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Re-export of imported low quality spices as SL products frowned upon
Observers claim that a new Cabinet proposal to import, repack and export foreign spices as Sri Lankan products will have serious consequences
The Cabinet recently granted approval for a new Temporary Import for Export Purpose (TIEP) scheme for arecanuts (puwak) and karunka for value-added exportation. The TIEP scheme, signed by Agriculture Minister Mahinda Yapa Abeywardana, Industry and Commerce Minister Rishad Bathuideen, Coconut Development and Janatha Estate Development Minister Jagath Pushpakumara and Minor Export Crop Promotion Minister Reginold Cooray, is expected to raise some US$ 300 million in foreign exchange.
“We live in a small country, so our production isn’t sufficient to meet the demands of the international market,” Minister Cooray told the Sunday Times. “India does the same thing; they import our spices, value-add and export.”
However, the scheme has raised concerns regarding the quality of products being imported and the effects on local growers. President Mahinda Rajapaksa, as Minister of Finance and Planning, observed that it’s more productive to increase local production of arecanut and cloves for export and strengthen local products. The President added that exporting imported cloves (as originally proposed in the Cabinet paper) would hurt the international reputation of Sri Lanka’s cloves.
The line ministries were required to submit a report on importation of cloves as proposed.
“The clove paper is currently in progress,” Minister Cooray said. “The request was regarding what is being done to protect quality and local farmers.”
Lawyer Jagath Gunawardena claimed that the TIEP scheme will facilitate importation of low-quality, diseased and pest-ridden spices.
“Trade share must be qualitative not quantitative,” he said. “If these are quality products, why won’t the origin countries export them straightaway?” Lanka Organic Agriculture Movement President Thilak Kariyawasam said exporting low-grade products from countries such as Indonesia and Cambodia, as Lankan products, will “definitely affect the Lankan brand, local small farmers and small to medium businesses”.
“Exporting spices from Sri Lanka has great advantages such as brand recognition and low duties, compared with exporting from countries such as India or Indonesia,” Former Deputy Director of National Plant Quarantine Service Yahajeewa de Silva said. “If buyers realise the products are mixed, it will hurt the trust they have in us,” he added.
Dr. de Silva claimed the TIEP scheme is a “price control” scheme where some companies can import substandard spices and export for cheap, putting local farmers at a great disadvantage, where they are forced to sell their products below a justifiable value. “They bring in low-grade products, process it, and export the good portion,” he said. “What happens to the bad portion left here? Some could even be pushed into the local market.”
Minister Cooray said price fixing and a grading system will protect local farmers and reputation of exported spices.
“We are going to fix the price to protect local farmers, like for green gram and kidney beans,” the Minister said. “We can introduce a grading system, such as in the tea industry where there is Pure Ceylon Tea. In that, we can protect our identity and reputation.”
The scheme is subject to the regulations and provisions of the Plant Protection Act of 1999 (PPA). Under the proposal, imported products are banned from being sold in the local market, and goods must be imported under the strict supervision and conditions of the Plant Quarantine Director.
“These plants will be fumigated to eliminate the risk of pests and disease, and there’s a quarantine check within the country,” Additional Secretary of Agricultural Development D.B.T. Wijeratne said.
A similar TIEP scheme was implemented in 2001 for temporary importation of cashew, following a drought-affected decrease in production.
“In 2001, there was a huge demand for cashew and the local prices went up, so they claimed there’s not enough supply, and the government approved temporary importation,” Mr. Kariyawsam said. “In the end, that cashew racket introduced 11 new diseases to the local crops.”
In addition, importing karunka has created new pest menace for local crops, Dr. de Silva said. Mr. Gunawardena said the cashew TIEP scheme violated the Plant Protection Gazette 165/2 that prohibits importation of cashew and cloves.
“A Cabinet decision cannot deviate from existing legislation or certain laws,” Ministry of Coconut Development Secretary Nihal Somaweera said. “As far as I know, the new TIEP scheme doesn’t deviate from existing legislation. In the past, we have imported coconuts too, when there were shortages.”
The Gazette also prohibits importation of plants belonging to genus Cocos, “coconut and other genus-related plants.”
Dr. de Silva said more effort needs to be put into increasing production, instead of importing during times of shortages.
“They say for karunka there isn’t enough production, but when products such as arecanut are grown, we can increase the output to meet demands,” he added. “However, there are no efforts to do so. Even if it’s temporary, these TIEPs can go on as long as the market exists.”
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