Sri Lanka’s tea industry faces crisis amid wage hike and tough conditions for workers
Tea is central to the country’s economy, bringing in more than $1 billion a year and accounting for about 11 per cent of the country’s exports.
In 2021 alone, Australia imported $30 million worth of tea from Sri Lanka, roughly 33% its total tea consumption, according to UN Comtrade.
But Sri Lanka’s tea industry finds itself at a crossroad.
Three years ago, the government abruptly banned chemical fertilisers and pesticides, causing production to plummet by 18 per cent — a decision many now consider disastrous.
And in May this year, the government ordered a 70 per cent increase to plantation workers’ minimum wage, a move intended to improve their living standards.
Before Sri Lanka became synonymous with tea, coffee dominated the island’s central highlands.
That started to change under British rule in the 1820s, when the first tea plant was brought to the island.
After the first export of tea received the seal of approval from English tea sippers, cultivation expanded rapidly.
Soon, Ceylon tea, which refers to tea produced in the highlands of Sri Lanka, gained an international reputation, and by 1962, the country had become the world’s largest exporter of tea.
But the British quickly faced a problem: neither the local Sinhalese population nor the Tamils in northern Jaffna were willing to do the backbreaking work of picking tea.
To fill the labour gap, the British imported Indian Tamils who worked for a small fee or no pay in exchange for their passage to Sri Lanka.
Bound by contract, the workers lived in isolation on remote plantations with poor infrastructure.
Tea pickers are required to harvest 18 kilograms of green tea leaves each day to earn the minimum wage, which increased by 70 per cent from 1,000 rupees ($5) to 1,700 rupees ($8.50) in May.
While this wage hike was intended to support workers, industry leaders argue it was implemented recklessly, without enough consultation.
