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From the Editor: Rise Together
Sri Lanka's minister of plantation industries shoulders a great responsibility for the national economy and the welfare of its workers. He is well suited to the task.
Navin Dissanayake grew up in the shadow of a remarkable role model. His father, Gamini Dissanayake, was a charismatic member of parliament and a thought leader in the 1970s who oversaw the completion of the gigantic Mahaweli Hydropower project. The task was expected to take 30 years ― Dissanayake completed it in six, radically changing for the better the lives of his fellow citizens. At the peak of his political career, he was selected to run for president of the country. Just prior to the 1994 election he was assassinated by a suicide bomber. In eulogies, it was said that had he lived, he might well have been dubbed "the one leader who delivered the country from the 20th Century to the 21st."
Two years prior to his death Sri Lanka successfully privatized the nation's tea, rubber, and coconut plantations, giving regional plantation companies (RPCs) management responsibilities while retaining ownership as a "golden shareholder." Employment steadied at 200,000 workers. Smallholders today account for 73% of exports, a sharp contrast to the days when colonial plantations controlled this segment. Exports of the fabled Ceylon teas reached 300 million kilos in 2000. The country produced 10.5% of the world's tea at the time. Last year the island of tea produced 6% of the globe's supply. Exports rebounded in recent years but many of the nation's RPCs are losing money due to high production costs and rising wages (currently 65% of the cost of production). It looks unlikely Sri Lanka will meet its export goal of $5 billion by 2020.
Prime Minister Ranil Wickremesinghe says the country should not bear the brunt of RPC losses and he is weighing withdrawing financial incentives paid to producers exporting value-added tea. While 40% of exports are value-added, the tea is packaged under foreign-owned brand names, a practice detrimental to building the Ceylon tea brand.
In August, on the 150th anniversary of Ceylon tea, Wickremesinghe called on Dissanayake to deliver on Ceylon tea as his father did on the accelerated Mahaweli project. Dissanayake met privately with a press delegation that included STiR that week to describe his objectives. Under discussion is an action plan to stimulate replanting and better manage operations. The RPCs cannot be regulated into profitability, "we need to give them some time to breathe," he said.
Respected tea executives including Merrill J. Fernando want to replace RPC management with an independent authority run by ex-planters. "It is impractical for the government to control the largest industry in the country," said Fernando.
Dissanayake wants stakeholders to end a long period of disagreement and collaborate to retain Sri Lanka's competitive position in the global market. PRCs should operate like stand-alone companies, accountable for profits. Smallholders must adopt sound business practices. Sri Lanka should develop a better understanding of "what international markets want and cater accordingly." In addition to orthodox production, importing tea to blend should be considered. Replanting is critical, with SLRs 8 million ($52 million) to start.
Ultimately Sri Lanka must become attractive to outside investment, a challenge that cannot wait 30 years.
tea production tea Navin Dissanayake editor Dan Bolton Sri Lanka
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