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Declining tea production and tea exports are a serious setback to the economy.

The economy is hampered by declining tea production and lower exports of tea that are of critical importance to the external finances of the country.

The development of the tea industry is of utmost importance for the country’s economic development.

Tea production

The tea industry is in a parlous state. Tea production is in a declining trend. Forbes and Walker, a leading tea broker, has described the tea industry as being in “tumultuous times.”

Forbes and Walker says: “The tea industry is going through tumultuous times in terms of production with crop levels plunging to a near three-decade low.”

Causes

The unavailability of chemical fertilisers, weedicides and fuel and financial constraints have been responsible for this dip in production and exports. Immediate steps must be taken to restore tea production and exports by removing these constraints.

Fertilisers and agro-chemicals

Consequent to the ban of chemical fertilisers and weedicides in 2020, tea production fell from 300 million kilogrammes in 2019 to 195 million kilogrammes in 2020. It recovered to some extent in 2021 to nearly 300 million kilogrammes. It is projected to be somewhat lower this year.

Short term

Tea production could be restored to the pre-fertiliser ban level in 2023, if fertiliser and agrochemicals are available and there is adequate rainfall. The Government must ensure that the needed inputs are speedily ensured to tea estates and small-holders.

Markets

There is also a need to regain markets that were lost owing to the recent shortfall in the availability of Ceylon tea for export. Some buyers have turned to other teas owing to our reduced exports. The bigger problem is to increase tea production in the long run.

Long run

There has been a neglect of tea cultivation for a long period. The mismanagement of state-owned estates after their take over in 1974 was a disaster. Consequently, tea production in the estates declined. Fortunately, small holder tea cultivation expanded, and nearly around 75 percent of tea is produced on smallholdings, the productivity on smallholdings is about twice that in the estates.

Productivity

The productivity of tea on estates must be raised through considerable investments in the estates. Senile tea bushes must be replaced with vegetative propagated (VP) high productive tea, vacancies on estates must be filled by an extensive in-filling programme and labour productivity has to be enhanced by incentives.

Research

Research expenditure on tea must be increased to ensure a trend of increased productivity. This prerequisite for ensuring productivity is difficult owing to inadequate finances.

Productivity

However, increased productivity in tea would increase the exportable surplus of tea and enhance tea export earnings. In spite of the reduced export volumes, tea export earnings in rupees increased.

Importance of tea exports

The importance of tea exports lies in the fact that the import content of tea is considerably less than in manufactures. The net foreign earnings are higher than in most manufactures.

Concluding reflections

The significance of tea for the Sri Lankan economy has been underrated and there has been a neglect of the industry for decades. While the current shortfall in production could be arrested with the availability of fertilisers, weedicides and other agrochemicals, the achievement of increased production in the long run requires considerable investment, planning and research.

Tea could make a significant contribution to the nation’s external finances. The development of the tea industry should be viewed as a means to economic development.