Lifeline for tea industry

**Banks to cut interest rates, grace period extended**

**Tea Price Stabilisation Fund mooted**

**Tea Board buying more tea from Auction**

colombo: The Government yesterday took several vital steps to address the current problems faced by the tea industry.

These decisions were taken on the instructions of President Mahinda Rajapaksa, at a discussion held at the Central Bank yesterday under the patronage of Governor Ajith Nivard Cabraal.

The discussion focused on a number of key issues and several actions to be implemented with immediate effect were decided upon.

Accordingly, commercial banks will cut interest rates on loans offered for purchasing tea by six per cent, while the existing grace period of one week for settlement of these loans is to be extended to four weeks.

A ‘Tea Price Stabilisation Fund’ will also be set up.

The Government has allocated Rs. 1.5 billion as the initial capital for setting up this ‘Tea Price Stabilisation Fund’.

Apart from these measures, the Sri Lanka Tea Board has already taken steps to purchase tea from the Tea Auction.

The above moves will ensure the viability of the industry, which includes about 400,000 small-scale tea estate owners and other contributing parties such as suppliers, manufacturers, exporters and stockbrokers.

The current problems in the tea industry are said to be a temporary phenomenon and it is expected that things will return to normal as the global financial situation improves. The Secretary to the Ministry of Plantation Industries, the Chairman of the Sri Lanka Tea Board and various representatives of commercial banks in Sri Lanka also participated.

President Rajapaksa met top tea industry figures last week to seek their views on solving the problems affecting the tea industry.