Tea, rubber exports hit US$ 2 b mark:

Socio-economic welfare measures in the offing- Minister Mahinda Samarasinghe

By P. Krishnasamy

The two main plantation crops, tea and rubber, are doing well fetching high prices in the world market and research-based plans have been launched for the long-term sustainability and productivity of the crops, Minister of Plantation Industries Mahinda Samarasinghe told the Sunday Observer in an exclusive interview.

In tea and rubber exports, the country has hit the 1.2 billion US$ annual export level producing the world's cleanest and healthiest tea, he pointed out. With regard to the socio-economic welfare of the plantation workers, more programs to supplement the existing programs have been envisaged by his Ministry, he said. Such programs include support for a medical insurance scheme, assistance for the higher education of the children of the plantation workers, increased facilities in their living quarters and assistance to construct their own houses, he said.

The Ministry of Plantation Industries has always been supportive of the Mahinda Chintana concept of "Api Wawamu, Rata Nagamu" and in terms of it small plots of land for vegetable gardening will be provided to the estate workers and with assistance also for rearing cattle, poultry farming and cultivation of cash crops. His Ministry has initiated effective measures to overcome the transient crisis that the coconut industry encountered due to a disease in the down South and war in the North and East, the Minister said.

Excerpts of the interview:

Q:The Government handed over the plantation estates to the plantation management companies in 1992. Can you please explain in what manner this has benefited the plantation industry and also the plantation workers during the last 19 years?

A: After the nationalisation, tea plantation sector deteriorated gradually in management and started incurring heavy losses and came to a point where the then management had to borrow billions of rupees from the Government. Immediately after the privatization, the borrowing was stopped which was a great relief to the economy. Since privatization, over time the plantation sector management under the regional plantation companies improved gradually through revitalization of the crop, modernisation of the factories, development of infrastructure, etc. So, therefore, I can tell you this move has certainly benefited the country and the industry by assuring stability in production, marketing and exporting. Today we have hit 1.2 billion US$ annual export level.

Before privatisation in 1992, estates' collective losses of Rs.1.7 billion, turned into collective profit of Rs.1.6 billion in 2000 under the privatized management, thus relieving the Government Treasury from supporting the sector. With divestment and assistance from the Government sponsored projects, the yields of the plantation companies have increased 3% while rubber yield has stabilized.

Not only the plantation sector national economy, the other important component, the workers, also have immensely benefited over the last two decades and according to the survey and data available with us the livelihood of plantation workers has increased manifold and their living conditions have improved substantially. Access to school, water, healthcare and other social needs, including improved housing and rest rooms have been provided. According to some of the statistics the infant mortality rate has substantially reduced. When you study the human development indicators there has been a substantial improvement in the estate sector during the last 15 years. The estate health bulletin shows improved health trends with the steady decline in crude death rate and infant mortality rate in the estates according to the Plantation Human Development Trust (PHDT 2005 report). Literacy in the estate sector has improved from 68.5 in 1986/87 to 81.3 in 2003/4 with the gap between the estate and the urban and rural sectors narrowing during this period. Of course this sector still lags behind some of the other sectors in areas like weight at birth etc. There has been tremendous improvement in health system for the plantation workers as each estate has its own Doctor, estate medical officer, hospital, dispensary and maternity ward. There have been many efforts to improve the housing program through many projects. In addition, these moves have brought about an important change in the management's attitude toward the workers.

Q: Is the Government having control over the Plantation Management Companies in relation to their activities, management and industrial relations that have a direct impact on the industry?

A: Regarding control over the plantation management companies, since I took over, I have realised our Ministry has not been very effective in monitoring some of the important activities as the 'Golden Shareholder' on behalf of the Government. Having realised that, I have already initiated action to strengthen the capacity and capability of the Ministry to regularly monitor the important activities of the plantation companies which are very vital for the sustainability of the industry and its long-term contribution to the national economy. I am confident that within the next few months we will have a more effective monitoring of management companies.

Q: Did you hold discussions with the plantation management companies or with their representatives after assuming office as Minister of Plantation Industries? Can you please tell what was the main focus of the discussions?

A: Since I took over about two months back, I have had meetings with all the stakeholders at different levels and have identified many constrains and challenges, and I have initiated the second phase of discussion to take action on important matters immediately. I have also met with my Ministry stakeholders related to tea, i.e. Tea Board, TRI and TSHDA and have identified urgent needs such as need to amend statutory board acts, recruitment of staff and need for funds, etc. I had a successful meeting with the Secretary to the Treasury regarding both the funding situation and future sustainability of the industry and I am happy to note that I have received a positive response from the Secretary to the Treasury. The focus of my discussions with the stakeholders was on the need to enhance the replanting rate which is at present far below the recommended rate of 2%, need for factory modernization in order to have all factories certified to meet export demands, reduction of post-harvest losses through introduction of good transportation system and use of plastic crates, etc. The emphasis was on promoting Pure Ceylon Tea and increasing the value rate added percentage from 35 to 65 percent and also the need to improve the living standards of estate workers. I have also discussed with them the need to remain competitive in the world market by reducing the cost of production and also to face future labour shortages through mechanization and to try out a new concept of establishing an outgrower system.

I have met with the Chief Executive Officers and Directors of the plantation management companies several times during the last couple of months. I invited them for discussions held separately at the tea, rubber and coconut research institutes to interact with scientists to get maximum use from the institutes. Plantation companies also have requested for long term loan facilities at a concessionary interest rate which I am discussing with the Treasury.

Q: Are we successfully competing in the world market with other tea producing countries like India, Kenya and China?

A: Certainly yes. Today Colombo Auction records the highest tea prices in the world indicating that Ceylon Tea is doing well. We have been able to achieve this price because of our quality of tea and also we are still known to produce the world's cleanest and healthiest tea.

Q: Are you optimistic that we will continue to maintain the quality of our tea as the world's best and the most popular?

A: I am very optimistic about our capacity and capability to continue to maintain the quality of our tea as the world's best and most popular. I have proposed many strategies to ensure the standards of manufacturing, quality of leaves and health aspects of our tea. We have been able to meet the European, Japanese and US health standards on maximum residue levels through the efforts of the Tea Research Institute and I am also happy to record here that we have established a pesticide residue analysis laboratory at the Tea Board where we are capable today of analysing our tea samples instead of sending them to Germany as was done before.

Q: What is the state of the plantation estates that are under the management of the State Plantation Corporation and the JANAWASAMA?

A: Well, the State Plantations Corporation and the Janawasama are not coming under the purview of my Ministry. Therefore, I am unable to comment about their performance. However, the Government has taken action to run them as viable enterprises through another Ministry. My Ministry is providing technical support through our research and development units at Hantane where most of the estates are located.

Q: Under the UPFA Government much has been done for the socio-economic uplift of the impoverished plantation workers. Can you please tell what future programs are envisaged for their welfare?

A: During the last several years the Government has done so much through ADB funding and the Plantation Development Projects to uplift the socio-economic conditions of the plantation workers. My Ministry has many future plans to initiate projects to further improve their living conditions and enhance their income. One such project is the outgrower project.

Q: Assurances were given by successive governments that the ownership of the living quarters and the small plots of vegetable gardens of the estate workers would be vested on them. Will it be fulfilled by the UPFA Government?

A: Present line houses with the gardens where they grow vegetables has been vested with the Worker Housing Cooperative Society which is a community-based organisation with the workers holding office in it. This has been done to stop them selling the houses and the gardens to outsiders. They can only sell to the Society.

Q: There is wide-spread discontent among the plantation workers that the plantation managements are imposing stringent norms and conditions thereby depriving them of the wages agreed to under the Collective Agreement. Will you, in due course, take up this matter with the plantation management companies to offer redress to the workers ?

A: With the recent wage increase under the Collective Agreement, the Government and the plantation managements had to ensure that the wage increase is linked with productivity. You must remember that the cost of production of our tea is the highest in the world. For us to remain competitive in the world market, we have to ensure that our productivity levels go up with the increase of wages. Earlier we had a static norm, but now we have introduced a variable norm between 14 - 18 and the other incentive is Rs.90/- per day for above 75% attendance.

I am also aware that some companies are not adhering to the variable norm and there is some dissatisfaction among the workers. This will be rectified through discussions.

Q: Do you think that green tea will substitute the traditional tea and are we successful in producing and marketing green tea?

A: Yes. There is a belief that green tea is better than black tea. Green tea producing countries have done a lot of research before us on health benefits and they are promoting green tea. However, it should be noted that we are getting high price in the world market for our tea because of the popularity of our orthodox black teas. Sri Lanka has many kinds of speciality teas based on elevation of plantation estates, climatic regions, etc. like Uva tea, Nuwara Eliya tea, Dimbulla tea and low-country tea. So we do not expect Green Tea to completely replace black tea. We already produce green tea in 15 factories. We have the capacity to change according to future changes and demands in the world market as the TRI has already produced suitable cultivars for high quality green tea production.

Q: Tea is now known as containing high concentration of anti-oxidants and also as a brain-relaxer. Have our Tea Board and foreign missions taken steps to give publicity to this finding and to promote our tea?

A: Health properties in our tea is being strongly promoted by our Tea Board jointly with the TRI research activities. Recent findings of the presence of high levels of anti-oxidants and brain relaxation compound L-Theanine, is a great finding to further promote our tea globally. It must be remembered that health properties of black tea is equal to those of green tea. The Tea Board has taken action to spread this message across the world through our Foreign Missions. They are conducting awareness seminars for Mission members. Q: Please explain the steps being initiated to ensure the long-term sustainability of the rubber industry and the steps being taken to start rubber planting in parts of the Northern Province that have been identified as suitable for the purpose ?

A: In the Northern province, some parts of the districts of Kilinochchi and Vavuniya are identified as suitable for rubber cultivation. After the initial testing of soil and scrutinizing climatic and geographical factors by the RRISL, it is planned to initiate the cultivation at adaptive research level as follows:

Q: About Government plans to start industrial complexes to utilize our rubber for making based products?

A: RDDD plans to reinstate the factory modernization subsidy scheme. Through this scheme factories of regional plantation companies can improve the factory infrastructure through installation of latest and efficient machineries and equipment and undertaking repairs to the existing ones.