Plantations in South India face a tough time on cost surge, low price

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Published: July 30, 2019 1:49:55 AM

Plantations in south India are passing through a challenging time due to high cost of production and not so remunerative prices, United Planters’ Association of Southern India (Upasi), an apex body of planters, said on Monday.

Upasi reports that prices of tea, coffee and natural rubber are much below the cost of production.

Plantations in south India are passing through a challenging time due to high cost of production and not so remunerative prices, United Planters’ Association of Southern India (Upasi), an apex body of planters, said on Monday.

AE Joseph, president, Upasi, in a press statement, said that one-and-a-half century old plantations in south India provide livelihood and welfare amenities to a large number of workforce, mostly women, in under-developed and remote locations.

“Plantations being labour intensive, labour component has high impact on the cost. Wages in south India are very high compared to other plantation states and prices have no co-relation with the cost of production. In today’s open economy, prices are determined by world supply and demand situation. Most of the importers and major buyers insist on sustainability certificate from foreign certification agencies to ensure that the plantation commodities they procure are produced in a sustainable manner, but it is unfortunate that they do not offer a sustainable price,” he added.

Upasi reports that prices of tea, coffee and natural rubber are much below the cost of production.

A detailed analysis of the plantation commodity prices with other commodities done from 1995 by Upasi is quite revealing. “The price of paddy increased 4.86 times, maize 5.67 times, wheat 4.84, gram 6.6, arhar 7.09, moong 8.72 and urad 7, whereas tea increased only by 2.46 times, coffee arabica 1.92 and robusta 1.58 and rubber 2.47. If the inflation rate is factored in, the increase should have been 4.36 times,” Upasi sources said.

A comparison with wages, which constitute more than 50% for plantation commodities, is more appalling, Joseph said. “Tea workers’ wages during the same period has increased by 7.69 times, coffee 9.72 times and rubber 8.2 times. Plantation commodities in India need to improve the land and labour productivity considerably to remain in business and it requires considerable investment in research, which the industry at present is not in a position to do,” he said.

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