost of water.
Recently in up-dating figures I have had discussions with a very experienced planter friend who was also Director of an extremely successful group of estates as well as having been a past Chairman of the Fairtrade Producers Association of Sri Lanka. As part of those discussions he sent me some comments which I think are extremely relevant and would be of interest to any members of the trade or general tea consumers who might wonder why Ceylon teas are higher in price than teas from other sources:
“Why the cost of Ceylon tea is so high” :
• Sri Lanka wages are higher than the other major tea producing countries.
- • Cost of plucking is high as the tea leaves are selectively plucked to ensure maximum quality and flavor. With machines a worker in Kenya plucks around 125 kgs daily. (see the over kilo earnings table below for Ceylon tea plucker).
- • Some major buyers insist on certification like Rainforest certification as a precondition to buy tea from the estates.
- • Use of machines is limited due to the hilly terrain, thus low productivity.
Wage comparison table for 2016:
Taking a Colombo clerk or security guard at a company business, these people earn approximately Rs:1,000/= per month or Rs.22,000/= per month but do not have some of the same advantages that estate workers receive shown below:
WAGE COMPARISON
| WAGE COMPARISON | ||
| Tea Estate Worker -Rs | Colombo worker Rs | |
| Wage | 680 | 1000 |
| Cost Food per day | 150 | 300 |
| Housing | Free | 5000 room per month |
| Water | Free | 500 |
| Electricity | 400 | 400 |
| Medical | Free | Free but cost of transport etc. |
| Wife Employment | Guaranteed | Not certain. |
References to items in the Agreement Table above:
* Where a worker performs work above the normal 8 hours the Employer shall pay at
1 V times the basic wage and also included the Price Share Supplement (PSS).
*** Variable Price Share Supplement ( Share of price received at auction). This is no longer fixed to the price received at Auction and is a set sum.
Attendance Bonus:
**** Attendance Incentive is based on 75 % attendance on work offered days by the estate. Where a worker has qualified for this payment during the preceding 3 months but is hospitalized, that worker will be considered as if he or she had worked on the days hospitalized. However the period of hospitalization must be supported by documentary evidence. This benefit is sometimes dropped in preference to a higher basic sum.
This payment is not included in the earnings total for EPF & ETF. The amount is shown in the wages table on page three in this sheet.
Below is the table for Over Kilo Payment which is the Productivity Bonus in the Agreement table:
***** Productivity Bonus – Only paid if the worker attains the over kilos norm set by the estate. It is separate to the daily wage table in page 2 but is part of the daily wage calculation.
| 2004 | 20062009 | 2011 | 2013 | 2015-16 | |
| Over Kilo Rate: | Rs.7/= | Rs.12/= | Rs.17/= | Rs.20/= | Rs.23/= |
| 2016-17 | |||||
| Over Kilo Rate: | Rs.28.75 |
This is paid for every Kg of Green leaf plucked above the Daily Norm set by the estate, based on weather, field and flush in the field. The best pluckers pick well above the norm and most pluckers will pluck over kilos. Lately the Norm has been set at a static figure rather than changing each week.
This can be a very significant sum to good pluckers as a Norm can be set at 14 to 18 Kg & the top plucker can and did in my time pluck some 35 to 40 Kg. In times of heavy flush after rain the norm can be raised to nearer a figure of 20 or 22 Kg. I have given the sort of daily income advantage
derived from this bonus based on the 2015/16 agreed rate at the top of page two. The agreed figure for this payment under that agreement is Rs.22/= but with the payment of EPF /ETF at 15 % on this payment it equates to Rs.23/= per kilo as far as the estate is concerned.
However since that calculation a new agreed rate has just been notified to me for 2016/17 which is Rs.25/= +EPF/ETF @ 15 % = Rs.28.75 as shown in the Productivity Bonus table.
Over – kilo Earnings Based on 2015 Bonus Rate:
| M | Days | Norm | O/Kg | Work Days | Total O/Kg | Days | NetO/KgRate | NetEarn | AvgEarn per day | |
| Dry or very wet months | 4 | 120 | 18 | 80 | 0 | 120 | 22 | – | ||
| Medium Cropping months | 6 | 184 | 18 | 10 | 150 | 1500 | 184 | 22 | 33,000 | |
| High Cropping months | 2 | 61 | 22 | 20 | 61 | 1220 | 22 | 26,840 | ||
| Totals | 12 | 365 | 291 | 2720 | 59,840 | 205.64 |
| Assumptions: average figures of an average plucker |
Below is the Basis for the EPF & ETF Contributions:
** EPF & ETF is the Employers Provident Fund & the Employers Trust fund described below and will sometimes be shown as a sum on a separate line or is an addition that will be added on the basis shown
below included in the daily wage by agreement or shown as a separate addition depending on what the unions and estate companies agree.
| Contribution to Pension | 2004 | 20062009 | 2011 | 2013 | 20152016 |
| Company Contribution Provident Fund | 12 % | 12 % | 12 % | 12 % | 12 % |
| Company contribution to ETF | 03 % | 03 % | 03 % | 03 % | 03 % |
The EPF/ETF (Employers Provident Fund & Employers Trust Fund). The provident fund is paid at 55 years of age as a lump sum. The ETF allows the estate to invest in shares etc for the fund and the worker can transfer the fund from estate to estate if he moves but the fund can only be released once it has been in operation for 5 years.
Up to the 1970’s workers were paid a monthly pension as they did not have bank accounts and were liable to have any lump sum payment taken by the money lenders who waited whilst we paid their monthly wages or many of the men celebrated by visiting the local caddy (Shop or bar) and the money was gone. Eventually we paid the women separately so that they had control of that sum as far as we could possibly police. Today the pension is paid into a co-operative bank account.
Most estates today have a co-operative store and banking facilities on the estate.
HOLIDAY PAY:
This is calculated on Gross salary x days actually worked x 17 or the number of days qualified for 288 days worked for men & 264 days for women.
Men
| Men | Leave: | Women |
| 72 – 143 days | 4 Days paid leave | 66 – 131 days |
| 144 – 215 days | 8 Days paid leave | 132 – 197 days |
| 216 – 287 days | 12 Days paid leave | 198 – 263 days |
| 288 days + | 17 Days paid leave | 264 days + |
MATERNITY BENEFIT:
| NO OF CHILDREN BORN: | DAYS LEAVE DUE: | VALUE OF LEAVE: |
| 1st & 2nd. Children | 72 days paid leave | Rs.32,400/= |
| 3rd. Child and a still-birth | 36 days paid leave |
Value of this allowance to the worker Inclusive of inclusive of EPF @ 10 %: The value of this allowance at 72 days is Rs.32,400/=
1st Child
Entitled Amount = 84 days x 6/7 x Rs.450/=. Equals Rs.32,400/=
Less: EPF 10% = Rs.3,240/=
Balance Pay = Rs.29,160/=
Details of the total value paid by the Estate inclusive of EPF & ETF:
Maternity Benefit Amount = Rs.32,400/=
EPF 12% = Rs.3,888/=
ETF 3% = Rs.972/=
Total = Rs.37,260/=
RETIRING GRATUITY:
This is only paid after workers have completed 5 years of service on an estate.
Basic wage Rs.450/= x 14 x number of years worked.
MEDICAL:
Free medical facilities
Free milk to infants below 1 year = 1 Kg Powdered milk per infant for a year.
Free flour to children 1 – 10 years old
Sick leave payment at half normal rate for 14 days a year
Workers compensation scheme
Free transport to hospital
WELFARE:
Welfare facilities usually by government departments but some estates supply: Creche and pre-school facility provided free with estate or Government higher education schools.
Free Housing, clean water supply and sewerage disposal
Estate funded activities:
Tea Allowance: 0.5 kg per month for workers & pensioners – Value Rs.350/=
For Kovil (Temple): Estate donates – paint & rice.
Lime – Per Room: 4 packets per year to wash rooms for their festival.
Funeral assistance: Rs. 2,000/= + 6 workers given to cut the grave.
Transport to coroner: If this is required
Other: Facilities for drama, computer training, sport, volleyball & cricket plus company & district sponsored tournaments.
CONCLUSION:
Our contribution should be to the estates who produce the tea in order that they may continue to afford these high wages and contribute to the other activities that are extremely vital to viability of the estates such as the re-planting programme. Each estate should be committed to replanting 3 % of its land planted in tea every year so that the whole area of planted tea is replaced on a cycle of every 35 years for low country – 60 years for high grown areas. The early plantings in the 1860’s were largely with seed tea and cropping was less severe. Up to the 1950’s many estates had tea bushes that were nearly 100 years old but with modern V.P. clones and heavier manuring the bush needs replacing more regularly and that is a hugely costly exercise for the estates. The cost of replanting is approximately £15,307 (Rs.2,755,230/= in Oct 2016) per hectare. If replanting is not carried out as required yields drop and the whole economics is affected.
To me fair trade appears to be a tool for commercial advantage rather than benefiting Ceylon tea. My decision is based on having a family who worked in this industry for five generations.
I have examined the morality of joining the fair trade idea taking into account the prices that we pay the estates for the top quality teas that we have operated with for some years now. I have come to what I believe is a fair conclusion which is that the workers are very adequately rewarded by the latest wage agreement.
International Certifications Guaranteeing Standards
Finally most estates and packing facilities in the island have been grading up to and securing a range of internationally recognised certifications for many years such as: ISO 9001 ISO 9000 ISO 22000 HACCP SGS FLO ETB
The above certifications cover areas such as clean handling of the product, welfare standards including age of employment, safety at work and many other issues. The island has one of the strictest controls of pesticide & herbicide use with the TRI testing and controlling the licensing of any product that importers wish to import into the island. Usage of such products is also carefully controlled and has led to the island’s teas having an international reputation for residue clean teas.
The above information was compiled by Robert Wilson, of Robert Wilson’s ‘Ceylon’ Teas U.K. with much help from Dushantha Delwita and may not be used or copied without his permission and reference to source.