Boost for Sri Lanka tea with Rs. 4 b from ADB

The Tea Cluster set up under the National Council For Economic Development got a boost with a Rs. 4 Billion funding from the Asian Development Bank to increase land and labour productivity to retain the country's comparative and competitive position as a tea exporter.

Director for the National Council For Economic Development Rohantha Athukorala said 'Sri Lanka's tea exports are by 10.4% over last year to Rs. 59 Billion as at end September 2005 and poised to bring in over Rs.75 Billion for Sri Lanka in the year 2005.

Packeted tea is up by 28% to Rs.15.1 Billion, tea bags are up 5.2% to Rs. 7.9 Billion whilst Bulk Tea is up 6.5% to Rs. 29.1 Billion. We now have to focus and drive this Industry so that value addition can be moved up from 33% to 50% in the exports by end 2008.

With the setting up of the Tea Cluster with the top professionals from the Industry under the NCED umbrella we were able to conduit some key budget proposal's for 2006 from the industry, to the Secretary to the Treasury Dr. P.B. Jayasundera.

The reducing of the Economic Service Charge on tea processing factories from 1.0% to 0.25% has been hailed by the private sector'.

The Tea Cluster is now driving aggressively towards formalising the amended tea control act which will make quality teas come into the market place from the system.

The Rs. 4 Billion ADB investment is being directed to institutional reforms, increasing the income of tea smallholders and private estates on a sustainable basis, Social and rural infrastructure improvement and reforestation. One of the key issues faced by the industry is low yields due to not maintaining a standard of 2% replanting which in turn has made Sri Lanka bring yielding an approximate 1400 Kg per HA whilst African countries like Kenya having an out put of 2500 Kg's per HA.

Currently Sri Lanka's replanting of tea is at 0.57% which brings down the productivity and thus the Cost of production being higher leading to Sri Lanka being out priced in the world market.

A 4518 HA of tea has gone through replanting under the ADB grant of Rs.4 Billion. In the budget proposals of 2006 a revolving fund of Rs. 10 Billion will be set up for the Nursery development programme, factory modernisation, re-planting and soil conservation.

The Tea Cluster once again appreciated the thrust to the sector and requested to pursue avenues of getting HACCP certification funding where each factory will cost Rs.10 Million. This can help Sri Lanka be stronger in the EU market as HACCP certification has become competitive advantage due to increase in Hygiene and Sanitation practices the world over.

The Tea cluster headed by Chairman Tea Board Niraj De Mel and Secretary to the Ministry of Plantations Industries have sketched a detailed action plan with the top professionals of the NCED Tea cluster members to develop a National Policy on Tea Factory establishment and maintenance, promote modern agronomic practices, maintain leaf quality standards, develop a land use policy for the tea sector and using of IT for monitoring the industry key performance indicators.

" The NCED under the leadership of Dr. Jayasundera is committed to make the Sri Lanka tea exports achieve a Rs.100 Billion by end of 2008 by driving 50% of our exports be value addition driven and continue its dominance in the world market' Athukorala said.