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Monday June 3rd, 2024

65-75 pct of tea industry cost is min wage based labour cost: Sri Lanka think tank

Credits: International Labor Organization

ECONOMYNEXT – Around 65 percent to 75 percent of the cost at the green-leaf stage in regional plantation companies (RPCs) comes from the attendance-based minimum wage system, according to a report released by Advocata Institute, a think tank based in Colombo.

This contributes significantly to the cost of production of Sri Lanka’s tea industry.

The findings emphasise the need for RPCs, and the industry at large, to consider embracing alternative wage models such as the revenue share and outgrower models.

These suggestions are rooted in the context of grappling with soaring production costs, falling productivity, and the impact of the current wage structure on estate workers.

The report juxtaposes the minimum wage model with the more market-driven remuneration approaches observed in the smallholder sector.

It underscores how the attendance-based system, being predicated solely on attendance rather than performance, severely curtails “productivity incentives”.

One of the consequences of the minimum wage model is the persistent issue of low earnings and constrained earning potential for workers, ultimately leading to a labor shortage.

The report flags this shortage as an exacerbated problem, with workers increasingly veering away from agricultural labour, gravitating towards other employment options that offer higher compensation.

Stakeholders within the industry advocate for alternative wage models that lean towards rewarding productivity rather than mere attendance.

A proposed revenue share system departs from the weight-based remuneration of the outgrower model, and aligns workers’ incentives with quantity and quality of tea leaves produced.

This ensures that workers are motivated to prioritize quality, creating a sense of ownership and responsibility. It also drives them to adopt best practices in plucking and processing.

This effort aims at producing superior-grade tea, better market prices and increased competitiveness.

The report finds that the revenue share model comes with challenges; It requires a transparent mechanism for revenue calculation and distribution, presenting a potential administrative hurdle.

Moreover, negotiating fair revenue-sharing percentages that satisfy both workers and plantation owners can be subject to contextual nuances.

The report said that these proposed models draw inspiration from the market-driven ethos observed in the smallholder sector.

In this sector, workers are remunerated based on both the quantity and quality of their output, fostering higher productivity and a dignified approach to labour provision.

The report advocates for alternative, market-oriented wage models to uplift productivity, enhance worker welfare, and bolster the industry’s global competitiveness, in addressing the multifaceted challenges faced by large-scale tea plantations in the country. (Colombo/Dec28/2023)

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Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

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300 of 100,000 trees in Colombo considered high risk: state minister

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

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