Colombo Rubber Traders Association outlines dire situation amidst Govt.-mandated wage hike

Tuesday, 28 May 2024 02:30 -     - {{hitsCtrl.values.hits}}

  • CRTA Immediate Past President Manoj Udugampola details impact of 74% increase in minimum wage for rubber workers, now at Rs. 1,902 with EPF contributions included
  • Says new wage hike net loss per kilo will increase to Rs. 380, threatening industry’s survival
  • Asserts cost of production expected to rise by 20%, adding pressure on already struggling RPCs

Colombo Rubber Traders Association (CRTA) Immediate Past President Manoj Udugampola yesterday said the rubber industry now stands at a crossroad worse than the tea sector due to the recent Government-mandated wage hike.

Speaking at a joint press conference, he detailed the devastating impact of the 74% increase in the minimum wage for rubber workers, which now stands at Rs. 1,902 with Employee Provident Fund (EPF) contributions included.

“The current cost of production is Rs. 842 per kilogram, and we are already incurring a loss of Rs. 200 per kilo. With the new wage hike, the net loss per kilo will increase to Rs. 380, which threatens the very survival of the industry,” he lamented. Udugampola highlighted that the cost of production is set to rise by 20% due to the wage increase, putting additional pressure on rubber planters who are already facing severe setbacks. 

“The longer wait for crop cultivation, approximately six years, has further discouraged replanting efforts, leaving many plantations financially strained,” he added.

He said Regional Plantation Companies (RPCs), which manage about 30% of Sri Lanka’s rubber production and land extent, are struggling to generate a decent income compared to the wages paid to workers. 

Udugampola said the RPCs continue to manage their properties despite these financial losses, maintaining rubber plantations to preserve the industry. However, he warned that the 74% wage increase could be the breaking point for many plantations.

“The Government’s decision to raise wages without considering the financial viability of the industry is unsustainable,” he stressed.

He also said the high cost of production has also led many smallholders to abandon rubber cultivation in favour of other crops.

Citingstatistics he showed a troubling decline in the industry’s output. “In the last decade, rubber production has dropped by 60%, from over 152,000 tons to just 64,400 tons. In addition, the total rubber plantation land extent has shrunk from 138,000 acres to 98,000 acres of which 10% are currently abandoned by smallholders.”


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