Plantations minister says errant RPCs will be given last chance to reform

Following is based on the speech delivered by Plantations Industries Minister Navin Dissanayake at the National Institute of Plantations Management (NIPM) National Symposium.

Addressing the first seminar on sustainability of plantation management, organised by the NIPM at its auditorium, on March 10, Dissanayake made a seminal speech that needs wide attention of the plantation industry leaders, policymakers and other stakeholders. 

The event was attended by international management experts including University of Siam President Dr. Ponchai Mongkhhonvanit, renowned academics, researchers and CEOs of the regional plantation companies (RPCs) and other plantation industry members. 

A number of research papers relevant to tree crops management were presented and the best presenters were rewarded with awards after a rigorous selection process. Hashini Gunasekera received the best presenter’s award for her lucid presentation, which scientifically established the underutilized value of cashew apples as a nutritious source of anti-oxidants.     

The minister commended the NIPM for organising this event, explained its relevance to the present context of increased global sustainability focus and welcomed all international guests, distinguished professionals and policymakers who are veterans in their own fields.

He defined the often repeated and fashionable concept of sustainability in the context of plantations and identified as a vital ingredient in plantation management. Plantation management denotes effective use of scarce resources to increase production while strengthening the plantation asset base while increasing the profitability in an ethical manner. 

According to the minister, ethical behaviour is the most valuable driver, which is unfortunately observed in the breach. What is seen often is, exploitation of labour, appropriation of profits in unethical ways, accumulating profits through dishonest means. 

He stressed the fact that sustainability is truly the value proposition of plantations, which is a core value in plantation management. Referring to a certain degree of exploitation that is going on, he reminded the need to sustain ethical practices when dealing with valuable human resources protecting them.   

Earlier, Roshan Rajadurai, Managing Director of three leading RPCs, explained the steps they have taken to enhance the productivity in plantations. The minister, however, observed that at every forum, the RPCs make vain attempts to give a very rosy generalized picture of their plans, investments and performance.

The minister disagrees making his frank observations and said that the problem is, yes they do certain creditable things but that is barely sufficient to assure true sustainability. There is a serious crisis blooming in the plantation sector and those troubled RPCs cannot take an ostrich approach and heap self-praise on themselves. 

Dissanayake offered a logical explanation categorizing the RPCs under three broad models. The first group or the apex comprises of four or five superior performers, who produce consistently good results in terms of investments, profitability and in all aspects of sustainability, perhaps bordering on excellence, amply justify the government strategy of privatizing the plantations. These are owned and managed by a sub-set of far-sighted and enlightened entrepreneurs who do not compromise national interests. 

The third or the bottom layer is made up of owners who exploit, extract and exhaust the assets of the respective plantations without making any worthwhile investments or improvements. They probably live in the colonial era and might abandon the RPCs when the mines cease to yield gold any further. Actions and inaction of this group pull the plantation industry downhill continuously and has become deadweight on others who are forging ahead. 

The second or intermediate group consists of mediocre performers who are yet undecided, erratic and uninitiated dependent wholly on auctions, commodity price cycles and the mercy of weather gods for profits. Probably the RPCs came into their hands by accident. The government is in a dilemma now as we want to improve the livelihoods and quality of life of millions of vulnerable workers living in plantations. What shall we do?  

“We cannot condone this existing dysfunctional industry structure any longer,” the minister emphasized. 

“Restructuring is inevitable and is in fact long overdue. Our policy is to provide policy incentives to those good performers in category one. I hesitate to call them excellent performers as they can surely do very much better to reach sustainable global competitiveness. We will anyway add judicious disincentives to underperform. 

The middle group will have to awaken from their slumber and we will throw buckets of icy cold water on them until they begin to climb up the ladder. We shall introduce an effective regime of monitoring and course corrections based on expert advice while leaving management autonomy in their own hands. We will be closely watching. The third category of footloose scammers or exploiters will be taken to task in the name of our nation. They will be given a last chance to reform. Unless they change, the RPCs will change hands. This is an ultimatum. 

To help RPCs to overcome the muddle, since they are not taking the initiative by themselves as responsible corporate citizens, learning from the best, we will introduce new management models that are to be developed collaboratively and not arbitrarily. 

Implementation will be done not by force but through consultation, frank dialogue and effective legislation to be followed by constant monitoring by handpicked specialists with sufficient authority. These programmes will have necessary and sufficient checks and balances applicable to the entire sector. 

Good governance will be a keyword. Transparency, honesty and integrity need to be the principles of plantation culture. For errant, there will be no place in our agenda. Ours is a national agenda for plantation and people development. We mean business this time, the minister eloquently stressed. He wished that the faltering RPCs would become saner soon.”   

Learning from Japan
Dissanayake congratulated Prof. H.D. Karunarathna from the University of Colombo for the brilliant presentation he made making a fascination comparison between Japan and Sri Lanka using a set of critical data, which revealed weaknesses in Sri Lanka’s systems and development strategies.

Prof. Karunarathna proved that Sri Lanka has a dearth of businessmen or entrepreneurs who are the backbone of an economy. On the contrary, Sri Lanka has a large pool of people who prefer to be paid employees. Entrepreneurship, financial literacy and business sense in lacking among them. They also think that the government must provide them with pensionable employment opportunities. In response, the comments made by the minister in his speech were erudite and were highly appreciated by the audience.

The minister identified himself as an ardent admirer of Japan and explained the industrialization process in Japan, which was accelerated during over the four-decade long Meiji restoration started in 1860s. Emperor Meiji catalyzed the industrial age in Japan as they were compelled to do so as a strategy to thwart frequent foreign enemy attacks.

The constitution was changed to remove feudalistic characteristics of the government. Emperor Meiji engaged a team of young samurais to lead this transformation in industry, agriculture, infrastructure, communication including social reforms. Brilliant students were sent overseas to learn new technologies and foreign experts were brought in to enhance local technological and management capabilities.

Industries and economic activities were subsidized. It was the first Asian country that was able to compete with the Europeans. They started building aircraft and ships in thousands. Japan became a world power after the First World War having won wars against China and Russia earlier. They advanced their education and culture to inculcate a work ethic that is conducive to innovation, productivity and discipline.

Japanese children are conditioned from very early stages in their life. They are loyal to their organisations and work truly hard. In essence the Meiji restoration was brought about by an ambitious set of young leaders led by a young emperor supported by young generation transformed and talented. “Who leads in Sri Lanka,” the minister queried?   

“There are vast differences between Sri Lanka and Japan in terms of literacy, education and work ethics. What is the value of so-called literacy in an economy unless it can add socio-economic value? Our free education and high literacy has not afforded our young generation employability, higher wages and future prospects. We need people who think differently.

Real value is in the difference. Rote learning and the type of public exams we conduct produce stereotypes. They are unable to challenge the status quo. They are as good as slaves in a modern competitive economy. The British education system was appropriate for the administration of colonies and subjects. It killed our inborn entrepreneurship, national pride and affinity for self-reliance. 

As a proud nation, we were highly self-reliant, environmentally responsible and socially conscious. The NIPM is trying to educate plantation managers on sustainability but we were an exemplarily sustainable nation. There was no need to teach sustainability to our kings and people. That was an integral part of their thinking, lives and culture. They thrived as a sustainable nation. What has happened today? 

We have become a fragmented nation of beggars surviving on amassing mountains of loans hanging on our children’s heads. Our people, the majority of course, feel comfortable to depend on government subsidies or handouts from birth to death. When you receive government subsidies, you relegate your self-respect to the sewer. Of course we drink, dance and enjoy life wherever possible. Is there a thing called free lunch?        

No government can provide jobs for all school leavers and graduates. It is impossible, impractical and unsustainable. Instead we should introduce a very sound modern education policy that is fair and farsighted that suits futuristic socio-economic needs to make our people true economic agents and not slavish free riders. As a result of our education policy, they have become thoroughly dependent on government. 

Subsidies, services, supplies and everything should be supplied by the government including education, housing, health, fertilizer and even rice and coconuts. You may not want to plant a coconut tree in your neglected garden but expect the government to give coconuts below the market price. Coconuts are not made by a super power but by another group of hard-working people and they must get their value for money determined by market forces. How can a government intervene unless the government follows economics of stupid?  

Majority of our people has this servile attitude, which is very unfortunate.  Can we print truckloads of money and solve this problem? We have trapped in an unmanageable debt burden. We can give lavishly from one hand only if we earn enough from the other hand. How can a government give these things when we have to pay back 90 cents from every rupee we earn? Very soon this will become 95 cents per rupee. What will happen next?     

 
I am very saddened as a politician having realized this grave reality of overpowering dependency syndrome. I’ll be facing this reality irrespective of my political affiliation. In the future I could be in the UNP, SLPP, JVP or SLFP or any other party but I may not be able to escape this stark reality. 
Of course during election times all politicians forget this bitter reality and make various unrealistic promises.  During elections, politicians live in their own dream worlds. They try to convince voters as well to share their dreams. We all get hoodwinked until the dreams shatter. Who is fooling whom? This is a vicious cycle that we must break. How?  

Private sector innovation 
“As far as the RPCs, the private sector must begin to innovate now. At the outset in the 1990s, the RPCs took a challenge and acquired debt burdened RPCs. We appreciate that. They were courageous at that time but it seems that their courage soon evaporated. Perhaps, may be because they were not so young and couldn’t walk the talk. 

They gradually became risk averse and began to take damaging short cuts to profit just like slaughter tapping a rubber tree to get more latex. Now we need extensive investments and impetus of capital. The government cannot dole out capital to the RPCs. If they are entrepreneurial and risk taking, sourcing funds from capital markets is not an issue. 

I know that large plantation companies in other countries invest in millions of dollars, in tree crops. They look for the future and manage the present well. They do not live in the past. They do not run to governments or donors seeking handouts.”

The minister offered innovation and change as the only answer. This can be done by a motivated young generation led by young leaders who can think differently. I would say the RPCs need a Meiji restoration. Let young samurais take over. Let them learn from others, take risks and face challenges squarely. 

“The managers are appointed and paid to manage. They must face all challenges in their plantations on their own, in social, environmental and economic spheres. We need sustainable managers. I request the NIPM to take lead in breeding this new clone of plantation managers who are knowledgeable, innovative, courageous and self-reliant – a different breed altogether. The young Director of the NIPM Dr. Prasad Dharmasena will accomplish this mission,” the minister assured.       
“In general, across the economy, the problem is the lack of entrepreneurship among us, in schools, in the society in general. How do we change this status? We must change our education model and compel people to think afresh, laterally and challenging the status quo. Abandon rote learning. Thinking is education. Capacity to think is the success of education.

We do not have many good business schools of world-class except for a couple. We do not have a culture of innovation and entrepreneurship. We need financial literacy. Teaching management theory to those who have no intention of managing tough jobs is not enough. We need people who are good practitioners, practical people who can use theories with their own modifications.    

Next five years will be challenging for all of us. Unless we face these challenges squarely, our nation has no future. It is already too late and there is a need for quick decisions and radical changes. If not, this government will be kicked out soon. Next government too will face the same tune. As in Japan, we may not have financial literacy but we have an abundance of democratic literacy or rather election literacy. 

Our people know how to kick the rulers out at elections. President Rajapaksa faced this. No one will be immune. Although leaders change, lives of people do not change.  That is sad and vicious. 

I will bring about necessary changes within all institutions under my ministry. I have an excellent team with me. We have an enormous pool of human resources among Sri Lankans although brain drain is enormous. Some of our research institutes cannot keep good scientists because of poultry salaries. Those remain contribute their best and I appreciate their services made under trying circumstances.
I thank them profusely but can a government support R&D that ultimately maintains private enterprises integrated with global value chains? How can a country sustain development when national investments on R&D is said to be less than 0.25 percent? We have allocated enough funds to the NIPM having realized its importance as a change agent. I expect that the privates sector too will start making contributions going beyond course fees which again are heavily subsidized.  

We have to come out of this tragic rut. In fact there are many ruts, potholes and traps ahead of us. In my belief, only way is to bring a young group of strong resilient leaders to manage the affairs of our country, its people and its institutions. We need a young generation of professionals, young entrepreneurs, who can bring about the change the nation seeks and resurrect our country. 

The NIPM and its team of professionals led by its dynamic Director Dr. Dharmasena can contribute immensely to the plantation sector by educating and developing a young breed of plantation managers who can change the status quo. The NIPM too needs a new direction which should be relevant to future industry needs, global market oriented and driven based on a robust business model. It should earn its keep and relieve the tax payers’ burden. When it supports the business of plantations, the businesses must sustain it. 

Let us work together and hope that we can revive our plantation sector and resurrect our country.”