Fertiliser prices slashed to help prop tea industry

By Madhushala Senaratne

In response to growing demands from tea small-holders, the government has announced that it will reduce the price of tea fertiliser from next month as one of several relief measures to help the declining tea industry.

From next month, a 50-kilogram bag of fertiliser will be priced at Rs. 1,000, said Plantation Industries Minister D. M. Jayaratna. A 50-kg bag of fertiliser now costs between Rs. 5,200 and Rs. 5,600, in 2005, a bag cost Rs. 760.

The Minister said discussions were under way with Russia, Kazakhstan and countries in the Middle East to exchange tea for essential commodities. “We hope to exchange tea and rubber for oil,” Minister Jayaratne said. “We are drafting a memorandum of understanding. According to the agreement, the countries will buy tea directly from Sri Lanka.”

Last week, a series of protest meetings were held on small tea estates in different parts of the country, including Ratnapura, Gampola, Kalutara and Galle. Protestors called for immediate action to resolve the crisis in the tea industry.

Tea was once a thriving industry, and Sri Lanka’s number one export, but in recent years there has seen a sharp decline in production. This year local tea production dropped by 50 per cent, according to Nanda Muruttetuwegama, convenor for the National Front for the Protection of Tea Small Holders. “Six months ago one hectare of tea yielded 1,000 to 1,200 kilos of tea; today production is just 500 kilo,” he said.
The main reasons for the decline were increases in the cost of production, a lack of subsidies for re-planting, and the government’s failure to adequately address these problems, he said.

There are more than 500,000 tea small holders, and more than three million Sri Lankans depend on the tea industry, directly or indirectly, for their livelihood.

MP Chandrasena Wijesinghe, convener of the JVP-led Joint Federation of Tea Small Holders, said the import of low quality tea should be stopped. Sri Lanka imported Rs. 2.7 billion worth of low quality tea in 2007.

Some of this low-quality imported tea is sold under well-known labels, Mr. Wijesinghe said, and this has undermined the value of certain tea brands. The Tea Small Holders Development Authority general manager S. D. Nandasena promised that tea small holders would get a better deal next year.

“A better price formula can be expected by January, and tea auction prices should be satisfactory by that time,” he said.

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