Tea smallholders welcome fertiliser subsidy

Channa Kasturisinghe

FERTILISER SUBSIDY: Tea smallholders welcomed the Government's decision to grant a fertiliser subsidy for those who have less than five acres of land which would considerably reduce their production cost.

J.M.B.J. Bandara of the Federation of Tea Small Holders' Societies told the Daily News yesterday, that the Government's move will benefit the tea smallholder sector of which about 93 per cent consists of planters who own less than five acres.

"Subsequent to a meeting held with the Finance Ministry Secretary Dr. P.B. Jayasundera recently, the tea, rubber and coconut smallholders were given an opportunity to discuss the issue with President Mahinda Rajapaksa last week.

The President understood our difficulties and decided to grant Rs. 15,000 per one metric tonne of fertiliser," Bandara said.

He said as a result of this Government decision, tea, rubber and coconut smallholders will be able to purchase a bag of fertiliser for Rs. 1,200 for which they earlier paid Rs. 1,800. "In the previous occasion when the Government offered the fertiliser subsidy to tea, rubber and coconut smallholders they were able to purchase a bag of fertiliser for Rs. 855. However, we are satisfied with the new offer specially considering the increase of fertiliser prices in the market," Bandara said.

Bandara said in addition to increasing production cost, tea smallholders also face difficulties due to various other reasons.

"In fact, our main problem is that we do not get a reasonable price for our produce. What the smallholders are paid for one kilo of tea is from Rs. 25 to 32. If we are paid at least Rs. 40 we actually do not need a fertiliser subsidy.

Apart from that increasing labour cost and the inadequate labour force in the sector is also a serious issue," he said.

The smallholder tea sector dominates the local tea industry contributing to about 65 percent of the total tea production. Bandara said the fertiliser subsidy will improve the sector's contribution as more landowners who were discouraged due to increasing cost will restart their production.

According to the Central Bank statistics, the average cost of tea production in the sector increased by 7.3 percent to Rs. 168.85 per kilo in 2005 due to increases in input prices such as fertiliser, agrochemicals and fuel as well as wage increases.

However, the country recorded the highest ever record in tea exports in 2005 reaching a figure of 298.8 million killogrammes mainly contributed by the smallholder sector.