Are policy makers neglecting the plantation sector?
In the major rubber growing plantation companies in the country, the productivity levels achieved in has declined by around 50 per cent in 2025. For example, in three plantation groups (each group consisting of around 1,000 hectares (ha) of mature rubber the yield levels have dropped to 608, 644 and 659 kg per ha per annum in 2025 from 1,363, 1380 and 1,235 recorded in 2020 respectively. Further, this drastic decline in land productivity is in the background of escalating costs, i.e. worker wages and agro-chemicals, with no corresponding increases in selling prices. This scenario in the rubber plantation sector will significantly lower the revenue generated whilst increasing the expenditure leading to unhealthy cashflows and low investments in the sector.
In Sri Lanka, commercial planting of rubber has taken place uninterruptedly since its inception in 1883, i.e. around seven years after the crop was first introduced to the country in 1876. The year 2026 marks a century and a half of years since first rubber seedlings were introduced to the country. It is from Sri Lanka that the natural rubber cultivations had spread to the present-day giants of the industry in the Asian region. From commencement, the natural rubber industry in Sri Lanka has played key role in the economic development of the country, employment generation and mitigating impacts of climate change.
Together with the declining trend in the natural rubber plantation sector, the industry as a whole in the country is also showing a similar trend. The total national rubber production of the country has declined from 98,600 to 69,200 metric tonnes (mt) from 2014 to 2024. During the same period the land extent under rubber has also come down from 133,000 to 84,000 ha. Accordingly, natural rubber production and land extent of the country have shown a negative growth of 2.98 per cent and 3.68 per cent per annum respectively during this 10-year period. If this trend is allowed to continue, an industry that had earned more than a US$1 dollars per annum in foreign exchange whilst supporting the livelihood of thousands of families and servicing our natural environment may get eliminated.
Whilst the rubber industry in Sri Lanka is experiencing a declining trend, the global natural rubber (NR) industry (currently valued at approximately $17-32 billion), is growing at 4 to 5 per cent compound annual growth rate. Global rubber industry is pivoting toward sustainability, digital traceability and supply chain diversification to counter the challenges the industry is facing. Some recent key developments of the industry include the rise of eco-friendly and certified rubber, increased production in West Africa and Northeast India, and the adoption of precision agriculture to manage climate-related yield risks. Hence, it is apparent that the Sri Lankan and global rubber industries are showing contrasting trends with regard to growth. Thus, it is obvious that the reasons for the gloomy trends and status of the industry in Sri Lanka is due to our inefficiencies and policies rather than external factors. If Sri Lanka does not fall in line with other leading natural rubber producing countries in the globe, we may very soon lose the recognition had as a key player in the global natural rubber industry whilst losing the level of economic benefits we accrued in the past.
Sri Lankan natural rubber producers face higher worker wages than its competitors, chronic labour shortages, increased cost of agro-chemicals, increasing pest and disease issues and other challenges caused by climate change related aspects. Planting of rubber over and over again in the same land for three to four generations of rubber have degraded the fertility of soils. The more recent Pestalotiopsis leaf disease and increasing trends in the incidence of tapping panel dryness (TPD) in novel rubber clones recommended to the industry are also causing severe productivity losses.
Further, in addition to these issues the plantation sector of the country is facing uncertainties with regard to how worker wages are determined, remaining period of the existing lease and policies on crop selection for investment. The instability of the plantation sector caused by these factors need to be addressed to revitalise and realise positive growth in the sector. The government must address policy-related issues identified above and create a sense of confidence for the plantation management companies and thereby drive willingness to invest in the long-term which is a feature of the plantation industry.
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