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| Sunday, 29 February 2004 |
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Govts. blamed for setback in coconut industry by ELMO LEONARD Coconut growers blame successive governments for not encouraging the expansion of coconut plantations, while vast extents of land suitable for its cultivation in many parts of the island, remain idle. This led to the setback of the coconut industry, which for over a century maintained itself as the third "cash crop," the Coconut Growers Association of Sri Lanka (CGA) said. The recent 500-acre drip-irrigated coconut cultivation in Mahaweli areas, undertaken by the private sector, had proved highly feasible, growers said. "The problem is that governments are only interested in short-term projects," they said and lamented that vast areas in Anuradhapura, Vavuniya, Mannar and, even in the south and east, could be gainfully cultivated under drip-irrigation, where rainfall was insufficient. CGA President, Ranjith Dias, was adamant that the confirmed BOI project in Koggala, intended to extract vegetable oil from raw materials coming in from Malaysia and India, be scrapped. It is bad enough that under the project agreement, 20 percent of oil produced, could be sold in the home market, growers pointed out. In the Sri Lankan experience, "the 20 percent allowed" under BOI projects, end up with flooding the domestic market with foreign produce. A case in point is the 'export apparel industry' taking over the entire gamut of garments worn by people in the country and in the process, sinking even the humble custom tailoring industry. As a result, about 700,000 coconut growers and 2.8 million people dependant on the coconut industry would be severely affected. It would also be a big blow to the industry itself. In contrast, the CGA, numbering 800 members, most holding under 50 acres in extent, advocates the resuscitation of the coconut oil industry. CGA, champions the reactivation of the largely dormant 65 coconut oil mills in the country, to provide a boost to all sectors of this industry and the national economy. CGA condemns the policy of successive governments, which for decades, permitted imports of vegetable oil, to allow the coconut crop to feed desiccated coconut exports. From January 2003, the duty on imports of vegetable oil into the country stands at 15 per cent, resulting in the "coconut oil" consumed in an average home, being a high percentage mix of palm oil, from Malaysia. VAT charged on coconut oil, has further discouraged the production of the commodity. Only five or six large coconut oil mills are in production, according to the trade. The small-timers use the peelings or the brown of the kernel cut off from desiccated coconut manufacture, to turn out coconut oil. Coconut oil millers are known to avoid the payment of VAT absolving their act, on the grounds that otherwise, it would not be feasible to produce even the little coconut oil needed to give the coconut oil aroma to the largely palm oil, available, said millers who did not wish to be identified. Coconut oil is also being imported into the country; the world market price being far lower than the domestic price of Rs 75,000 per tonne. Today's farm-gate price of a coconut stands at Rs 8.50, wholesale price Rs 10, while the housewife in Colombo and the suburbs pays Rs 12 - 14, per curry nut. The CGA wants the government to ensure that the grower does not get a lower farm-gate price than Rs 8 per nut, to be conducive for fertiliser application. Poor returns is the main reason for coconut plantations being sold for development work, they said. In addition, the government acquires productive coconut lands for building industrial zones in the constituencies of politicians, instead of under-productive lands, Dias said. Under the 'Regaining Sri Lanka' programme, the fertiliser subsidy stands at Rs. 5,000 per tonne, which is commendable. The cess on exports of desiccated coconut of Re 1 per kilo should be increased and the money collected, used to assist growers increase coconut lands, CGA says. Also the excise duty on coconut based alcohol products (being Rs 750 million in 2003) should be made use of for the same purpose. |
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