ISSN: 1391 - 0531
Sunday, February 18, 2007
Vol. 41 - No 38
Financial Times  

Tea industry slams authorities for political meddling with tea cess

The Colombo Tea Traders Association (CTTA) has slammed governments, present and past, for wasting funds from the tea cess on politically-motivated projects rather than channelling it to the industry and says it hopes the new minister will rectify this flaw.

“Whatever funds that are ploughed back into the industry are, for the most part, being squandered on maintaining exceedingly over-staffed, largely unproductive, State institutions, associated with industry sectors, which serve as a useful vote-base for successive governments. This brings no return to the industry and merely subsidizes the livelihood of political supporters of respective parties in power,” a CTTA statement said.

In this context -- after having failed on several previous occasions – the association said it hopes the new Plantation Industries Minister D.M. Jayaratne will ensure that the tea cess is used intensively for the needs of the industry, now that the portfolio has been restored to cabinet status. It said the association has long been concerned that the funds collected on tea exports which are meant to be disbursed exclusively for industry purposes, are not being put to best use, in the context of the needs and the benefit of the industry. Enhancing productivity, promoting Sri Lankan owned brands, stimulating value added exports, facilitating food hygiene initiatives and supplementing research and analysis programmes are some of the priority areas identified by the industry for the investment of these funds, the CTTA said.

The current cess levy imposed on tea exports is Rs.4 per kg. and when one considers that, on average, over 300 million kgs. of tea are exported each year, the numbers are substantial. “Originally, these funds were directly assigned to and controlled by the line ministry.

However, now, they are dispensed to the Ministry of Plantation Industries by the state fiscal authority, in irregular installments, with a progressively increasing share, which presently amounts to almost a third, being retained for other purposes, depriving the industry of desperately required financial assistance,” it said.

The CTTA has been agitating for many years, to no avail, for representation on the Tea Cess Committee, which determines the distribution of these funds, so as to be able to exert some influence on their allocation and disbursement. However, these persistent appeals have fallen on deaf ears.

“The CTTA cannot understand the reluctance of the Ministry of Plantation Industries to acquiesce to this request, as the rubber and coconut industries have already been granted such representation on their respective Cess Committees and contribute positively to the appropriate use of the funds, through their intimate knowledge of the industries.

The export sector of the tea industry can do likewise, if given the opportunity. Instead, they are disillusioned that funds extracted involuntarily from them are employed injudiciously, without any reference to the ‘donors’,” the statement said.

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Copyright 2007 Wijeya Newspapers Ltd.Colombo. Sri Lanka.