Sri Lanka unveils blueprint to transform outdated plantation sector to thriving agro-business

• President says SL does not need plantations, but thriving agro-business
• Tea Research Institute expected to play major role in modernising tea industry
• Plans underway to restructure both Sri Lanka Tea Board (SLTB) and Tea Small Holdings Development Authority

By Nishel Fernando 

President Ranil Wickremesinghe yesterday unveiled a blueprint to transform the country’s outdated plantation sector towards a modern and thriving agro-business by rolling out a slew of major reforms with an inside-out approach. 

Key pillars of this strategy includes ending the colonial era ‘line-room’ culture which has bounded estate workers to the estates and a potential revenue sharing model between managing company and workers.

“I don’t think we need plantations; we need a thriving agro-business, lot of ground holders and a large management company that will look at the highest earning possible. We are going to start reforming from inside,” President Wickremesinghe said, addressing the Colombo International Tea Convention (CITC) 2024 in Colombo yesterday.

In order to ensure this shift, Wickremesinghe shared plans to setup villages by breaking estates from living areas of plantation communities. 

“We will extract all the line rooms and surrounding areas,  take it back to the government and re-gazette them as villages. So that the line room concept will disappear as people start building up. If you go the coconut estates, we don’t have anyone living in that land that belongs to the plantation,” he told a fully packed audience of over 750 international and local delegates.

According to him, this ‘line-room’ culture has attributed to high rate of multi-dimensional poverty indicators in Nuwara–Eliya which remains above war-torn areas in Northern Province. 

Meanwhile, President indicated the government openness to allow other high yielding cash crops with plans to bring more lands to agri-businesses.

“What’s the model of our enterprises? Are we only going to stay in tea or are we going to allow smart agriculture in your areas? In time to come, there will be land opened out in other parts of the country for agri-businesses,” he said. 

The government is also exploring ways and means to revive SME agri businesses saddled with high debt.
Moving forward, Tea Research Institute (TRI) is expected to play a major role in modernising the Ceylon Tea industry staying aligned with latest global consumer trends, with possible joint ventures with the private sector. Further, plans are underway to restructure both Sri Lanka Tea Board (SLTB) and Tea Small Holdings Development Authority under this strategy.  

Fresh look on Russia only after US elections

President Ranil Wickremesinghe highlighted that the US and European Union (EU) imposed sanctions on Russia, a key market for Ceylon tea, remains a challenge in carrying out trade activities and needs to be addressed.

A fresh look at this matter can only be considered after decisive President Election in the United States (US) on November 5 this year, he said.  The Republican Party Nominee Former President Donald Trump has announced plans to end the conflict between Russia and Ukraine through negotiations, while Democratic Party which is yet to officially nominate candidate is expected to further escalate the conflict. 

“The problem is for those of us who have to trade with Russia. Maybe, we will require a new look and we have to wait for the outcome of the U.S Presidential elections. Until then, you have to use your means to get your tea across to Russia, which I should not know,” he said. 

ickremesinghe stressed that Sri Lanka must maintain its dominating position in the global market, and efforts must be made to ensure local firms expanding into other countries  do not hurt Ceylon Tea’s market share adversely.

“Some of our companies have gone abroad, they have also established themselves elsewhere, that’s not a problem, as long as we are the largest player in the game,” he added. 

Calls on stakeholders to resolve estate wage issue 

The need to resolve the wage issue in the plantation sector came under focus, after a government decision was made to cancel the earlier issued Gazette notification increasing the daily minimum wage of an estate worker for the tea and rubber industries to Rs. 1,700.

“You have to remember those who work in the plantations are people who had the worst case of bankruptcy in the country ,” Wickremesinghe said, urging plantation sector stakeholders to actively look at ironing out issues in this regard.

On July 10, Minister of Labour, Secretary to the Ministry of Labour and Foreign Employment and Foreign Employment and Commissioner General of Labour issued  a notification cancelling the earlier issued Gazette increasing the daily minimum wage of an estate worker by 70 percent.

This was following legal battles where 21 regional plantation companies secured a writ order invalidating the Gazette notification. In addition, the Supreme Court also issued an interim injunction preventing the implementation of the Gazette on increasing the daily minimum wage of estate workers.