Tea industry expected to contribute $ 200 million extra revenue to public coffers

By Hiran H. Senewiratne

In a situation where the country is short of foreign reserves, the tea industry will likely contribute US$ 200 million extra revenue to the country despite the current chemical fertilizer restriction, chairman, Tea Small Holdings Development Authority Dr. Thushara Priyadarshana said.

|” The tea industry helps the Sri Lanka economy to earn more than 10 percent of foreign exchange, earning US $ 1.4 billion. With an increase of 20 percent production this year we could expect another US$ 200 million additional revenue to the country, Priyadarshana told The Island Financial Review.

Priyadarshana added: ‘The tea industry is composed of two main sub-sectors; the corporate sub-sector or the large plantation companies and tea smallholdings. The small holders/holdings which grow tea between 20 perches to 10 acres comprise 46000 smallholdings, spanning more than 160,000 acres, including upcountry contributing more than 75 percent to the country’s total annual production.

‘Last year total tea production was 285 million metric tons and this year it would likely go up to 325 million metric tons. With the increase of another 20 percent of the production we could earn another additional revenue of 20 percent this year compared to the last year.

“The Covid- 19 pandemic situation also helped to retain its labour force within the industry, which in turn prevented the exodus of labour from the sector. Further, the government banned importing refuse tea and also helped the sector in a significant manner.

“At present we have ample fertilizer stocks for this season but from next year onwards we will be shifting to organic fertilizer to cut down on the chemical fertilizer in the country in order to produce organic tea, which has very high demand in the international markets.

“More than 450,000 smallholders are spread in 13 districts (8 regions). The smallholder sector has recorded 1.5 million dependents and over 400 factory owners have emerged as the major force in tea production.

“The State Minister of Company Estate Reforms, Tea Estates Related Crops has taken many steps to provide 25 million additional plants to the farmers through subsidized nurseries island-wide in addition to 25 million plants provided by private nursery owners.

“Further, cultivation subsidies and incentives are being provided to maintain continuous extension services for the development of technical and management knowledge to improve the sector.”