Planters’ Association hails bail out package

Ravi LADDUWAHETTY

Planters’ Association of Sri Lanka Chairman and Agrapatana Plantations Director G.D.V. Perera said the Association was pleased about the bail out package to be provided by the Government at reduced interest rates, which he said, that the industry was made to understand was for a month where the working capital was to be tied to the current crisis.

“We are also informed that the repayment of the already availed of project loans will be deferred for around a year from now which will give some stability to the Regional Plantation Companies till the demand for tea, rubber and oil palm stabilises.

However, the reduction of the fertiliser prices appears to be only for the smallholders and unfortunately not for corporates. It was obligatory on the part of the Government to provide us also with the same benefit as we too employ around a minimum 330,000 employees in all 22 Regional Plantation Companies he said, and added that they also had high overheads as small holders.

RPCs which once enjoyed a zero rated VAT, enabled them to set off input VAT. However, this was removed but passed to other industries where even exporters of those industries also began to enjoy those industries, he lamented.

He also pointed out that this was the most opportune moment to restore the benefit of the zero rated VAT for the plantation industry by re-establishing the prior status quo as a priority. He thanked the Government for the steps taken but implored it to adopt the policies at the earliest before it is too late.

Tea Exporters’ Association Chairman Jayantha Keragala said the motives of the package were good but CESS of 2 per cent per kilo exported, in addition to the current Rs. 4 per kilo was detrimental to the industry.

He said President Rajapaksa grasped the industry issues well but added that officials had not kept him informed of the real issues.

If the Sri Lanka Tea Board was to intervene in the pricing formula to make it the minimum Rs. 45 , the National Sale Average would have to be Rs. 300 per kilo. The earlier occasion that the Sri Lanka Tea Board intervened , it did not have the funds to pay, he said.

According to the by laws governing the auctions, funds have to be settled on the sixth day following the day from the fall of the hammer, he said.

He said the Association had proposed to President Mahinda Rajapaksa at a meeting on Monday to have a Government to Government mechanism where Sri Lankan exporters are settled in Rupees and Iranian importers are settled in their currency as trade balances were heavily weighted towards Iran due to oil imports.

President Rajapaksa has also proposed that a Government/ private sector delegation be sent to Iran to discuss the modalities of the proposal.

Colombo Rubber Traders’ Association (CRTA) Vice Chairman and Kegalle Plantations and Maskeliya Plantations Director Operations Sunil Poholiyadde said the intentions of the Government in providing a minimum price of Rs. 150 per kilo for the growers was good but for that price to be feasible, the auction price had to be Rs. 175 to Rs. 180 per kilo.

He also stressed that nobody could guarantee that the auction prices would be Rs. 175 and Rs. 180 as that was decided by the supply and demand factors.

He also said what was unknown was the mechanism that the Government was proposing to adopt to provide the minimum Rs. 150 per kilo.

We would like to know what the Government was proposing to make the floor price between Rs. 175 and Rs. 180 so that the minimum Rs. 150 was to be paid to the plantation companies and other stakeholders of the industry including the smallholders,” he said.