Cash from wonder herb Komarika

Many years ago President Ranasinghe Premadasa had a favourite slogan: “Big investor, small producer.” This related to a strategy of helping the rural agricultural community of this country, comprising a very large segment of Sri Lanka’s population, to enhance their incomes and lifestyles by cultivating largely non-traditional crops. What the president, well known for his genius of addressing and overcoming seemingly insurmountable challenges, was looking for was largely private sector investment for establishing processing factories, nurseries and extension services that would provide guaranteed markets for outgrower agricultural production. Another such project with Aloe Vera, a wonder herb, (Sinhala Komarika) is now in the pipeline.

This fleshy, cactus-like plant, ubiquitous in many home gardens in the country, has been known for centuries for its medicinal, skincare and a myriad of properties. It is used as a treatment for heartburn, as an alternative mouthwash, blood sugar, digestion and even in the treatment of breast cancer. It has been in the Ayuveda Materia Medica for eons and is a common home remedy for burns. Its many amazing properties are being continuously unlocked and, with today’s appetite for natural products, commands a market worth billions of dollars in the western world. We in Sri Lanka and our South Asian neighbors are very familiar with the manifold uses of this herb which grows well even in the dry zone areas of our country.

The government has approved a USD 783 million project to commercially grow the herb in the Anuradhapura district targeting abundant export markets. This involves leasing 66 acres of government land to a company called Aura Lanka Herbals (Pvt) Ltd. owned by a businessman named Viranjith Thambugala. It’s website claims that it is the largest privately-owned agro project in the country with a focus on finding and identifying bare land not cultivable due to the lack of water. Aura is confident that the very ambitious project of a diversified business group that’s into many other areas including gems, will create thousands of job opportunities. The capital investment for this project according to the Government Information Department is USD 300 million. It envisages harnessing privately owned and government-granted land and the business plan appears to be a modern processing factory, plant nursery and outgrower mobilization model used before by Pelwatte Sugar and others.

Long before Mr. Premadasa and his ‘Big investor, small producer’ model germinated, the Ceylon Tobacco Company owned by the giant multi-national, British American Tobacco (BAT), succeeded in eliminating the need for importing tobacco leaf for their super-profitable cigarette manufacturing business by ensuring that small farmers grew the tobacco they needed right here in Sri Lanka. A surplus was produced making possible tobacco leaf exports to other BAT production units of their sprawling global business empire. Ceylon Tobacco did not build large factories for this purpose but funded tobacco curing barns owned by small entrepreneur in the growing areas. Farmers were provided with extension services helping them to improve both the quality and quantity of their product purchased at guaranteed prices to supply the cigarette factory in Colombo. This proved to be a huge success benefiting all stakeholders.

There is no need to belabor the fact that tobacco is a most harmful industry. Ironclad evidence of this has been widely disseminated for several decades. Yet the tobacco industry continues to survive on the face of the earth on a flimsy argument that smoking is an adult choice. Despite regulatory measures worldwide, including health warnings on cigarette packs, and the price stick that has been long used in many countries including ours to make smoking a most expensive habit, people continue to smoke out of nicotine addiction or plain stupidity. Governments worldwide reap enormous revenue from sky high ‘sin’ taxes on tobacco. Cigarette manufacturers propagandize their massive tax payments to governments, including our own, to hammer home the message that they provide a significant slice of government revenue. The counter argument that smoking costs the healthcare system more than the revenue it generates is commonly bruited. Be that as it may, tobacco growing in Sri Lanka is now discouraged if not prohibited altogether, and the early story is now history.

There have been other successes in diversifying non-traditional agriculture by private investment encouraging production. One example is gherkins which are widely grown in our country for processing the pickles that are an essential relish in hamburgers. Readers would know that these are finger-length cucumbers pickled in brine that are unsuitable if they grow too long. Our supermarkets have long stocked the over-sized gherkins which, though unsuitable for export pickles are widely used for salads and other preparations. Hayleys was among the companies that pioneered this thriving business and commands a dominant market share in this product that has greatly benefited farmers here. There are other players too catering to the global demand for pickled gherkins.

Pelwatte Sugar which attracted investment from a global giant, Booker Tate, and other government-owned sugarcane growing and processing projects, despite massive tax and other incentives did not take the country anywhere close to the envisaged self-sufficiency. What happened was that the potable alcohol byproduct of sugar molasses proved more profitable than the production of sugar. Pelwatte is now back in government hands. Although it does provide an income for peasant outgrowers in the Moneragala district, among the poorest in the country, they have not been able to lift themselves above subsistence levels of existence. Like sugar, the new aloe vera project looks promising on paper. Hopefully it will achieve the desired result.