Features
Recipe for reform: Smallholders hold the key to productivity in Sri Lanka’s tea industry
by K. L. Gunaratne
With nearly 500,000 smallholders in total, the tea smallholder sector is a significant contributor to the production and output of Ceylon Tea in Sri Lanka, and across the globe. We are often called the ‘backbone’ of our tea industry, and with good reason.
Sixteen percent of Sri Lanka’s arable land belongs to the tea sector. Of this, tea smallholders operate in 60% of the total tea land and account for more than 70% of the total tea produced. According to the Tea Control Act, tea lands between 20 perches and 10 acres are considered “Tea Small Holdings” across the country.
I am a tea smallholder myself. My journey began in 1977 with a two-acre tea land. I now operate three small tea lands while simultaneously serving as the Chairman of the Sri Lanka Federation of Tea Smallholders. Running a smallholding over the past three decades (or more) has not been an easy feat. No matter how big or small your tea plot is, ensuring that the land is well managed, tea is correctly harvested, and the quality of Ceylon Tea is upheld are challenging standards to meet every day.
Currently, a great deal is being made about the tea industry and tea companies being in hot water over concerns on wages, productivity, output, and quality. As such we felt it was important to share lessons from a tea smallholder perspective to help refine best practices and discover a sustainable way forward. It is essential that the industry – as a collective – ensures a paradigm shift in the way we’ve been managing this sector. While it is true that the industry was introduced by the British in 1867, the challenges we face today are totally different from then, and there is no reason as to why our management practices should not evolve with the times.
Basic industry dynamics
Tea smallholder plantations are found commonly across the island. Most low-country tea comes from plantations in Ratnapura, Galle, Matara and Kalutara. Mid-country smallholdings are widespread across, Kegalle and Kandy. Up-Country tea comes from Nuwara Eliya and Uva.
A majority of tea smallholders are both managers and harvesters of their lands. Small tea plots are easy to manage, and if you own one, you and your family will likely tend it. The larger the tea plot, the more decentralised management becomes – quite similar to the basics of how the much larger tea companies function. However, unlike the big tea companies – widely known as Regional Plantation Companies (RPCs) – smallholders are not bound by a ‘Collective Agreement’ when it comes to the matter of worker compensation. Sri Lanka’s Industrial Disputes Act of 1950 defines the ‘Collective Agreement’ as an agreement relating to the terms and condition of employment of workmen in any industry. Within the tea industry, this agreement mainly focuses on worker remuneration and is renegotiated every two years.
With wage negotiations approaching early next year, industry actors across the board seem to be at cross-roads on the best way forward. The only point on which there seems to be much agreement is that reform is needed and urgently. This is a battle fought every two years, and unfortunately, there are no winners; only losers. By contrast, smallholders like us who are not bound by such an agreement have the independence to make decisions we feel are best for our workers, the industry and the legacy of Ceylon Tea.
While we use the Collective Agreement as a benchmark for the rate of payment, we have one crucial advantage, which is that we have the freedom to decide on the model of payment. For us, the Collective Agreement is only a guideline. Our main focus is therefore in ensuring that we are able to offer workers a method of payment that is attractive, while still remaining sustainable as a business.
Lesson from tea smallholders
Here’s how we work: As a baseline, tea harvesters are paid a rate of Rs. 30 for every kilo they harvest. Some harvesters pluck up to an average of 30 kgs on a good day. A good day is when the weather, the soil and harvesting practices are all in our favour. Leaves on each tea bush are harvested on rotation every 7-10 days. This means that leaves from each bush are plucked at least three times a month. A tea plot needs more than just the expertise of tea harvesters to yield a successful output. Besides tea harvesters, we also have other fieldworkers who engage in manual labour oriented tasks like weeding, manuring and up-keeping estate infrastructure who are paid a daily wage of Rs. 1000. These fieldworkers work eight hours a day.
As illustrated above, for tea harvesters, our method of payment is far from an unrewarding, fixed daily wage model. Instead, each harvester is paid for the kilos of tea they yield – which is to say: a productivity linked model of remuneration.
Until the 2000s, like the RPCs, tea smallholders also paid harvesters and tea workers a daily wage. However, we found that this became a real challenge when trying to retain workers and maintain profitability, and so a collective decision was taken by tea smallholders to shift towards a productivity-linked wage, as we saw this to be far more efficient and effective for the industry.
Speaking from direct personal experience, the ability to remunerate tea harvesters based on output has been liberating for them and for myself. While this has helped me manage my tea lands better and yield higher output, it has also given me the time to venture into other areas of work I am passionate about. For instance, I was able to pursue my passion of setting up the National Pre-School Development Foundation; this foundation aims to train pre-school teachers in Early Childhood Development within plantation communities. For tea harvesters, moving out of a daily payment system has opened up a path for them to secure higher earnings while increasing mobility of labour – meaning that workers were freed up to actively pursue work on different smallholder plots in order to boost their earnings even further.
Over the past few years, tea harvesters who work on smallholder plots have evolved into entrepreneurs themselves. Driven by the need to improve efficiency and output, harvesters themselves have become ‘agents of change’. Management and production practices have become smarter, output-oriented and have resulted in improvements in the quality of the tea leaf itself.
A recent study by the International Labour Organisation confirms these observations which I have personally witnessed over the years as a smallholder, namely: that casual workers engaged in tea smallholdings usually earn a higher daily wage compared to the plantation workers and contribute towards more productive work (Future of work for Tea Smallholders in Sri Lanka, ILO, 2018). This is simply due to the fact that the people we contract to work on our plots are paid solely based on their productivity.
Over the years, although the tea smallholder sector has evolved to suit the times, it is unfortunate that the rest of our industry has been held back from progress by forcing the continuation of a basic wage system that does not prioritize or sufficiently reward productivity. RPCs continue to play an important role in our industry – particularly in terms of upholding the international image and reputation of Ceylon Tea through their commitments to securing international standards and certifications.
Hence it is essential that the RPCs are able to continue operations in a sustainable manner. A collapse in the RPC sector would create major risks to the entire industry’s reputation for the highest quality standards and its capacity for innovation – given that more recent advancements in mechanization, climate-friendly factories, use of drone technology and IT to optimize production and supply chain have only been made possible due to their investments. Such advancements can only be scaled down to provide benefits to tea smallholders once a path to implementation has been cleared by RPCs. Failure to facilitate this progress will ultimately jeopardize the sustainability of the entire industry.
Moreover, the first and most pressing solution to this dilemma is obvious to all parties. The wage model must be revised. Our experience as tea smallholders is clear proof of this fact and should not be lightly disregarded. We are all advocates of our tea, and what hurts one sector of our industry will ultimately impact all of us. A paradigm shift is necessary, and it can only start with a long-overdue update to the way in which, workers are paid.
(The author is the Chairman of the Sri Lanka Federation of Tea Small Holders. The Federation of Tea Small Holders is an industry body aimed at promoting the advancement and development of tea small holdings in the country. In 2018, tea small holders contributed to more than 70% of over the overall tea production in the country.)
by Dr Gotabhya Ranasinghe
Senior Consultant Cardiologist
National Hospital Sri Lanka
When we sought a meeting with Hon Dr. Ramesh Pathirana, Minister of Health, he graciously cleared his busy schedule to accommodate us. Renowned for his attentive listening and deep understanding, Minister Pathirana is dedicated to advancing the health sector. His openness and transparency exemplify the qualities of an exemplary politician and minister.
Dr. Palitha Mahipala, the current Health Secretary, demonstrates both commendable enthusiasm and unwavering support. This combination of attributes makes him a highly compatible colleague for the esteemed Minister of Health.
Our discussion centered on a project that has been in the works for the past 30 years, one that no other minister had managed to advance.
Minister Pathirana, however, recognized the project’s significance and its potential to revolutionize care for heart patients.
The project involves the construction of a state-of-the-art facility at the premises of the National Hospital Colombo. The project’s location within the premises of the National Hospital underscores its importance and relevance to the healthcare infrastructure of the nation.
This facility will include a cardiology building and a tertiary care center, equipped with the latest technology to handle and treat all types of heart-related conditions and surgeries.
Securing funding was a major milestone for this initiative. Minister Pathirana successfully obtained approval for a $40 billion loan from the Asian Development Bank. With the funding in place, the foundation stone is scheduled to be laid in September this year, and construction will begin in January 2025.
This project guarantees a consistent and uninterrupted supply of stents and related medications for heart patients. As a result, patients will have timely access to essential medical supplies during their treatment and recovery. By securing these critical resources, the project aims to enhance patient outcomes, minimize treatment delays, and maintain the highest standards of cardiac care.
Upon its fruition, this monumental building will serve as a beacon of hope and healing, symbolizing the unwavering dedication to improving patient outcomes and fostering a healthier society.We anticipate a future marked by significant progress and positive outcomes in Sri Lanka’s cardiovascular treatment landscape within the foreseeable timeframe.
by Fr. Emmanuel Fernando, OMI
Jesuit Fr. Aloysius Pieris (affectionately called Fr. Aloy) celebrated his 90th birthday on April 9, 2024 and I, as the editor of our Oblate Journal, THE MISSIONARY OBLATE had gone to press by that time. Immediately I decided to publish an article, appreciating the untiring selfless services he continues to offer for inter-Faith dialogue, the renewal of the Catholic Church, his concern for the poor and the suffering Sri Lankan masses and to me, the present writer.
It was in 1988, when I was appointed Director of the Oblate Scholastics at Ampitiya by the then Oblate Provincial Fr. Anselm Silva, that I came to know Fr. Aloy more closely. Knowing well his expertise in matters spiritual, theological, Indological and pastoral, and with the collaborative spirit of my companion-formators, our Oblate Scholastics were sent to Tulana, the Research and Encounter Centre, Kelaniya, of which he is the Founder-Director, for ‘exposure-programmes’ on matters spiritual, biblical, theological and pastoral. Some of these dimensions according to my view and that of my companion-formators, were not available at the National Seminary, Ampitiya.
Ever since that time, our Oblate formators/ accompaniers at the Oblate Scholasticate, Ampitiya , have continued to send our Oblate Scholastics to Tulana Centre for deepening their insights and convictions regarding matters needed to serve the people in today’s context. Fr. Aloy also had tried very enthusiastically with the Oblate team headed by Frs. Oswald Firth and Clement Waidyasekara to begin a Theologate, directed by the Religious Congregations in Sri Lanka, for the contextual formation/ accompaniment of their members. It should very well be a desired goal of the Leaders / Provincials of the Religious Congregations.
Besides being a formator/accompanier at the Oblate Scholasticate, I was entrusted also with the task of editing and publishing our Oblate journal, ‘The Missionary Oblate’. To maintain the quality of the journal I continue to depend on Fr. Aloy for his thought-provoking and stimulating articles on Biblical Spirituality, Biblical Theology and Ecclesiology. I am very grateful to him for his generous assistance. Of late, his writings on renewal of the Church, initiated by Pope St. John XX111 and continued by Pope Francis through the Synodal path, published in our Oblate journal, enable our readers to focus their attention also on the needed renewal in the Catholic Church in Sri Lanka. Fr. Aloy appreciated very much the Synodal path adopted by the Jesuit Pope Francis for the renewal of the Church, rooted very much on prayerful discernment. In my Religious and presbyteral life, Fr.Aloy continues to be my spiritual animator / guide and ongoing formator / acccompanier.
Fr. Aloysius Pieris, BA Hons (Lond), LPh (SHC, India), STL (PFT, Naples), PhD (SLU/VC), ThD (Tilburg), D.Ltt (KU), has been one of the eminent Asian theologians well recognized internationally and one who has lectured and held visiting chairs in many universities both in the West and in the East. Many members of Religious Congregations from Asian countries have benefited from his lectures and guidance in the East Asian Pastoral Institute (EAPI) in Manila, Philippines. He had been a Theologian consulted by the Federation of Asian Bishops’ Conferences for many years. During his professorship at the Gregorian University in Rome, he was called to be a member of a special group of advisers on other religions consulted by Pope Paul VI.
Fr. Aloy is the author of more than 30 books and well over 500 Research Papers. Some of his books and articles have been translated and published in several countries. Among those books, one can find the following: 1) The Genesis of an Asian Theology of Liberation (An Autobiographical Excursus on the Art of Theologising in Asia, 2) An Asian Theology of Liberation, 3) Providential Timeliness of Vatican 11 (a long-overdue halt to a scandalous millennium, 4) Give Vatican 11 a chance, 5) Leadership in the Church, 6) Relishing our faith in working for justice (Themes for study and discussion), 7) A Message meant mainly, not exclusively for Jesuits (Background information necessary for helping Francis renew the Church), 8) Lent in Lanka (Reflections and Resolutions, 9) Love meets wisdom (A Christian Experience of Buddhism, 10) Fire and Water 11) God’s Reign for God’s poor, 12) Our Unhiddden Agenda (How we Jesuits work, pray and form our men). He is also the Editor of two journals, Vagdevi, Journal of Religious Reflection and Dialogue, New Series.
Fr. Aloy has a BA in Pali and Sanskrit from the University of London and a Ph.D in Buddhist Philosophy from the University of Sri Lankan, Vidyodaya Campus. On Nov. 23, 2019, he was awarded the prestigious honorary Doctorate of Literature (D.Litt) by the Chancellor of the University of Kelaniya, the Most Venerable Welamitiyawe Dharmakirthi Sri Kusala Dhamma Thera.
Fr. Aloy continues to be a promoter of Gospel values and virtues. Justice as a constitutive dimension of love and social concern for the downtrodden masses are very much noted in his life and work. He had very much appreciated the commitment of the late Fr. Joseph (Joe) Fernando, the National Director of the Social and Economic Centre (SEDEC) for the poor.
In Sri Lanka, a few religious Congregations – the Good Shepherd Sisters, the Christian Brothers, the Marist Brothers and the Oblates – have invited him to animate their members especially during their Provincial Congresses, Chapters and International Conferences. The mainline Christian Churches also have sought his advice and followed his seminars. I, for one, regret very much, that the Sri Lankan authorities of the Catholic Church –today’s Hierarchy—- have not sought Fr.
Aloy’s expertise for the renewal of the Catholic Church in Sri Lanka and thus have not benefited from the immense store of wisdom and insight that he can offer to our local Church while the Sri Lankan bishops who governed the Catholic church in the immediate aftermath of the Second Vatican Council (Edmund Fernando OMI, Anthony de Saram, Leo Nanayakkara OSB, Frank Marcus Fernando, Paul Perera,) visited him and consulted him on many matters. Among the Tamil Bishops, Bishop Rayappu Joseph was keeping close contact with him and Bishop J. Deogupillai hosted him and his team visiting him after the horrible Black July massacre of Tamils.
Sri Lanka-Singapore Free Trade Agreement
By Gomi Senadhira
senadhiragomi@gmail.com
“You might tell fairy tales, but the progress of a country cannot be achieved through such narratives. A country cannot be developed by making false promises. The country moved backward because of the electoral promises made by political parties throughout time. We have witnessed that the ultimate result of this is the country becoming bankrupt. Unfortunately, many segments of the population have not come to realize this yet.” – President Ranil Wickremesinghe, 2024 Budget speech
Any Sri Lankan would agree with the above words of President Wickremesinghe on the false promises our politicians and officials make and the fairy tales they narrate which bankrupted this country. So, to understand this, let’s look at one such fairy tale with lots of false promises; Ranil Wickremesinghe’s greatest achievement in the area of international trade and investment promotion during the Yahapalana period, Sri Lanka-Singapore Free Trade Agreement (SLSFTA).
It is appropriate and timely to do it now as Finance Minister Wickremesinghe has just presented to parliament a bill on the National Policy on Economic Transformation which includes the establishment of an Office for International Trade and the Sri Lanka Institute of Economics and International Trade.
Was SLSFTA a “Cleverly negotiated Free Trade Agreement” as stated by the (former) Minister of Development Strategies and International Trade Malik Samarawickrama during the Parliamentary Debate on the SLSFTA in July 2018, or a colossal blunder covered up with lies, false promises, and fairy tales? After SLSFTA was signed there were a number of fairy tales published on this agreement by the Ministry of Development Strategies and International, Institute of Policy Studies, and others.
However, for this article, I would like to limit my comments to the speech by Minister Samarawickrama during the Parliamentary Debate, and the two most important areas in the agreement which were covered up with lies, fairy tales, and false promises, namely: revenue loss for Sri Lanka and Investment from Singapore. On the other important area, “Waste products dumping” I do not want to comment here as I have written extensively on the issue.
1. The revenue loss
During the Parliamentary Debate in July 2018, Minister Samarawickrama stated “…. let me reiterate that this FTA with Singapore has been very cleverly negotiated by us…. The liberalisation programme under this FTA has been carefully designed to have the least impact on domestic industry and revenue collection. We have included all revenue sensitive items in the negative list of items which will not be subject to removal of tariff. Therefore, 97.8% revenue from Customs duty is protected. Our tariff liberalisation will take place over a period of 12-15 years! In fact, the revenue earned through tariffs on goods imported from Singapore last year was Rs. 35 billion.
The revenue loss for over the next 15 years due to the FTA is only Rs. 733 million– which when annualised, on average, is just Rs. 51 million. That is just 0.14% per year! So anyone who claims the Singapore FTA causes revenue loss to the Government cannot do basic arithmetic! Mr. Speaker, in conclusion, I call on my fellow members of this House – don’t mislead the public with baseless criticism that is not grounded in facts. Don’t look at petty politics and use these issues for your own political survival.”
I was surprised to read the minister’s speech because an article published in January 2018 in “The Straits Times“, based on information released by the Singaporean Negotiators stated, “…. With the FTA, tariff savings for Singapore exports are estimated to hit $10 million annually“.
As the annual tariff savings (that is the revenue loss for Sri Lanka) calculated by the Singaporean Negotiators, Singaporean $ 10 million (Sri Lankan rupees 1,200 million in 2018) was way above the rupees’ 733 million revenue loss for 15 years estimated by the Sri Lankan negotiators, it was clear to any observer that one of the parties to the agreement had not done the basic arithmetic!
Six years later, according to a report published by “The Morning” newspaper, speaking at the Committee on Public Finance (COPF) on 7th May 2024, Mr Samarawickrama’s chief trade negotiator K.J. Weerasinghehad had admitted “…. that forecasted revenue loss for the Government of Sri Lanka through the Singapore FTA is Rs. 450 million in 2023 and Rs. 1.3 billion in 2024.”
If these numbers are correct, as tariff liberalisation under the SLSFTA has just started, we will pass Rs 2 billion very soon. Then, the question is how Sri Lanka’s trade negotiators made such a colossal blunder. Didn’t they do their basic arithmetic? If they didn’t know how to do basic arithmetic they should have at least done their basic readings. For example, the headline of the article published in The Straits Times in January 2018 was “Singapore, Sri Lanka sign FTA, annual savings of $10m expected”.
Anyway, as Sri Lanka’s chief negotiator reiterated at the COPF meeting that “…. since 99% of the tariffs in Singapore have zero rates of duty, Sri Lanka has agreed on 80% tariff liberalisation over a period of 15 years while expecting Singapore investments to address the imbalance in trade,” let’s turn towards investment.
Investment from Singapore
In July 2018, speaking during the Parliamentary Debate on the FTA this is what Minister Malik Samarawickrama stated on investment from Singapore, “Already, thanks to this FTA, in just the past two-and-a-half months since the agreement came into effect we have received a proposal from Singapore for investment amounting to $ 14.8 billion in an oil refinery for export of petroleum products. In addition, we have proposals for a steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million), sugar refinery ($ 200 million). This adds up to more than $ 16.05 billion in the pipeline on these projects alone.
And all of these projects will create thousands of more jobs for our people. In principle approval has already been granted by the BOI and the investors are awaiting the release of land the environmental approvals to commence the project.
I request the Opposition and those with vested interests to change their narrow-minded thinking and join us to develop our country. We must always look at what is best for the whole community, not just the few who may oppose. We owe it to our people to courageously take decisions that will change their lives for the better.”
According to the media report I quoted earlier, speaking at the Committee on Public Finance (COPF) Chief Negotiator Weerasinghe has admitted that Sri Lanka was not happy with overall Singapore investments that have come in the past few years in return for the trade liberalisation under the Singapore-Sri Lanka Free Trade Agreement. He has added that between 2021 and 2023 the total investment from Singapore had been around $162 million!
What happened to those projects worth $16 billion negotiated, thanks to the SLSFTA, in just the two-and-a-half months after the agreement came into effect and approved by the BOI? I do not know about the steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million) and sugar refinery ($ 200 million).
However, story of the multibillion-dollar investment in the Petroleum Refinery unfolded in a manner that would qualify it as the best fairy tale with false promises presented by our politicians and the officials, prior to 2019 elections.
Though many Sri Lankans got to know, through the media which repeatedly highlighted a plethora of issues surrounding the project and the questionable credentials of the Singaporean investor, the construction work on the Mirrijiwela Oil Refinery along with the cement factory began on the24th of March 2019 with a bang and Minister Ranil Wickremesinghe and his ministers along with the foreign and local dignitaries laid the foundation stones.
That was few months before the 2019 Presidential elections. Inaugurating the construction work Prime Minister Ranil Wickremesinghe said the projects will create thousands of job opportunities in the area and surrounding districts.
The oil refinery, which was to be built over 200 acres of land, with the capacity to refine 200,000 barrels of crude oil per day, was to generate US$7 billion of exports and create 1,500 direct and 3,000 indirect jobs. The construction of the refinery was to be completed in 44 months. Four years later, in August 2023 the Cabinet of Ministers approved the proposal presented by President Ranil Wickremesinghe to cancel the agreement with the investors of the refinery as the project has not been implemented! Can they explain to the country how much money was wasted to produce that fairy tale?
It is obvious that the President, ministers, and officials had made huge blunders and had deliberately misled the public and the parliament on the revenue loss and potential investment from SLSFTA with fairy tales and false promises.
As the president himself said, a country cannot be developed by making false promises or with fairy tales and these false promises and fairy tales had bankrupted the country. “Unfortunately, many segments of the population have not come to realize this yet”.
(The writer, a specialist and an activist on trade and development issues . )
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