CHAPTER VI

FINDINGS AND SUGGESTIONS

6.1 The Study in Retrospect

6.2 Findings of the Study

6.5 Suggestions

6.6 Conclusion

6.7 Researchers Contribution

6.8 Scope for Further Research

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6.1 The study in retrospect

The research work entitled Tea plantations in Kerala A study with

special reference to abandonment, closure and rehabilitation packages was

carried out in the context of abandonment and/or closure of the tea plantations

during 2000 to 2007. Kerala state cultivates all the four major plantation crops

in an extensive manner and the climate of the state is highly conducive for the

cultivation of such crops. As far as tea is concerned, seven districts are engaged

in the cultivation. But the lion share of the tea cultivation is in the hands of two

districts viz., Idukki and Wayanad (84 percent share of the cultivation). The tea

is cultivated in those lands that cannot normally be used for the cultivation of

other crops. Here lies the importance of tea cultivation in Kerala especially in

Idukki and Wayanad districts. The people in these regions are highly depending

upon the tea plantations for their livelihood directly or indirectly. More over

these tea labourers belong to Dalits or adivasies or Tamil minorities. The

owners of the tea plantations in our state find it difficult to run the plantations

by making a balance between the cost and revenue. Because of the old aged tea

bushes over 70 years. The productive age of a tea bush ends at its 30 years. The

Government of India had introduced the SPTF during the 11th plan period to

provide financial assistance to the tea plantations for replanting and

rejuvenating the old aged tea bushes. The other matter of concern is the

increased cost of production of which the lion share is in the form of labour
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cost. The labourers depend upon the plantations for satisfying all their basic

needs since they are land less and migrant. In this context the researcher has

made an attempt to analyze the profile of the tea plantations and its labourers,

the causes and consequences of abandonment and/or closure during 2000 to

2007, the efficacy of SPTF as a scheme of replantation and rejuvenation of old

aged tea bushes during the 11th plan period, the functions of the tea plantations

before and after the abandonment and/or closure and the socio-economic

position of the tea plantation labourers before and after the abandonment and/or

closure.

The scrutiny of the available literature has showed that many studies

have been conducted about tea plantations and its various dimensions. But the

studies about the tea plantations and its labourers in Kerala are very limited

especially in the context of abandonment and/or closure, SPTF and functions of

tea plantations. Hence the researcher in the present study has made an attempt to

fill such research gap.

The required data is collected from both secondary and primary sources.

The secondary data is collected mainly from journals and official publications.

However, the books and websites are also referred for getting the secondary

data. The primary data are collected from 65 managers and 380 sample

labourers statistically selected using stratified random sampling technique.

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The analyses of the data were done in seven different sections viz.,

general profile analysis, causes of abandonment and/or closure, consequences of

abandonment and/or closure, evaluation of SPTF, functions of the plantations

before and after the abandonment and/or closure, socio-economic position of

the plantations before and after the abandonment and/or closure and testing of

the research hypotheses.

The tools used for analysis were simple percentages, means, cross

tabulation, t tests (all the three types), One way analysis of variance, Chi-square

test, Garret ranking technique, Factor analysis, Canonical Discriminant function

analysis. Most of the analyses were done through the computer software,

Statistical Package for Social Sciences (SPSS version 17.0).

6.2 Findings of the study

6.2.1. Profile of the plantations

Seventy three per cent of the plantations are company form of

establishments with a tea area less than 100 hectares. 75.4 percent have its own

tea factory and the majority uses modern technology in it. Most of the

plantations make low level value addition only and the reported reason for the

same is technical problems. The financial investment of the majority is less than

50 crores and is using debt fund (90.8 per cent) along with equity. Most of the

plantations are made delay in debt service and the reported reason is increased

cost of production. Only 16.9 per cent of the managers possess master degree in
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business administration. The experience of the managers ranges in between five

to ten years.

6.2.2 Profile of the Labourers

Majority (65) percent of the labourers belong to the age category of

above 45 years old. Majority of them have primary level education and 30 per

cent have no formal education. 60 per cent of them are residing in the labour

quarters. From among those residing in own house, majority (87.5 percent)

have received government financial assistance to construct it. 80 per cent of the

labourers have no government primary health center in their locality.

Majority of the labourers have work experience in between 20 to 30

years and engage in the field operations including tea leaf plucking. 55 per cent

of the labourers have health problems of which 54.55 per cent suffer from

shoulder pain and 18.18 per cent from Asthma. The Chi-square test showed that

there is an association between the nature of work and health problems. Only 60

per cent labourers have at least partial awareness about the legal labour welfare

measures to be provided to them.

Most of the labourers (85 per cent) have financial debt and the source of

debt is private money landers. Only 30 percent of the labourers have other

income and the sources for the same are outside work. The household income of

the majority ranges in between Rs.400 and Rs.500 per day. Only 45 per cent

own house or house property. Their savings is in the form of life insurance, gold
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ornaments, provident fund, bank deposit and chits or curies. Majority of the

labourers have television set and mobile phones but a meager percent have other

household equipment.

6.2.3 Causes of abandonment and/or closure

1. The mean score analysis shows that ten variables are the dominant

causes of abandonment and/or closure. Out of these ten variables, three

are external and non-promotional agencies related. They are (i)

unrestricted import, (ii) fall in prices and (iii) increased cost of

production. The rest of the seven variables are internal. They are (i) lack

of professional management, (ii) lack of interest to run the plantations,

(iii) lower productivity, (iv) poor financial performance, (v) lack of

value addition, (vi) lack of product diversification and (vii) pending P.F

contribution. It means that the prevailed managerial inefficiency coupled

with external factors was led to the abandonment and/or closure.

2. The six factors identified through the factor analysis are (i) inadequate

policies and support, (ii) lack of control and lower productivity, (iii) lack

of interest to run the plantations, (iv) demand of the labourers, (v)

managerial inefficiency, and (vi) increased cost and lack of value

addition. These six variables together explain 70.294 per cent of

variation.
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3. The most dominant factors of abandonment and/or closure are (i) lack of

interest to run the plantations, (ii) inadequate policies and support and

(iii) managerial inefficiency. The plantations differ significantly status-

wise in their opinion on two factors. They are (i) inadequate policies and

support and (ii) lack of interest to run the plantations. The managers of

the closed plantations opined that inadequate policies and support is

one among the causes but the non-closed plantations do not think so.

However the non-closed plantations believe that lack of interest to run

the plantations is one among the causes.

4. The structure matrix of the discriminant function analysis shows that the

most discriminating factors of abandonment and/or closure are lack of

interest to run the plantations, inadequate policies and support and

managerial inefficiency.

6.2.4 Consequences of abandonment and/or closure

1. As per the opinion of the plantations and employees the most dominant

consequences are (i) loss of job and regular income, (ii) no water,

electricity and maintenance of the labour quarters, (iii) savings in

variable expenses by the plantations, (iv) no medical health care

facilities to the employees, (v) avoided immediate payment of various

dues by the plantations, (vi) no festival celebrations by the employees,

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and (vii) got waiver of various payments and re-payments by the

plantations.

2. There is no much difference between the ranking of the managers and

employees. But the managers believe that they have gained savings in

variable expenses and the abandonment and/or closure of the plantations

had no effect on the festival celebration of the employees and vice versa.

3. There is no much difference between the rankings of the managers of the

closed and non-closed plantations. But the managers of the closed

plantations opine that heavy losses due to theft was a consequence and

no savings were made in variable expenses due to the stoppage of

production and vice versa.

4. There is no much difference between the ranking of the employees of

the closed and non-closed tea plantations. But the employees of the

closed plantations opined that stoppage of education of the children was

a consequence and loss of medical health care facilities was not a

consequence and vice versa.

6.2.5 Special Purpose Tea Fund (SPTF)

1. The actual physical achievement for re-plantation is only 77.38 percent

of the target fixed and for the rejuvenation is 80.84 per cent of the target

fixed.
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2. The actual financial achievement of the financial subsidy was more than

the target fixed during the first four years of the eleventh plan period.

But the same has 28.05 percent less than the target fixed for the last year

of the eleventh plan period. The total achievement of the financial

subsidy is 91.45 percent.

3. 98.44 percent of the sample plantations are not availed the special

purpose tea fund loan and the special purpose subsidy is availed by

46.15 per cent of the tea plantations. It means that only 46.15 percent

plantations are engaging in the re-plantation and rejuvenation activities.

4. The dominant reasons for not availing the SPTF loan are (i) eligibility

conditions, (ii) high rate of interest, (iii) loss of revenue due to long

gestation period, (iv) no margin money, (v) lengthy documentation, (vi)

uncertainty about the lease tenure and (vii) ban on usage of earth

excavators. There are differences of opinion between the managers of

the closed and non-closed tea plantations about the reasons for not

availing the SPTF.

5. The one sample t-test shows that the responses of the managers about

the benefits of the SPTF are less than the average and the defects of

SPTF are high. Hence it can be interpreted that the defects are more as

compared with its benefits.

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6.2.6 Functions of the plantations before and after the abandonment and/or
closure

6.2.6.1 Working capital position

1. There is significant difference between the working capital position of

the closed plantations before and after the abandonment and/or closure.

The working capital position of the closed plantations is improved after

abandonment and/or closure. This is because of the improvement in tea

prices and tea revenue.

2. The plantations differ significantly status-wise as regards the working

capital positions before abandonment and/or closure. The working

capital position of the non-closed plantations is comparatively better.

6.2.6.2 Operating position

1. There is significant difference between the operating position of the

closed and non-closed plantations before and after the abandonment

and/or closure. The operating position of the plantations is improved

after the abandonment and/or closure. But the labour operating position

is bad, especially for closed plantations, after the abandonment and/or

closure. This is because of the fact that the closed plantations are facing

acute labour shortage after the abandonment and/or closure. The

labourers went for work outside the plantations has not returned back

when the plantations reopened and the reported reason for this is low
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wages and insecurity of the plantation job. However, the field

operations, cost reduction measures, debt service and profitability are

improved after the abandonment and closure. The reported reasons are

increased mechanization and cost reduction measures coupled with

increased tea prices.

2. The plantations differ significantly status-wise as regards the operating

position before the abandonment and/or closure. The performance of the

non-closed tea plantations is comparatively better.

6.2.6.3 Labour welfare measures

1. There is significant difference between the labour welfare measures of

the closed plantations before and after the abandonment and/or closure.

No such differences are there as in case of non-closed plantations. The

labour welfare measures of the closed plantations are bad after the

abandonment and/or closure. Because they are making the prompt

payment only on the wages. But making compromise on the labour

welfare measures. This may be due to the fact that the penalty for not

implementing the measures is less than that of the cost of implementing

it in the plantations. More over lack of interest is also there.

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2. The plantations differ significantly status wise as regards the labour

welfare measures after the abandonment and/or closure. The

performance of the non-closed plantations is better in the

implementation of the legal labour welfare measures.

6.2.6.4 Working conditions

1. There is significant difference between the working conditions of the

closed and non-closed plantations before and after the abandonment

and/or closure. As far as the closed plantations are concerned, there is an

increase in the ratio of workers over 50 years old, productivity, average

age of tea bushes and total costs after the abandonment and/or closure.

But regarding the non-closed plantations, the land labour ratio and the

percentage of workers over 50 years old are reduced after the

abandonment and/or closure. But there is an increase in the average age

of tea bushes and total costs.

2. The plantations differ significantly status wise as regards the working

conditions after the abandonment and/or closure. The land labour ratio is

low and the percentage of workers over 50 years old is high for the

closed plantations.
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6.2.7 Socio-economic position of the labourers before and after the

abandonment and/or closure

1. There is significant difference between the socio-economic position of

the labourers before and after the abandonment and/or closure. As far as

the labourers of the non-closed plantations are concerned, the Mean

value reveals that the (i) educational standard, (ii) standard of living, (iii)

income, (iv) debt, (v) ownership of house/house property and (vi)

ownership of other financial assets of the labourers household have

increased after the abandonment and/or closure. But there is a

considerable reduction in the savings of the labourers after the

abandonment and/or closure.

2. As far as the labourers of the closed plantations are concerned, the mean

value reveals that the positions of the labourers are improved after the

abandonment and/or closure as regards the (i) educational standard, (ii)

standard of living and (iii) income of the labourer household. But the

household savings is reduced after the abandonment and/or closure.

However there is no significant difference between the socio-economic

position of such labourers (i) household debt (ii) ownership of

house/house property and (iii) ownership of other financial assets.

3. The socio-economic position of the labourers differ significantly

residence wise and status wise. As far as the educational standard is

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concerned, the labourers of the non-closed plantations residing in the

own house have a family with better educational standard. This is due to

the fact that there is no dislocation in the education of their children as

they get regular wages even when it is smaller.

4. As far as the standard of living is concerned, it is better for the labourers

of the non-closed plantations. But the labourers do not differ

significantly residence wise as regards the standard of living.

5. As far as the household income is concerned, labourers of the closed

plantations residing in the labour quarters have better household income.

This is because that the fact they had not any other options rather than

finding work outside the plantations. So they found work outside and

earned better wages.

6. The household savings of the labourers residing in own house was better

before abandonment and/or closure. But the situation has changed and

the labourers residing in the labour quarters have better savings after the

abandonment and/or closure. The household savings of the labourers of

the non-closed plantations were better before abandonment and/or

closure but the household savings of the labourers of the closed

plantations have better savings after the abandonment and/or closure.

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7. Regarding the household debt, the labourers of the closed plantations

residing in own house have comparatively high household debt.

8. As far as the ownership of the house property is concerned, the labourers

of the closed plantations residing in own house had got increased

ownership before abandonment and/or closure. But the labourers of the

closed plantations residing in the labour quarters have increased

ownership after the abandonment and/or closure.

9. As far as the ownership of other financial assets is concerned, the

ownership of the labourers of the non-closed plantations was high before

abandonment and/or closure but the situation has changed after the

abandonment and/or closure. Now the labourers of the closed plantations

have increased ownership of other financial assets.

6.3 Suggestions

6.3.1 Suggestions to the promotional agencies (especially to the

government)

1. The main reasons for abandonment and /or closure are fall in prices and

increased cost of production. Regions in the high ranges (Idukki district)

are highly suitable for orthodox tea manufacture which commands

premium price globally. If the government is to encourage the

production of orthodox tea by giving various subsidies and incentives, it

will really help to increase the tea prices. In addition, the promotion of
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domestic per capita consumption of tea as a health drink will result in

dramatic effect on the price levels. This would be a standing solution for

remunerative prices of tea and to eliminate fall in tea prices.

2. The plantations are to maintain many records as per the provisions of

various law and send it to various government and non-government

departments like tea board, labour office, inspector of plantations,

UPASI, registrar of companies etc. It would be better if the plantations

can submit all these reports and records through online and in a single

gateway. This will reduce the cost.

3. The study reveals that there are chances to the industry which has been

in a crisis in the recent past may further become uncompetitive if it

continue to bear the social costs fully as the labour cost forms major

portion of the cost of manufacturing tea. There should be a partnership

between the government and the plantations management on the

sharing of the social cost. The employer should give fair wages and

ensure security at the work place and at the same time the government

should take care of the health and sanitation of the employees and

education of their children.

4. There is a need to revise the Plantation Labour Act, 1951 where several

welfare measures were made mandatory when the life in the hilly

terrains were difficult years ago. But the conditions of the life and life
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style in those regions are changed now and the government is doing

many things for the development of the people in the hilly regions.

Furthermore, the penalty for not implementing the labour welfare

measures asper the Act is only Rs.250 per month. This cost is very less

than that of the cost of implementing it in the plantations. Hence there is

a need to revise the Act by the government.

5. The labour quarters are to be repaired or constructed by the government

at its cost by getting consent in this regard from the management. This

will also result in the reduction of the cost.

6. Mechanization in the field and factory will also reduce the cost of

manufacturing tea. But the investment in machineries is high. It would

have been a boon to the plantations if the government would have given

some subsidy in this respect.

7. There is a problem with the mechanization in the tea leaf plucking.

Because, the traditional up and down planting is not supportive of the

mechanized plucking. Hence there is a need for replanting with contour

planting method. This will increase the productivity too.

8. The special purpose tea fund should be made much more effective to

enhance the re-plantation activities. The subsidy of the SPTF is to be

revised time to time by considering the unit cost of re-plantation or

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rejuvenation and the time value of money. The lengthy documentation

procedure and restriction on irrigation are also to be resolved.

9. The plantations are to get no due certificate from the provident fund

department and should have an UPASI membership to get SPTF loan.

As far as the closed tea plantations are concerned, they all had made

default in the PF contribution. Hence they are not in a position to avail

the SPTF loan. Such a condition in the SPTF is to be relaxed so that they

can get the loan. More over the rate of interest is comparatively high as

compared with the rate of interest of the loan giving by the banks of the

plantation locality. Such rate is to be reduced to a considerable extent to

get the desired result of the SPTF.

10. Loss of medical health care was a consequence of the abandonment and

closure. Two options are there to eliminate such an incidence in future.

One is to open primary health centers in the labourer locality. The other

is supply essential medicines with the service of medical officer through

the estate hospitals in time of need especially when any default is made

by the estate management to run the estate hospital.

11. The land labour ratio of the plantations is very low. It means the

plantations are facing acute labourer shortage. This problem can be

tackled in three ways. The first option is to bring the plantation work

under the scheme of Mahatma Gandhi National Rural Employment

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Scheme. So that the field operations of the plantations can be done with

the labourers of MGNRE. The second option is to make the wages equal

to the wages of other works in the labourer locality. This can be done by

relieving the management from the responsibility of bearing the social

cost. As a result, the management will get sufficient labourers. Moreover

the new generation is not coming into the field of plantation work due to

low wages. If the wage is increased they will also participate in the

plantations work. This will lead to an increase in the labour productivity

since the majority of the labourers who are participating in the plantation

work are the older generation over 45 years old. The third option is the

mechanization in the field operations.

6.3.2 Suggestions to the management

1. Lack of interest to run the plantation is one among the causes of

abandonment and/or closure and the lower productivity in the

plantations. This is why they are not making any further investment in

the plantations. They are eating away the profit earning from the

business or they are diverting the profit into some other business. The

result is the lower productivity and profitability. This mind set of the

management is to be changed. They are to invest a portion of the profit

into the business so that they can sustain.

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2. Many of the managers of the plantations do not possess their master

degree in business administration. It means these plantations are lacking

professional competence in their management. The result is inefficiency

in management and poor financial performance. This situation is to be

changed.

3. The age of tea bushes in the sample plantations is above seventy years. It

means our tea bushes are old aged one and surpassed the productive age.

It is to be noted that the productive age of a tea bushes ends at its 30

years. These tea bushes are to be re-planted at the earliest. If a certain

percentages of the tea bushes are re-planted every year, it will lead to a

reduction in the supply of the made tea. This will result in increased

price and at the same time we can increase the productivity too.

4. One of the plantations is invited its employees to participate in the

capital and management and such plantation is running smoothly with

employee co-partnership. Such an initiative is to be adopted by all the

plantations if possible. It will change the mindset of the labourers and

they will work hard and dedicate more to achieve better result. The

result will be efficiency in operations and performance.

5. Through the personal observation, the researcher could identify that

many of the managers in the plantations are deploying six to eight estate

labourers in their home (quarters) for housekeeping and other allied

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services. But the wage is given at the cost of the owners. This will also

lead to increased labour cost and the result is also a managerial

inefficiency. Here the owners should ensure that there are no such

practices in existence.

6. Some of the plantations are deliberately withdrawing the labour welfare

measures as they realized that the penalty for not implementing the legal

labour welfare measures is only Rs.250 per year which is much less than

the cost of implementing the legal labour welfare measures. Such mind

set is to be avoided since the labourers are considered as the backbone of

the plantations.

6.3.2 Suggestions to the employees

1. The labourers should realize the situation of the plantations before they

demand for any extra bonus or other allowances. The trade union can

play a big role in making the labourers understand about the things that

are happening in the management.

2. The researcher could personally see that some of the lazy labourers are

taking rest during the working hours after attaining the required quantity

even if they have the ability to attain extra. These practices should be

avoided and they have to cooperate with the management to achieve the

common goal. Increased output means increased efficiency and

ultimately increased performance. If the plantations could show an

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increased performance by way of profit, these labourers can also get a

portion of it as bonus.

6.4 Conclusion

In a nutshell, the study concluded that increased cost of production, fall

in tea prices and lower productivity were the major reasons behind the

abandonment and/or closure. The governments initiative to introduce SPTF as

a measure to increase productivity is quite appreciable. However the scheme is

not achieved the desired result due to high rate of interest and lengthy

documentation procedure. The subsidy component of the scheme should be

enhanced by considering the unit cost of replantation. The functions of the

reopened plantations are comparatively poor as compared with the non-closed

plantations. Lack of interest to run the plantation was one among the observed

reasons behind this. This inclination of the management is to be changed to

achieve the desired sustainable growth of this sector.

6.5 Researchers contribution

No specific study has been conducted so far to examine the causes and

consequences of abandonment and/or closure, the efficacy of special purpose

tea fund, the functions of the plantations before and after the abandonment

and/or closure and the socio-economic position of the tea labourers before and

after the abandonment and /or closure. The findings and suggestions especially

those related with the special purpose tea fund and the functions of the
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plantations are considered as the contribution of the researcher. The findings

and suggestions of the present study will be really helpful to the policy makers

and the plantations (i.e., owners) to formulate suitable policies and to make

decisions.

6.6 Scope for further research

A comparison of the functions of the plantations not running with

employee co-partnership with those plantations running with employee co-

partnership will bring out the differences if any between its functions and pros

and cons of running the plantations with employee co-partnership

The study on the problems and prospects of value addition in tea can

also help the policy makers to identify the areas to be given much concentration

or importance.

A study on the problems facing by the plantations in Peermade Taluk is

also an essential one as this Taluk has got 62 plantations and all these

plantations are running by the small companies, sole proprietors or partnerships.

The problems and prospects of tea plantation labourers in Kerala and a

study on the financial assistance available to tea plantation labourers can also be

studied.
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A study on the problems and prospects of small tea growers in Kerala

and the channel efficiency in the marketing of tea by small tea growers in

Kerala can also be made.

The role of promotional agencies in the smooth functioning of the tea

plantations in Kerala will also bring out the area to be given much

concentration.