Plantation wage hike accelerates struggling rubber sector collapse: Industry

By Nishel Fernando

A top industry leader warned that the recent arbitrary wage hike to plantation workers would accelerate the collapse of Sri Lanka’s struggling rubber sector.

Sri Lanka’s natural tuber output declined by 60 percent over the last decade to mere 64,400 tons last year, Colombo Rubber Traders Association (CRTA) Immediate Past President Manoj Udugampola said. 
Similarly, the total rubber plantation land extent has come down to 98,000 hectares from 138,000 hectares. “Last year, the Rubber Development Department conducted a fresh survey, and according to it we have only 98,250 hectares. Out of that 98,000 hectares 10,000 hectares, around 10 percent of the total extent in the country is mostly kept abandoned by the smallholders,” Udugampola elaborated. Over the last few years, leaf fall disease caused by Pestalotiopsis which re-emerged during  the short-lived blanket ban on agrochemical imports brought a devastating impact to the country’s rubber plantations.  Udugampola noted that rubber planters are already incurring a Rs.200 loss to produce one kilo of rubber. “With the new wage hike, the net loss per kilo will increase to Rs. 380, which threatens the very survival of the industry,” he added. As per the new wage hike mandated by the government through the Wages Board, the minimum wage to rubber workers is to be increased by 74 percent to Rs. 1,902 including the Employee Provident Fund (EPF) contributions.

Accordingly, he noted that, the cost of production would rise by 20 percent, in adding further pressure on rubber planters who are already in severe crisis. In particular, he noted that Regional Plantation Companies (RPCs), which manage about 30 percent of Sri Lanka’s rubber production and land extent, accounting for a similar output in natural rubber, are struggling to generate revenue to pay wages to workers. However, he noted that RPCs continue to maintain rubber estates despite recording losses.