Positive move, criteria straightforward:

Exporters hail reward scheme

Sanjeevi JAYASURIYA

The Export Development Reward Scheme initiated by the Ministry of Export Promotion and International Trade is progressing successfully.

The implementing body of the scheme is the Department of Commerce. It is conducted under three criteria, namely, revenue, employment and volume of sale.

The Department has called for applications for the second quarter and the closing date for applications is August 15.

The objectives of the scheme are to encourage to secure existing markets, penetrate new markets and to establish and promote backward linkages.

It also recognizes the diversity and increased value addition, maintaining the existing level of employment, quality standards and best practices in exports.

Under the scheme when an exporter secures 90 percent of the second quarter export volume compared to the previous year it falls under category A and qualifies to receive 5 percent of the FBO value and an exporter who secures 80 percent of the previous export value qualifies to receive 3 percent of FBO value. The exporter should maintain the same level of employment and this is a performance based reward scheme.

Here is a cross section of views from the business community.

The Ceylon National Chamber of Industries (CNCI) considers the Export Development Reward Scheme as a timely and effective scheme to encourage exporters. The scheme covers the employment aspect as at a time of global recession many companies are forced to reduce the workforce.

“This program is an encouragement for exporters and we look forward to the speedy settlement of claims”, CNCI Chairman Newton Wickramasuriya said.

The National Chamber of Exporters (NCE) Vice President Sarath de Silva said that nearly 75 percent of the income from export products such as tea, rubber and coconut goes back to import food which is equal to the oil bill or more.

“We need to increase our exports, especially the agri products to earn more foreign exchange. The local added value in agri products is 95 percent or more. This is in comparison to the 10 percent value addition in products such as garments and electronics. Hence, we must encourage more agri products and expand our export base, he said.

This scheme motivates exporters. It is also necessary to allow adequate time for the applicants to derive the benefits under the scheme. It takes time for exporters to get ready with the documentation and this scheme should not be confined only to Colombo based exporters”, he said.

“The future of the country is not Colombo. We need to reach the peripherals and they need time to submit their applications”, he said.

Senior Vice President, National Chamber of Commerce Sri Lanka (NCCSL) Asoka Hettigoda said that it is important to have a scheme of this nature at a time when the whole world is slowing down and curtailing products.

It is a boost to exporters and timely. It is also a recognition for exporters. The efforts of the Government to support the exporters will go a long way, he said. It is important to expedite the reward process. Exporters are facing numerous challenges as cheap alternatives are flooding the markets.

A scheme of this nature is greatly appreciated, he said.

In future, a program to promote the SME sector is necessary. We need to create new exporters to fall back when necessary. We need to diversify into new sectors to bring more revenue.

We should focus, target and maintain cash cows to expand our markets. It is important to create a more diverse export base not only in tea, but also food and handicrafts, he said.

President, Federation of Commerce and Industries Sri Lanka (FCISL) Kosala Wickramanayake said that this is a good scheme and an encouragement to exporters.

It will give recognition for exporters to market their products internationally. The banks will also recognize the reward scheme in providing facilities. It is important to include other services too.

Secretary General of the Joint Apparel Association Forum (JAAF) Rohan Masakorala said that it is a good move by the Government to reward exporters on performance basis. The encouragement given at a tough time motivates exporters to become proactive in a crisis period.

“It is a positive move and the criteria is straightforward.

“There are minor matters to be considered and it should be handled on a case by case basis. Overall, we are happy with the scheme”, he said.

At a glance:

* Scheme to penetrate new markets

* Speedy settlement of claims anticipated

* Recognition for exporters