Sustaining tea for $ 1 b target a challenge - Dr. Kelegama

Sustaining the tea industry with the cooperation of the Government and the private sector to make it a US$ one billion industry is the primary challenge of the tea industry said Director, Institute of Policy Studies Dr. Saman Kelegama.

He was addressing the Tea Convention workshop on Friday organised by the Colombo Tea Traders' Association.

Dr. Kelegama said increasing the quantity of value added tea exports by reversing the current proportion is vital for the growth of the industry.

Over 65 percent of the exported tea is in bulk form. The industry must look at increasing the low quantity of value added tea to compete with emerging tea exporting countries.

"Modernisation of tea factories, adopting good agricultural practices, technical support and conforming to labour norms are vital for the transformation of the industry", Dr. Kelegama said.

He said Sri Lanka has not fully made use of the two bilateral trade agreements reached with India and Pakistan.

"Trade with India was affected due to port allocations and anti lobbying but we need to change the negative approach that the industry cannot compete with Indian markets. We must compete with value added products and increase the market share", he said.

Ceylon Tea exports account for only around 3.5 million kilograms to Pakistan despite the duty free access. Kenya exports around 98 million kilograms to Pakistan which is around 65 percent of Pakistan's tea imports.

Dr. Kelegama said the cess funds not directed at the industry is a major obstacle to develop the industry.

The tea industry needs a large amount of money to carry out promotions and implement other development activities.

"Tea cess funds which are around Rs. 760 million need to be increased and channelled directly to the industry for promotional and development activities similar to what is now being introduced in the new Tourism Act", he said.

Dr. Kelegama said lack of motivation, use of old seedlings, poor soil conditions and lack of technical guidance have resulted in the drop in tea productivity.

LF