‘Low productivity of land, labour and capital to blame’

Recently, a division bench of the Kerala High Court set aside an order of the Kerala government taking over 30,000 acres of land possessed by Harrisons Malayalam Ltd. (HML), a listed entity, under the Kerala Land Conservancy Act. C. Vinayaraghavan, president, HML, spoke about the perils of the plantation industry in Kerala. Excerpts:

Why is Kerala slowing down in the plantation business?

In the plantation industry, the single largest contributor to cost is labour and welfare costs. This contributes to almost 65% of the cost of production. The gap between the cost of production and price realisation is generally widening year-on-year in South India.

Lack of long-term policies or distorted policies since Independence has left this industry gasping for survival. Kerala has become a high-cost producer of plantation products. The reasons can be attributed to high cost of production, low productivity of land, labour and capital employed, outdated and archaic laws which prevent innovation and modernisation of the industry. The reasons for high cost of production are unrealistic taxation laws prevailing in the State, highest wages of the workforce, high cost of inputs, low productivity of manpower employed and cost increase due to various litigations and climate change.

What opportunities are other States offering?

In Kerala, there is a very rigid and regimented implementation of Kerala Land Reforms Act. As a result, when the commodity prices fall, increasing income from the land by adopting other means is not possible. Other States are encouraging activities to increase the revenue from unit area of plantations through value-addition of existing crops, inter-cropping of high value crops, introduction of the concept of integrated farming, ecotourism in plantations etc. All other plantation States in the country have done away with agricultural income tax and plantation tax etc. and encourage large scale replanting through policy support. Such initiatives have helped other competing plantation States to reduce the cost of production and increase their margins considerably.

Why is the governmentt taking time to formulate a policy for the sector?

From 1972 onwards, the State Governments, from time to time, have appointed different committees to study the issues plaguing the plantation industry. So far, there were nine committees and they have given their recommendations for sustaining the plantation industry in the State. There were several guidelines which form the basis for the plantation policy: The guiding principle for the plantation policy should be ‘Once a plantation should always a plantation.’ The policy should consider land as the integral part of any plantation activity. All ambiguities on title, ownership, rights should be clarified and settled through this policy. Further plantation should be considered as a driver for socio-economic development of stakeholders like workmen, growers and other communities in and around the plantations.

As the plantations arebeing located in the pristine and the fragile ecology of the Western Ghats, the policy should encourage conservation, preservation and uplift of the ecological conditions of the Western Ghats through sustainable agriculture. The policy should also encourage increase in the revenue and employment opportunities from unit area of plantation through different ecologically sustainable vocations and other activities like inter-cropping, integrated farming activities, harnessing of non-renewable energy sources, fruit processing etc.

The plantation industry in the State contributes to nearly 33% of agriculture GSDP (gross state domestic product) of the State and total turnover of the industry was nearly ₹21,000 crore in 2012-13 and approximately ₹9,000 crore in 2016-17. This industry employs around 3.5 lakh workers directly and nearly above a million workers both directly and indirectly together. Even though this industry is a major contributor to the State’s exchequer, there is no department in the State government to handle issues faced by the industry. Hence, the policy should recommend formation of a new plantation department.

At present, the industry is governed by archaic laws enacted in the 19th and 20th centuries. These laws have outlived their purpose and some have become detrimental to the very existence of the industry. Hence, land, labour [and] environmental laws governing plantations, should be revisited and codified to encourage sustainable, ecofriendly, labour-friendly, profit-oriented plantation activity.

How do you evaluate the labour situation? in the Kerala’s plantations?

The trade union and labour situations in the plantation industry have evolved over a period of time. The mMilitant trade unionism has given way to a participative, rational approach where all the stakeholders understand the importance of each other for collective existence. Even though the collective bargaining power of the trade unions in the industry holds the industry to ransom some times, in general, the cordial industrial relationships prevail in the industry.

The State is today facing an acute shortage of semi-skilled and unskilled labour. All the industries are dependent on migrant labour from Tamil Nadu or the north. In plantations also, availability of labour is becoming a serious issue. The shortage has resulted in giving up cultivation on marginal areas and restricting it only to those which are prime and highly productive.

What steps do you suggest to uplift this industry?

According to [noted agriculture scientist] Dr. M.S. Swaminathan, Kerala is the plantation State of India and it cultivates nearly 45% of the plantation crops cultivated in the country. This sector in the State needs changes at all levels through concerted action by all the stakeholders like growers, employees, trade unions, traders, researchers, government etc. For the plantation industry in the State of Kerala to survive, all out efforts are required from [all] the stakeholders to increase the returns from unit area of plantations considerably.

From being a commodity producer, this industry needs to move up the value chain so that there can be significant increase in the margin. The ill-effects of climate change are affecting the sector irreversibly.

The Kerala Land Reforms Act should be so modified to allow cultivation of crops such as pepper, cashew, oil palm, horticultural crops etc., in addition to the traditional crops — tea, coffee, cardamom, rubber and cocoa. This will also help in tiding over weather change. Inter-change between the existing plantation crops should also be considered.

The government should have a consistent policy with regard to ownership of land which would allow long-term investments in plantations, including FDI. Today, there is no security on ownership and hence, even banks seem to be reluctant to fund future development.

To strengthen the domestic market and retain the interest of growers in plantation crops or, generally in agriculture, the governments of India and Kerala should follow a policy of “Make In India — Grow In India.”

Anxious to increase manufacturing, various trade agreements were executed to bring in cheap raw materials like rubber and food items such as tea and pepper into the country. The latest is the attempt to import cup-lumps for manufacturing block rubber. Protection should be given to growers by ensuring import duties are maintained to prevent dumping of rubber and other crops in the country.