Outsource production calls in high-cost tea sector

A tea plantation specialist working for the state is urging the tea industry to shift to a total outsourcing of production systems and concentrate on promotion, processing and marketing or face a major disaster.

The conventional estate system, introduced by the British is gradually becoming inappropriate to meet the demands of the corporate sector of the tea industry.

“The present management should move away from direct production and concentrate on processing, trading and marketing while the field activities should be entrusted to the out-growers and perhaps worker co-operatives where the land and labour productivity are reportedly higher,” said Abeynanda Dias, Director of the Plantation Management Monitoring Division at the Ministry of Plantation Industries, who says the large plantation sector is fast headed towards a major crisis due to the high cost of production resulting in the inability to investment in development programmes to sustain the industry.

“This in turn will create a serious impact on the massive work force of approximately 300,000 people and their dependents numbering to as much as 1.2 million,” he said in an article highlighting the plight of the industry which appears on page 2.

Dias, a former CEO of Elkaduwa Plantations Ltd and a former Director General of the Sri Lanka Tea Board, said the conventional colonial system of estates are unviable in meeting the present demands of the corporate tea sector.

He suggests that corporate ownership, high capital base and a large labour force should be replaced by small holdings or an out-grower system, where weaker areas could be gradually shifted to the workers for their effective participation and thereby convert these areas to be the more productive land for the continuation of the industry.

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