Confusion over betel-nut imports
An attempt by four ministries to protect local betel nut production and increase foreign exchange earnings by the export of its value-added product, has failed to achieve the desired results – the reason a controversy over the implementation of a Cabinet decision.
The objective was to reduce Indonesian betel nut imports which are then processed and re-exported to India and the Middle East, and to promote local production.
Agriculture DG’s letter revoking permits and (right) Agriculture Ministry Secretary’s letter to Customs DG
Currently, Wayamba Traders is one company involved in betel nut import, reprocessing and re-export to India and the Middle East.
However, four ministries studied the consequences of betel nut imports, including the possible spread of insects and diseases to the same Palmae family trees including coconut.
This was because coconut trees have been vulnerable to various diseases in the past. Last year, some 162,000 nut-bearing coconut trees in the Matara District were felled as the coconut’s leaf-withering disease spread in the district.
Similar measures were resorted to in several other areas to prevent the spread of diseases, prompting the Consumer Affairs Ministry to import coconuts from India. With a view to restricting imports, a joint memorandum by the ministries of Agriculture, Industry and Commerce, Minor Export Crop Promotion and Coconut Development and Janatha Estate Development, was submitted to Cabinet earlier this year.
The ‘memo’ called for “strategies for a new method of trading aimed at earning foreign exchange through temporary import of plant production and re-exporting same with value addition.”
One reason to restrict the imports was the high risk of exposure to harmful micro-organisms and pests, and the spread of disease to other plants, particularly those of the Palmae Family, even after fumigation.
The ‘memo’ also noted that Sri Lanka was gaining a marginal benefit in terms of value addition, of around US$ 4 million, annually.
Therefore, it was decided to stop the issuance of new licences for re-exporting of betel nuts under the Temporary Import for Export Purpose, or ‘TIEP’, scheme.
They also decided to gradually scale down the import of betel nuts over a five-year period under the TIEP scheme, to enable existing processors to substitute imports with local produce.
In order to promote local production, an imposition of a condition was proposed, that two metric tons (MT) of local betel nut be purchased for every MT imported for re-export.
Another decision was to regulate the import of betel nuts under the supervision of the Export Control Dept., Agriculture Dept., and the Customs, to ensure no ‘leakages’ of imported betel nuts into the local market.
More imports
Further, in order to boost local production, it was also decided to accelerate cultivation programmes.
The objectives were clear and the guidelines were approved.
The Agriculture Dept., acting on the Cabinet decision of April 4, informed the Director General (DG)-Customs that all permits issued by it, for the import and re-export of betel nuts under the TIEP scheme, “is hereby revoked.”
Since the Cabinet decision in April, more than 2,700 MT have been cleared, while 40 more containers have been imported. The containers were detained by the Customs for investigation, but eventually released on instructions from higher officials in the Dept.
This was after the Agriculture Ministry Secretary R.M.D.B. Meegasmulla in a letter dated April 30 addressed to the Customs Director General said ‘Please follow only the decision of the Cabinet.”
However, Agriculture Dept., Director General Dr R.R.A. Wijekoon told the Sunday Times that despite his previous decision more stocks had arrived. He maintained yesterday that the decision to revoke the issue of permits had not been changed.
“When betel nut is imported into the country, it needs to undergo a fumigation process at the Coconut Research Institute, Lunuwila. However, this has not taken place,” he said.
According to Wayamba Traders Managing Partner S.H. Sadikeen the Cabinet decision had been ‘misinterpreted’ by the Agriculture Dept, and he had written to the Customs clarifying the issue.
He said that the Cabinet decision only states that no “new permits” will be allowed under the TIEP scheme and they have been in business since 1993. He said after the Secretary issued the letter the stocks were cleared from the Customs.
Customs spokesman Leslie Gamini who is also its Director-Legal, said that this particular company was using TIEP permits approved by Cabinet in 2012, while the recently approved Cabinet decision has yet to come into effect.
However, Dr Wijekoon maintained that all permits issued under the TIEP scheme have been revoked.
As controversy reigns over the Cabinet decision betel nut stocks continue to enter the country.