charindra chandrasena  00:03
Hello, Dana.

Dhananath Fernando  00:03
Hi, Darinden.

charindra chandrasena  00:04
Hello, Satya. Hi. Is

Dhananath Fernando  00:06
it the doing some dramatical thing, or

charindra chandrasena  00:10
I'm being I'm being extra dramatic today with the voice. No, unfortunately, I'm a little under the weather, but batting on, as they say.

Dhananath Fernando  00:21
Thank, thank you. You have taken it so serious that we are somehow appear to host this podcast. Yeah, thank you very much.

charindra chandrasena  00:28
Today we have extra depth in our presentation. Good one. Lots to talk about, but I want to start on this interesting debate that's going on about the budget, and and generally one of the most notable things that happened in the budget was the salary increase or the wage increase that was given to the estate workers, not necessarily the wage increase, but how the wages are going to be increased. So they have proposed 200 rupee increase from the RPCs, the regional plantation companies, and another 200 as a daily attendance Incentive, incentive, right, or allowance from the government. Firstly, either of you can take this. Tell me why it's so important, or is it important for the salaries to be increased of the estate workers.

Dhananath Fernando  01:44
Yeah. So Jari, I think first of all, I hope no one will just cut a small clip of it and use it. I mean, do a spin because there are a lot of sensitive issues that we are going to talk on on this topic. First of all, we really do not want to see anyone living below the poverty line and having you know a miserable life. That's number one. So we all ideally has to have a salary that which is livable, and this has been coming for a long time. So definitely we are on that side. So that's number one. Number two is also to do that. Whether who should you know give that I mean who should support that and taxpayers anyway have a mechanism to support for an example Astra Sumer. It's not only the plantation workers have a separating of of at the same time across the country there are many people who live below the poverty line, not even earning probably 1000 500,300 even as per the World Bank study. So there is a mechanism called social safety net, where it basically covers up. That's one side of it, and then another side comes okay on the plantation sector. While some of these plantation companies are making like massive profits, whether is it reasonable to in a way supplement their payroll because in a way, by increasing, asking them to also increase by 200, but also giving an additional 200, I think it's debatable. I'm afraid that we will have a right or wrong answer here because I feel it's a more a proactive measure by the president or like the finance ministry that he has taken a move. Whether it's the right or wrong, we don't know. But now, other everyone else has to react. Sort of a thing is my observation because now he has said, okay, we are going to give 200 rupees. Of course, it's debatable. Okay, whether you are going going to give it to the private sector who are already profitable, but also there's other side. You really do want to uplift the living standard of these people who are in miserable condition? So there's, I don't see there's win or lose for any side, but we understand both sides. But I think the main arguments are whether the taxpayer should pay that on economic principle. Ideally, the company's profits should not be supplemented supplemented by the taxpayer money. I mean, if it's helping the profitability of the companies, it should not. It is beyond against the principle. You don't

charindra chandrasena  04:08
want to inflate profits.

Dhananath Fernando  04:10
Inflate profits. The

charindra chandrasena  04:10
government shouldn't get involved in subsidising profits essentially. But

Dhananath Fernando  04:15
again, does it mean that the government should has no role on or like rather than the government, with the taxpayers, those who at least do fairly well, definitely, there has to be a social safety net that should uplift the people who are below the pretty much in you know miserable living conditions, plantation sector as well as across the country. So in that sense, actually the taxpayers, we are for a strong social safety net. The economic policy should focus on that,

charindra chandrasena  04:43
but but the question is: This is the one industry where the government has to ensure that the workers fall within. I mean, fall above the poverty line, have a social safety net. And that kind of thing, an organised industry.

Dhananath Fernando  05:02
Yeah.

charindra chandrasena  05:02
Because agriculture is not an organised industry. So isn't that the problem that people are having? That this is supposed to be since the privatisation of these estates in the early 90s, the estates were supposed to become independent.

Dhananath Fernando  05:19
Yeah. So on there, I would like to provide few clarity. Again, this is not taking any side. Now the on what has happened was, as you recall, first it was during 70s it was nationalised, and then this is some management contract with the RPCs, regional plantation companies. So management contract is actually the state is owned. The land is owned by the state. The management contract, and there's a there's a challenge because these lease agreements are is expected to expire in 2045, or most of these regional plantation companies. So there's a productivity argument that the if you want to increase the productivity of plucking or productivity of the tea cultivation. You have to have new replanting that needs to take place. But the replanting takes probably about six seven years because first replanting itself is a massive capex. You have to remove the plants. You have to plant. You have to replant, and it takes about six seven years to grow the plant and come to a level that you can practice. So that will take about good 1012 years. So I think the plantation companies are reluctant to make that investment because they don't know whether their agreements will get extended or not in 2045. At the same time, our pluckers on the other side, I think they there's I really cannot recall the exact number of pluckings that they need to do for a week, but it's under capacity. So whether this argument is whether it has to be productive base or whether it's attendance base is a is a debate. My view is ideal it should be productive base, not because of anything else. Look at the same small holder companies because even in the tea sector there are regional plantation companies, but the majority comes from the small holding companies. For their average labour cost is lower because small holding it's about I think less than five acres per person.

charindra chandrasena  07:18
But but it forms the bulk of the production in Sri Lanka.

Dhananath Fernando  07:22
Absolutely.

charindra chandrasena  07:22
So I think 60% plus, if I remember correctly, are from smallholders.

Dhananath Fernando  07:28
Absolutely, smallholders. And also look at the processing. Now the regional plantation companies have their own tea factories. They only process their tea, but the smallholder guys, of course, they don't own a tea factory. No, so they have their operatives. They have their tea shakti programme, which also, in a way, the government has funded many years ago, and they basically process anyone's tea. So there have been productivity angle which has come on the small holder angle, while the economic theory sometimes when you have economies of scale. When you have like bigger plantations, there is no argument for that. But the small holders have found it in a way how to do it productively because they really they want to really sustain. And at the same time, their average labour cost is comparatively lower than the regional plantation companies. So my view is ideally it has to be more productivity engaged, not because of anything else. Because ideally, now for an example, for a tea plucker, what we have to look at is he or she is daily take home or monthly take home. So if it's a flexible working environment, like they let's say do plucking for like if they do the plucking, let's say, the 20 kilogrammes, the target, or like the 30 kilogrammes, let's say in I don't know the exact conditions, like in six hours or seven hours. So regardless of that daily attendance thing, if they can actually commit to that output, and if they have other part-time work opportunities, it could be on tourism, it could be on anything. So then you basically uplift the living standard of that community because ultimately you take care of what they earn at the end of the day. But connecting it to a daily, you know, attendance bonus because you know then you have to come all 25 days to work. And the plantation companies may also jigging with the system because they do the scheduling. They can only work for 17 days or 21 days, so they may not be eligible for that. Actually, for that you know monthly and and the

charindra chandrasena  09:26
plantation companies have been asking for a productivity linked one for a long time. For a long time, I think if I remember correctly, at least eight years or so, they have been asking for productivity linked system. Who is blocking that, Tara? And Satya, you can come in as well.

Dhananath Fernando  09:41
It's obvious there's a lot of politics because since there's a vote voter block there. So

charindra chandrasena  09:47
that's that's the with the comparison between the smallholders and the RPCs. Another thing is that the labour power because the labour. Is so unionised with the RPCs and less so with the smallholders. The RPC workforce, labour force gets to demand more, and also they have the political capital behind them as well. Absolutely, right in the in the state sector, in the you know high grown areas. On that point, Satya, what is exactly the problem that the plantation workers are facing? If you can, because I know you've done some work on this. What is their life like?

Speaker 1  10:37
Yeah, I think before getting to this question on what exactly their life is a kind of touch on what exactly the budget also did, and what I kind of my view on it, and I kind of agree with some of the things that Dana kind of highlighted as well. So I think there's a lot of question in terms of the role that the government play in private sector management, right? So I mean, it's publicly available. These companies are making massive profits, and I think Arutha also recently came up with a policy report where they have published the profits that these companies are making. So, if you are actually making this amount of profit, then there is this question of why are you passing the burden of fair compensation into the pockets of the general public. Is it really the general public's responsibility to ensure that the workers of these companies are paid a wage with which they can live with dignity? I think dignity becomes a very important word in this conversation, in this equation, and the question that you asked me also, in terms of what are the living conditions of these people, and I think what we should be empathetic towards, even in terms of you know policy, and we are talking in terms of the context of this budget. I think the key concern should be that this is a community that has been historically and systematically marginalised in this country, so that brings me to social protection and the need for a robust social protection mechanism in this country that includes this community meaningfully in Sri Lanka's social protection system and programmes and the entire mechanism of it, and we'll get into the details of it as we move on with this conversation. But I think, in terms of talking about living conditions of these people and policies that are put forward that affect the day-to-day, the realities, the lived experiences of these people, I think. Can we

charindra chandrasena  12:38
elaborate on that now itself, Satya? Because I want to set the ground for the next stage of the conversation, so a lot of people may know that they are not living in the greatest condition. But what are the specifics of it, and what would be the solution from a social safety net angle?

Speaker 1  12:59
No, right. So to approach that, I think something we should also understand is the fact that Sri Lanka's social protection mechanism has been plagued by many issues, starting from inclusion-exclusion areas, politicisation, and we saw that with Samudi since its implementation in 1995 to also its transition to Aswasuma, right? So I mean, we are currently conducting a dipstick study on this to understand the status quo of Sri Lanka's social protection mechanism, and you know, with the people that we are speaking to, without exposing any of their names. What I can say is that yes, there is a lot of satisfaction in terms of how these inclusion and exclusion errors has been tackled in this transition from samadhi to asbestos, but still there is a long way to go. The point I'm trying to make is the system already has these inefficiencies, already has these areas. But when you look, when you talk about these errors and inefficiencies that plague the system in the context of the plantation community, the way that these inefficiencies affect these people. They it it it it's not in the way that would affect the rest of the country. It's it's disproportionate is really the word I'm looking for. So, for example, now interview. Do you mean to

Dhananath Fernando  14:17
say, Satya, like you know the exclusion happens for a specific reason, or whether the because of that exclusion, the hit on you is I mean someone with let's say Colombo poverty poor person versus someone in you know state poverty, whether because of that exclusion error the impact is different is what I'll explain

Speaker 1  14:40
to you in terms of inclusion. So you know these people live in line rooms, right? So they don't live in like houses that we do, and that is something that is well known. So in terms of exclusion and how family units are counted in, there was a lot of question as to how many families actually live in this one line room, and I think it was only last year or 2000 and. 23. I might not be getting the year accurately, but there was a Gasset notification that came out, and it's specific. I think this was last year, but.


Transcribed by https://otter.ai