 Tea traders say Sri Lanka’s tea sector is short of cash for essential research, brand building and representation at international forums. But when the Sunday Times FT contacted the Sri Lanka Tea Board for explanations, Tea Board officials said they have been instructed ‘not to talk to the media’ by the Minister.
As a result of the gag order, the Tea Board could not comment on the tea sector cash situation, and what measures will be taken to address the issues raised by the tea traders. Analysts say the government is cash strapped and is cutting down wherever it an. However, tea traders say cutting down on essential research, promotional work and on Sri Lankan representation at international tea forums, is being “penny-wise and pound foolish.”
For instance, tea traders say not sending suitable officials to represent Sri Lankan interests at international tea forums, has hurt Sri Lanka more than the money saved on the trip. “There have been recent instances where resolutions gravely adverse to the Sri Lanka Industry were approved by default, in the absence of Sri Lankan representation. “We cannot afford to permit our competitors to gain such decisive advantages over us, on account of our disinclination to invest in these initiatives,” said the Chairman of the Colombo Tea Traders Association (CTTA), Avi de Silva, at the CTTA AGM.
“It is imperative that Sri Lanka is represented by appropriate senior state officials at these meetings, to ensure that resolutions inimical to our tea industry are not adopted, and conversely, those propitious to us are espoused,” said Mr de Silva.
Tea traders say that taxes collected from tea exports are going directly into the Consolidated Fund of the Treasury and that the line ministry, the Tea Board and the tea industry “play no role” in deciding how this money is put to use. The tea traders say that the amount being reinvested in the industry is “progressively diminishing.”
“In fact, a progressively diminishing proportion of these funds is being re-invested in the industry from which it is extracted, and an increasingly insignificant provision is being made for promotion, either generic or brand,” said Mr de Silva.
On top of not getting enough money for promotional work, the sector is short of money even for essential research activities. The Tea Research Institute is currently working on maximum residue levels of pesticides and chemical based agricultural applications, to establish Ceylon Tea as the cleanest tea in the world. But these research activities will have to stop unless more money is found.
“The TRI is in the process of conducting very important field trials, the results of which have, then, to be analysed by accredited international laboratories. Unless funds are released for this purpose, as well as for research to identify cost-efficient and quality alternatives for certain chemicals that are indispensable for the effective production of tea, but have been either banned or reduced to unrealistic levels by particular consumer countries, such work will grind to a halt,” said Mr de Silva.
However, the tea traders noted that the government, despite its cash problems, has continued the fertilizer subsidy to tea smallholder and the 15% income tax on revenue from export of tea packets of 1 kg. or less, was withdrawn. A concession was also granted for tea companies to qualify for the Export Development Reward Scheme.
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