Earlier this month, the crisis-ridden Assam tea industry averted a showdown with several hundred thousand workers with the approval of a 20% holiday bonus, but tensions remain high.
The Assam Tea Tribes Students’ Association (ATTSA), has been pressing for an increase of the Durga Puja bonus for garden workers to 20% from the existing 8.33%, which is the minimum amount of bonus as stipulated under the Payment of Bonus Act of 1965. Durga Puja is celebrated Oct. 4 this year.
Planters said they were unable to provide the maximum bonus in 2019, but workers vowed to accept nothing less after taking part in several mass demonstrations.
ATTSA said the Puja Bonus is an emotional issue for the tea garden workers, warning there might be further disruption of law and order in tea gardens across the state if the demand is not addressed properly.
The Consultative Committee of Planters’ Association (CCPA), the apex body of the tea industry in India, explained during a press briefing that the industry was unable to pay the maximum bonus due to an ongoing major financial crisis resulting from high production costs – mainly labor.
CCPA is an umbrella body of the Indian Tea Association, the Tea Association of India, the Assam Tea Planters’ Association, Bhartiya Cha Parishad and the North East Tea Association (NETA). CCPA represents more than 800 of the largest gardens. In Assam production has shifted to smaller tea gardens (under 10 hectares), which now contribute about 40% of the state’s total production (692 million kilograms in 2018).
“The tea industry in Assam had faced challenges in the past but not as severe as in the last few years,” Vivek Goenka, chairman of CCPA and the Indian Tea Association, said during the press briefing.
Since 2014, auction prices of Assam tea have hovered between INR153 per kilogram and INR156 per kilogram while the average cost of production has touched INR200 per kilogram. More than 90% of the teas are sold for INR200 ($2.78) or less with 60% bringing only INR150 ($2) per kilogram. “This has caused huge distress in the company’s cash flow and the situation has turned so bad that banks have stopped giving us loans,” Goenka said during the press briefing.
Echoing Goenka, a few captains of the industry told World Tea News that while prices of tea have increased 1%, the cost of vital inputs like coal, gas, sulfur, etc. used in the production of tea have increased by nearly 7% in the past few years. “The 18% increase in workers’ wages last year has come as a bolt from the blue,” an owner of a tea garden in upper Assam told World Tea News.
Goenka said although tea production has increased from 979 million kilograms in 2009 to 1,339 million kilograms in 2018, thanks to small tea growers, domestic per capita consumption (at 786 grams per year) has not kept pace with the rapid increase in production, resulting in an oversupply in the market.
Tea workers in Assam were not ready to accept the “crisis theory” put forward by the industry as a reason for its inability to pay the maximum limit of a 20% bonus.
Led by the Assam Chah Mazdoor Sangha (ACMS), the apex body of tea workers in Assam, several tea workers organizations said the industry simply cannot wash its hands of financial obligations by merely saying it is “going through a rough phase.”
ACMS general secretary Rupesh Gowalla said losses incurred by a few tea companies cannot be generalized.
“The tea industry cannot say they cannot afford to pay a 20% bonus because they continue to attract a good price for quality tea. Besides, the actual average price of tea is never known because about 80% of the total tea manufactured is sold direct, dodging the auction. They never disclose the price of what is sold in the open market. We have no idea the extent of the crisis,” he said.
He recommended the central government institute a probe by an expert committee to the crisis. “If there is a real crisis the government should act accordingly. But on matters of wages, bonus and other welfare measures to the workers we are not going to compromise,” Gowalla said.
Industry leaders are responsible for “the manufacturing, blending, packaging and marketing. If it has failed to attract the desired market for the product, it must acknowledge failure in business management and marketing strategy,” he said.
The ATTSA and Chah Jonogustiyo Jatiyo Mahasabha are two other influential bodies representing tea workers.
President of Chah Jonogustiyo Mahasahba, Daya Shah, said his organization would launch a massive protest if the workers failed to receive a 20% bonus.
The threat comes at a precarious time for Assam where a draft National Registry of Citizens (NRC) failed to include about four million Bengali Muslims from neighboring Bangladesh. The Muslims fled across the border to Assam during Bangladesh’s war of independence from Pakistan. These residents have until Aug. 31 to prove they resided in India prior to 1971 or they will be deemed illegal immigrants subject to return to Bangladesh. Several million have been unable to produce authoritative documents. Bangladesh, meanwhile, refuses to accept the deportation of millions setting the stage for what could be the largest crisis of stateless people in the world.
Source: ITA, Consultative Committee of Planters’ Association (CCPA), East Mojo