Government mulls on granting new leases to well-performing RPCs

In order to implement the agricultural modernisation plan, the government plans to grant new leases to well-performing Regional Plantations Companies (RPC), with ownership transfer restrictions in place. 

According to the President’s Media Division, during a recent meeting held at the Presidential Secretariat in Colombo, President Ranil Wickremesinghe extensively highlighted the expiring leases of the RPCs, which are due in 10-15 years, as a main challenge for the government’s agricultural modernisation plan.

Therefore, he stressed that the government must offer new leases to the RPCs, in order to move ahead with the agricultural modernisation plan. However, he was against offering new leases to the RPCs that have failed to perform over the years. 

In order to find a basis to grant new leases, Wickremesinghe has instructed the members of the Plantation Reform Committee (PRC) to update the survey conducted in 2018, to assess the performance of the companies and determine the basis for granting new leases.

PRC Chairman and Senior Advisor to President on Economic Policy Implementation R. Paskaralingam and the other members of the PRC, including Vish Govindasamy, Dr. Romesh Dias Bandaranaike, Charitha Ratwatte, Niraj de Mel, Chrisantha Perera, Lionel Herath, Sanjaya Herath, Dr. Rohan Fernando, Leon Fonseka, Leelanath Wickramaarachchi, Tharangani Wickramasinghe and Srimal Wijesekera, took part in this discussion. 

In the 2018 assessment report, the RPCs were categorised into the A, B, C and D categories, based on their performances. At the time, the government was considering to extend the leases of the RPCs in Category A, while cancelling the leases for poorly-performing RPCs. The report found a large drop in crop, due to lack of replanting and poor management by the RPCs. However, the findings of the report were questioned by the RPCs.

Under the new lease agreements, Wickremesinghe suggested that the companies should not be allowed to sell their shareholdings without the consent of the government, once they have been vested with the land. 

As agriculture is transforming into agribusinesses with modernisation, he asked the PRC to share views on the matter. In 1992, the government transferred the management of large state-owned plantations to selected private sector companies. Subsequently, the government set up 23 RPCs in 1995 and 20 were given to the management of the private sector for a 53-year period and the government continued to maintain the management of three of them.