Politics and improper use of taxes among SL tea sector issues
View(s):Remove politics out of the plantation sector and use the cess (taxes) for the benefit of the Sri Lankan tea industry, were two cross-cutting themes that came out in a discussion on Wednesday on the tea sector.
The MTI Tea Strategy Forum, was the second in a series focusing on the future of the tea industry. At the outset, MTI CEO Hilmy Cader said the session at the Kingsbury Hotel in Colombo was not about the debate over imported teas. It was to do with a bigger issue of the future of the industry.
Mr Cader’s comments comes in the backdrop of a study that the MTI did some time ago for the Sri Lanka Tea Board on value addition in the sector.
While he presented an overview of the issues facing the industry and whether Sri Lankan tea is catering to the needs of the consumer, the grower or the local trade, a panel comprising Anselm Perera, Managing Director, Mlesna (Ceylon) Ltd; Niraj De Mel, former Chairman, Sri Lanka Tea Board; Roshan Rajadurai, Managing Director, Kelani Valley Plantations and Romesh Croos Moraes, Director, Finlays Colombo, presented their views on various issues.
Mr Rajadurai said in whatever strategic plan that would evolve in the future, the 2.5 million workforce and stakeholders must be taken into account.
He said wages which account for 70 per cent of the cost of production has always been an issue in the economic viability of the product.
Veteran trade personality, Anselm Perera, Managing Director of the Mlesna (Anselm-spelt-backwards for readers who are unaware) brand was blunt in his comments saying quality, quality and quality is the key to the future.
Joining others in unison, he said politics has ruined the plantations and should be warded off if the sector is to survive. The sector should decide on wages, an issue which is unlikely to be resolved for a long time.
He was also critical of the way the cess and other collections from the exporters totaling Rs 4 billion are used. “What is happening to this money? It never comes back to the industry,” he said, adding “we pay all these taxes which are meant to be ploughed back but nothing happens.”
Focussing on the need for quality tea, Mr Perera said his company has always purchased quality tea but lamented the drop in quality over the years. “Of the 300 million kg Sri Lanka produces and exports every year, I can tell you than only 40 million kg is quality tea,” he said, adding – again bluntly but with authority – that Sri Lanka exporters are selling ‘crappy’ tea to the Middle East.He said in the pre-nationalisation era, Sri Lankan tea was known for its quality. That changed after the nationalization with quality dropping rapidly over the years.
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