Increasing productivity: A tool to mitigate adverse impacts of wage hikes on the performance of plantations

Abstract

Plantation workers are given a wage increase once in every two years following the collective agreement between the Plantation Management Companies and the relevant trade unions. This is necessary to ensure the services of the workers to the plantations by discouraging them moving into other sectors that may offer better daily wages and also to ensure them a comfortable life. However, wage increases will invariably increase the cost of production. Therefore, sustaining performance whilst accommodating such wage increases is a challenge the management has to face. This scenario demands the adoption of proper strategies aimed at keeping the cost of production at the lowest possible level. This is mandatory as the growers are unable to increase the selling price of their produce when the cost of production increases since the rubber prices as for any other commodity is determined elsewhere by the global supply and demand situation. This article is aimed at discussing strategies the growers could adopt to minimize their cost of production to mitigate increasing costs due to same in wages and other inputs.