Sri Lanka supplies most of Australia’s tea, but its industry is now at a crossroad

It’s 8am and there is sleeting rain — miserable conditions to be outside, let alone work in Sri Lanka’s tea fields.

But for Sagunthla, a mother of two, it’s just another day.

She wraps a plastic sheet over her head, ties a hessian sack on her back, and steps out into the cold to walk to the fields.

“Look at my hands,” she says, thrusting them toward me.

Her fingers are a web of fine cuts — like paper cuts but deeper.

“This is very hard work,” she says, readjusting the strap of her basket.

Sagunthla is one of many Tamil women who make up the backbone of Sri Lanka’s tea industry.

The industry employs about 700,000 labourers — primarily women — most of whom work in the lush but gruelling highlands surrounding Nuwara Eliya in central Sri Lanka.

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 per cent of 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.

But plantation owners are struggling to balance profitability with demands for better pay.

Experts say drastic reforms are needed to keep the industry alive, and to improve conditions for workers like Sagunthla.

The human cost of tea

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.

Pickers today say the patriarchal work system that was in place during those colonial times has continued mostly unchanged.

Male supervisors oversee the largely female workforce, dictating their daily tasks and enforcing strict quotas, often with little regard for the physical toll endured by the women.

Workers say conditions have hardly improved over the past five decades.

They live in cramped “line houses” — one-room quarters where they cook, sleep, and raise their families in the same space.

Muttamha, 59, has worked in the fields her whole life and finds the physical toll particularly grim during monsoon season.

“The leeches are the worst,” she says.

“We work all day, then go home to cook for our families. It’s too tough.”

Balancing wage increase with sustainability

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.

Roshan Rajadurai, chair of the Planters’ Association of Ceylon, says the move is unsustainable, given rising production costs and a struggling economy.

The ongoing financial crisis meant farmers had to pay more for fuel and power.

“We’re not against wage increases, but they need to be tied to productivity,” Mr Rajadurai said.

He is advocating for a more measured 35 per cent wage increase, because Sri Lanka’s tea industry is struggling with lower productivity and higher labour costs compared to competitors such as India and Kenya.

Industry experts say a low uptake of new technology, slow growth in production, increasing labour scarcity, and skills deficits have resulted in low productivity. 

Dilhan Fernando, chairman of Dilmah Ceylon Tea Company, acknowledges the need for improved wages and conditions, but stresses that sudden, drastic wage hikes threatens the industry’s profitability.

“The government is vilifying plantation companies, but the reality is, it’s a choice between survival and sustainability [or not],” Mr Fernando tells the ABC.

He says consumers and supermarket retailers need to be prepared to pay higher prices for tea.

Mr Fernando also criticised smear narratives that claim all producers are bad, pointing to climate initiatives such as using biochar — a form of processed plant matter used to help grow crops — and an agroforestry model for soil regeneration that have been introduced by several estates.

He says during the pandemic, many estate owners such as Dilmah also built hospitals in isolated areas to provide urgent care.

“We want to increase sustainability and show socially conscious consumers how we support workers, from green initiatives to a program for young mothers,” Mr Fernando says.

“But we face constant pressure from a colonial economic system that demands low prices.

“We can’t survive in a race to the bottom.”

Innovative models for the future

In an industry with a long history of worker exploitation, a few pioneers are shaking up conditions with bold initiatives.

Amba Estate, a 26-acre tea plantation near Ella, provides workers with essential gear including boots, leech socks, and raincoats.

And instead of a traditional seven-hour work day, workers’ hours are determined by how long it takes them to pick the best new tea leaves and collectively sort through and process their harvest.

On a typical day, workers spend a few hours plucking tea, weighing their hauls in the measuring room, logging the flavour profiles, and spreading the leaves to dry.

The estate uses modern technology and a simple drying set-up, replacing colonial-era machinery to make the process quicker and more accessible.

They also have a 10 per cent revenue-sharing scheme, which supplements workers’ monthly base salary.

“We pay out the revenue share whether we’re profitable or not,” Amba Estate owner Simon Bell tells the ABC.

He says it has resulted in higher-quality tea, produced by workers who feel a sense of pride and ownership in what they produce.

Jesmine Fernando, an accounts manager at Amba Estate, says at some tea estates women are paid less than men despite working more hours.

“But here, everybody has the same hours, we work together and get paid equally.”

Other estates are also following suit and shaking up their approach.

Some have implemented productivity-based models that reward workers for hitting their targets, rather than set hours per day.

Once workers pluck the set target, they can finish their work day.

It’s a market-driven system aimed at incentivising efficiency and improving conditions.

Despite the success stories, Mr Rajadurai from the planters’ association says many tea estate owners have a stubborn mindset.

“Even when we show them the evidence, people are hesitant to try something new,” he says.

Many in the industry are calling for diversification into tourism or alternative crops, such as less labour-intensive coffee, to stay afloat.

“If the industry doesn’t change now it will be a slow, sure death,” Mr Rajadurai says.

Workers shortage and upskilling for the future

Another challenge is finding workers.

Many tea pickers’ children show little interest in following their parents into the fields, preferring instead to seek other job opportunities. 

NGOs like Tealeaf Trust are helping those children carve out futures beyond the harsh conditions of plantations.

Their programs, which have reached more than 3,000 Tamil youth, teach English and IT skills, and promote professional development.

For Yadharshi Selvaraj, the director of Tealeaf Trust and daughter of a tea picker, the mission is personal.

Reflecting on her own childhood, she recalls facing discrimination at school because of her family’s social status.

“I was never chosen for presentations because my shirt was always yellowed from the wood smoke we used to cook,” she said.

Today, she strives to empower Tamil children — especially girls — to pursue their dreams, encouraging them to break free from the cycle of poverty and exploitation faced by their community for generations.

“I want them to know they are not weak,” she said.

“They can do anything they want in life.”