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An increase in the exportable surpluses of agricultural produce is an important means of improving the trade balance. The reduction of these exports has been one of the reasons for the poor export performance in recent decades. The pursuit of new export products and services should not result in a neglect of the country’s traditional agricultural exports.

Export strategy
The National Export Strategy (NES) attempts to enhance exports in many new areas such as information technology services, boat building, tourism and spices. Undoubtedly, to achieve much higher export earnings there has to be an expansion of export products and new markets found. However such an export diversification, though essential, should not result in the neglect of the three traditional agricultural exports.

Export surpluses
The setbacks to production of all three traditional agricultural exports in recent decades have reduced export earnings. A substantial increase in production of tea, rubber and coconut is a precondition to achieve such export surpluses. However, increasing production and productivity of tea, rubber and coconut is beset with severe constraints and challenges.

Neglect
Over several decades there has been a lack of effective policies to develop plantation agriculture. The diversification of the economy, inappropriate economic policies, political interventions, urbanisation, inadequate investment and neglect of crop research have resulted in setbacks to production of all three crops and reduced export volumes.

The loss of agricultural lands, government’s inappropriate land policies, labour shortages, inadequate expenditure on research and development and inadequate investment have resulted in decreased production of all three crops. Appropriate land policies, high quality research, higher investment, sound economic policies and incentives could achieve higher production of tea, rubber, coconut to enable larger export surpluses in them.

Tea production
There has been a lesser focus on the tea industry after the diversification of exports from the 1980s. The productivity of most tea estates are below their potential. This is owing to a significant proportion of plants being senile. A larger extent of replanting with vegetatively propagated (VP) high yielding teas is vital to increase productivity on estate tea lands. Replanting subsidies and other incentives have to be provided to increase tea replanting. Solutions have to be found for the severe shortages of labour on the estates and even small holdings.

Tea Research Institute
The Tea Research Institute has been neglected owing to inadequate funding, which in turn has led to the inability to attract high quality scientists. Increased funding of tea research is necessary though not sufficient. The organisational structure with greater accountability to the private tea producers, setting priorities in research, higher remuneration for research scientists and rewards and recognition for path-breaking research are essential.

Rubber
Sri Lanka’s position in world rubber production fell from the fourth largest rubber producer in 1995 to the 14th. Natural rubber exports declined to as little as 0.3 percent of total exports earning only US$ 40 million last year, but manufactured rubber exports increased to US$ 485 million. Natural rubber exports are minimal due to both sluggish production and almost all the country’s rubber being used in rubber manufactures, mainly for exports. This is a favourable development, but an increase in rubber production could generate a higher export surplus to earn significant export earnings as well as support manufactures.
Rubber production has to be increased by expanding the area cultivated and increased productivity. Rubber cultivation on estates and smallholdings face severe problems that have to be met. Expansion of rubber cultivation in new areas like Moneragala is a positive recent development.

Rubber Master Plan
The Rubber Master Plan has to be effectively implemented to achieve the expansion of natural rubber production. The plan targets achieving an annual gross industry turnover of nearly US$ 4,400 million by 2025 by increased value of raw rubber production, rubber products manufacturing and the income from rubber wood based products. The value of exports is projected to be around 15 percent compared to the current 8 percent.

The three-pronged strategy of the Master Plan is to increase productivity from existing rubber lands, expand the extent of rubber cultivation and enhance value addition of rubber by expanding locally produced natural rubber products. Achieving these targets require higher investment, collaboration of the government and rubber growers and effective implementation of ten projects.

The ten projects aim at increasing the annual rubber output to an estimated peak quantity of 305,200 metric tonnes by 2046. However in the short run, by 2024, rubber produced would decline to 101,070 metric tonnes due to essential replanting at an accelerated rate of 4 percent. The maximum national average yield is expected to be 1,806 kilograms per hectare (k/h/y) by 2046, but the average yield in 2024 will be only about 1,046 k/h/y.

The two-pronged production strategy is to expand the current area by adding another 37,000 hectares and enhance overall productivity of rubber lands by the popularisation of new clones coupled with vigorous replanting with quality planting materials. The success of this strategy would enhance natural rubber and manufactured rubber exports.

Coconut
Coconut production and exports too have decreased owing to reduced coconut production due to increased domestic consumption and the area under cultivation diminishing. The area under coconut declined over the years owing to the use of coconut lands for urban and commercial uses. Consequently coconut exports amounted to only 3.1 percent of total exports last year.

As a large proportion of coconut produce is domestically consumed, coconut production has to be increased substantially to increase the export of coconut produce. The extent under coconut cultivation has to be expanded to increase coconut output significantly.

The identification of the North and East for extensive new cultivation is a move in the right direction. The alienation of government-owned lands for large scale coconut cultivation and an effective extension programme to increase home garden cultivation are essential to increase coconut output. Since the development of coconut lands will take time, an increase in coconut exports is a medium and long term objective. The sooner it is begun the better.

Summing up
Despite the need for export diversification, agricultural exports are significant as their domestic value addition is high. It would be a serious flaw in an export strategy to not expand exports of tea, rubber and coconuts, for which the country has a comparative advantage. Increasing agricultural exports could improve the trade balance significantly. At present export surpluses are inadequate to make a dent in export earnings. Generating export surpluses in agriculture however poses serious challenges.

The quest for increasing new avenues for increasing exports, should not lead to a further neglect of the country’s traditional agricultural exports. In tandem with the effort to enhance new exports, there must be also a serious effort to increase production of the country’s traditional agricultural exports that have high domestic value addition. Increasing their production and productivity is challenging but necessary.