News
Urgent bid to save tea industry
The Ministry of Plantation Industries is to ask the Government to infuse Rs. 800 million to provide a guaranteed price to tea producers until global prices stabilise. This is to prevent a collapse of the tea industry due to low prices. Prime Minister Ranil Wickremesinghe will chair a criss meeting in this regard on Tuesday.
“Our Ministry is seeking Rs. 800 million as emergency assistance, so we may immediately launch the guaranteed-price scheme,” Plantation Ministry Secretary Upali Marasinghe said yesterday, adding that producers would be given a guaranteed price of Rs. 73 a kilogram.
The funds are to be sought to guarantee a minimum price of Rs. 73 a kilo for green tea leaf to ensure that the industry recovers after claims by tea smallholders that they do not even get Rs 50 a kilo, while plantation companies claim they cannot pay more due to the high production cost.
The Secretary also said that in the long term the Government hoped to introduce a price mechanism whereby a guaranteed price would be ensured when prices dropped and — recovered in part when prices increased. He said currently the average world prices for tea was around Rs 380 a kilo, but prices needed to move up to Rs. 450 for the industry to remain profitable.
“We hope that the industry will recover by December and need to sustain the industry till then,” he said. He said the Government would also consider other alternatives such as subsidies for tea cultivators, instead of the guaranteed prices in future to reduce the burden on the state.
Sri Lanka’s tea exports have been hit mainly due to the tension in Ukraine and the economic crisis in Russia and the inability to maintain Sri Lanka’s market share in Middle Eastern countries. Mr. Marasinghe said the mixing of tea dust also had adversely affected our exports.
Amid this crisis, plantation trade unions were demanding pay hikes for workers, but companies were resisting the claims. The unions are demanding a minimum wage of Rs 1,000 a day, but companies have so far agreed to pay only Rs. 770. Negotiations between trade unions and companies this week failed to bring about a resolution.