|Thursday, 5 September 2002|
Floriculture - an industry with potential
Export of floriculture products consists of cut flowers, cut leaves, live plants, tissue culture plants, flower bulbs and tubers.
In 2001 the industry earned the country over Rs. 750 million in foreign exchange, employed over 3,000 men and women from the semi urban and rural sectors and used over 1,000 acres of land productively to generate foreign exchange.
Countries such as Holland, Denmark, Japan, Korea, France, Australia, Germany, Saudi Arabia, UAE and Kuwait have been supplied with Sri Lankan flora over the years.
In spite of these figures, the Sri Lankan industry per se has dropped from the rank number 9 it had on exports to the European market to number 39 as of present. This drop could be attributed to two reasons:
* Expansion of the floriculture industry in Central America, Africa and East Asia
* Lack of resources for expanding the floriculture industry in Sri Lanka Unfortunately due to these reasons, Sri Lanka has become a non-significant exporter to Europe. If measures are not taken to revive the industry to its true potential, we are going to be non-competitive in the global market. Though successive governments have promised to support the industry, support has come only through moral intentions and not by any effective action. If not for a few exporters who have been using their own resources and working tirelessly to keep the industry afloat, this industry would have died a natural death many years ago. Despite the many difficulties the exporters are confronted, we believe that the following could be achieved.
* A turnover of Rs. 1,000 million in foreign exchange in 2004
* Create employment for over 1,000 from the semi-urban and rural sectors
* Use an additional 250 acres productively over the next three years
If the necessary support from the government is given to the industry, it will be possible to achieve the desired growth of 15% annually, which is the global growth in the floriculture industry. In order to achieve such results, the following issues should be addressed:
* Cost of finance for expansion: Possibly looking at 8% interest on secured loans for expansion. If the Government could allocate Rs. 100 million for the floriculture industry from the Perennial Crop credit line at 8% interest rate, this would be a boost for the expansion of the industry.
* High freight rates: Freight consists of over 45% of the sales value.
This is very high when compared to competing countries in Central America, Africa and East Asia. If measures are not taken to reduce freight, Sri Lanka would soon be uncompetitive in the global market.
Therefore we suggest the Government through the Ministry of Agriculture and Ministry of Commerce to initiate a dialogue with the airlines to reduce the freight rates for Floriculture by 10%. On the medium term, this measure would bring in more revenue to the airline industry due to increased volumes.
* Government Policy: The government should have a firm policy on the development of the Floriculture industry. It should be focused on assisting the exporter and increasing the revenue to the country. Various government institutes such as the Department of Agriculture, Forest Department, Customs and Department of Commerce should be working towards this policy of assisting the exporter and not to discourage the exporter due to un-coordinated work within and between government departments.
Hence we urge the government to look into these issues, to ensure the growth of the Floriculture Industry in Sri Lanka to its true potential and ensure this industry which is most environment friendly, grow to its global potential.
Dilip de Silva, President, Floriculture Produce Exporters Association
Produced by Lake House