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.