direction for the tea industry
By Sunil Karunanayake
Our regular columnist on corporate and macro-economic issues stresses
the importance of the tea industry complying with new European food
safety standards in order to remain competitive in the global market
the increasing significance of industrial exports, the tea industry
continues to maintain its position as a leading player in the global
tea trade and a highly networked agro industry from corporate blue
chips to rural small growers. Tea sector’s contribution to
poverty reduction through employment is invaluable. Recent trends
to ensure food safety and food hygiene assuring the final customer
necessitates Sri Lanka to enhance quality and food safety features
to meet the challenges.
regulation (EC) 852/2004 of the European Parliament and of the council
of April 29, 2004 on the hygiene of food stuffs seeks to ensure
the hygiene of foodstuffs at all stages of the production process,
from primary production up to and including sale to the final consumer.
Food Business Operators (FBO) are required to apply the principles
of the system of hazard analysis and critical control points (HACCP)
introduced by the United Nations Food and Agriculture Organisation.
These regulations are expected to come in to force by early 2006
thus bringing the exports to EU under a strict quality regime.
is reliably understood that EU will be less stringent on the implementation
date for primary production, nevertheless they recommend that the
industry continue to upgrade towards HACCP by using appropriate
hygiene practices even at the small plantation level. Formal certification
is any how a powerful tool in the market place.
of a HACCP programme revolves around motivating employees and training
and educating them in food safety principles. This brings an enormous
challenge for the local tea industry covering all segments of the
supply chain. Some factories and few exporters have already met
these compliance levels but the majority are yet not focused.
legislations in developed countries shift the responsibility of
maintaining quality standards to the manufacturer as well as to
other supply chain partners. An effective food safety management
system will be built upon Good Agricultural Practices (GA),Good
Manufacturing Practices (GMP) and Good Hygienic Practices(GHP).Compliance
will be rewarded with competitive advantage in a global market.
2004 there was quite a concern in the Sri Lankan garment trade on
the impending withdrawal of the quota system and the anticipated
fierce competition. Quite rightly the private trade and the government
jointly took a series of measures to protect Sri Lanka’s position
in this challenging environment.
initiatives no doubt have paid rich dividends and according to the
latest Central Bank information the 2005 exports of textiles and
garments has grown by 8.2 per cent to US$1326 million accounting
for 33% of the export growth in the first half of 2005.As a further
boost to the industry government recently initiated a credit guarantee
scheme through the Central Bank to facilitate the commercial bank
lending to the garment sector to upgrade their infrastructure and
modernization to comply with quality standards.
task ahead for the tea sector is even tougher as the country has
over 600 tea manufacturing units (factories) of which most are relatively
old in comparison to the garment factories. More than half of these
factories belong to the non corporate sector and a majority of them
needs heavy inputs to meet the required upgrading.
inequality of the resource base of these manufacturers as well as
other supply chain partners necessarily demands government assistance
in funding the initial phases. This should not be difficult given
the significant revenue government receives from the tea export
cess. Food science is now gaining priority and the recently developed
resources of the universities of Sri Jayawardenapura and Peradeniya
could be utilized to assist the tea sector.
Association of Sri Lanka (TASL) in 2003 initiated a programme with
donor funding to launch a quality certification programme which
resulted in a significant improvement in the products and such products
also attracted premium prices. TASL is continuing their drive for
quality improvement with training programmes for managers as well
as factory personnel of tea manufacturing units.
programmes have already been held this year. Tea Board too has set
up an award scheme for tea factories based on the Japanese “5-S”
system. However the adequacy of these measures to the immediate
need is questionable.
long the authorities have considered tea revenue as a constant assured
steady flow of income and the fiscal environment too has been less
conducive. Quality and food safety demands are a global phenomenon
and before long other major buyers such as CIS and the Arab countries
are likely to follow with stringent quality requirements. The European
legislation is a wake up call to all stakeholders of the tea sector.
(The writer could be reached at - email@example.com)