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Sri Lanka hopes to transform tea industry.

Sri Lanka hopes to transform tea industry

Sri Lanka's new Minister of Plantation Industries, Gamini Dissanayake, is widely reputed for his vision and innovative policies. Barely six months in office, he has set in motion radical reforms to transform the tea industry in Sri Lanka into a truly business enterprise. He is currently the chairman, inter-governmental group on tea established under the FAO. He was interviewed by T. Sambasivam on prospects for international cooperation on tea and the future of the Sri Lankan tea industry.

Question: As chairman of the inter-governmental

group on tea, how do you assess the prospects

for international cooperation on tea? Answer: There is considerable scope for international

action on tea. For too long, the world tea

community has been dwelling on contentious issues

such as production controls, export quotas,

buffer stock arrangements, and floor and ceiling

indicator prices. All these measures are designed

to restrict supplies to the market. Quite

understandably, there was opposition to these

approaches due to divergence of interests

between new and old tea producers as well as

between exporting and importing countries. Question: What areas of cooperation would you

advocate? Answer: Let us turn our focus to the other side of

the equation--stimulating demand. Surely, there

is ample scope to increase the size of the market

so that all sectors of the tea economy could

benefit from an enlarged tea market. Question: Do you suggest global efforts for the

generic promotion of tea? Answer: Exactly, there is general consensus among

the international tea community on the need for

expansion of demand through generic

promotion. This should be followed up by joint efforts

by all concerned--the tea exporting and

importing countries and the trade--to coordinate their

policies and action for expanding the aggregate

demand for tea in the traditional as well as new

markets. Question: What about uninational and brand

promotion? Answer: They would be complementary to the generic

promotion efforts. Question: But Sri Lanka and India withdrew in 1984

from the International Tea Promotion

Association (ITPA), which was an agency founded by

tea exporting countries for this very purpose? Answer: That was an unfortunate decision, We are

willing to review it, and we hope India too would

do likewise. We should examine what went wrong

with the ITPA. Firstly, the membership need be

broad-based and funding arrangements made

equitable by all member nations. Secondly, the

ITPA must function complementary to the

national tea councils and not try to supplant them.

Above all, the association should be manned by

the best, professional talent--be they Sri

Lankans, Indians, Kenyans or for that matter,

even Americans or British. Question: How do you perceive the role of the tea

councils? Answer: Sri Lanka is a member of the national tea

councils of the U.S., Canada, U.K. and

Germany. These are important traditional tea

importing countries. These councils are

performing a useful function directed at maintaining and

increasing the demand for tea within their

national boundaries. We want these councils to be

broad-based. We also want a mechanism

established whereby even some of the major tea

exporters--who are not members of the tea

councils--will share the burden of financing a

generic promotional campaign. Currently,

certain producer countries are carrying an unfair

burden financing councils when in fact they have

only a small share of the market. Question: But these tea councils are operating only

in a few developed countries? Answer: It is true that there are no national

promotional bodies in the new markets of West Asia,

North Africa and East Europe. Perhaps new

proposals germane to these areas will emerge. Question: How do you suggest to fill the vacuum

immediately? Answer: These markets should be covered by the

ITPA which should be restructured to fulfil this

role. Question: There is criticism that the quality of tea in

some of the consumer packs has declined. This

has been attributed as one of the reasons for the

declining trend in tea consumption in some of

the traditional markets. Answer: Tea is an exotic and delightful beverage. But

even the most efficient housewife cannot coax

a good cup out of bad tea. If the younger

generation are to turn to tea, they should find it an

exciting brew. The established tea drinkers should

not feel disappointed with the product. More

customer satisfaction would result in increased

demand. It is therefore important that the

producing countries and blending companies should

work together to enhance the image of the

beverage. A first step in this direction would be

the acceptance and implementation of the ISO

standard by all exporting and importing

countries. Otherwise both would stand to lose. Question: Are you optimistic of the future for tea? Answer: Tea has brought cheer and joy to people

throughout the world for over 1500 years.

Today, tea is perhaps the largest selling beverage

in terms of cuppage. Taking into account the

growing health awareness among consumers, the

comparative cost and the intrinsic quality of the

product, I have great hopes for its future. Question: May we turn to Sri Lanka's domestic issues.

What are your development strategies to

revitalize the tea sector? Answer: The tea industry in Sri Lanka is nearly 150

years old. Although the ownership of the tea

plantations were vested in the State in 1975 under

the Land Reforms, there has been little change

in concept, attitude or practices. The stagnant

tea production during the last three decades is

testimony to this inertia. My immediate task is

to increase the productivity of the plantations.

We have targeted to increase the tea yields by

at least 20 percent within the next five years

through intensive cultivation. This would reduce

the unit cost of production, improve

commercial viability and enable Sri Lanka to retain her

world market share. Question: What are the structural changes that are

being introduced to achieve your goals? Answer: We are making a clean break from the

traditional system of plantation management. We are

replacing it with a cluster system. Under this

system, six or seven estates are grouped together

under the charge of a cluster director who is

given maximum devolution of authority to make

all operational decisions. The overcentralized

management vested in the Central and Regional

Boards have been done away with. The span of

control is now limited to a few estates to facilitate

effective management. Every inch of land in the

cluster will be cultivated. The cluster will not be

confined to moncropping of one export crop.

Multi-cropping and mixed farming will be

introduced wherever commercially advantageous.

Uneconomic tea fields within the cluster will be

excised out and released to the villagers and

estate workers to diversify to other remunerative

crops. In short, each cluster will be developed

as a growth centre by the joint efforts of the

state, the estate worker and the villager. Question: Does this mean that the new measures have

social objectives as well? Answer: Part of the social tension in the country

today is due to the perpetuation of the enclave

concept of the plantations. The affluence of the

estates with their mansions and manicured

gardens in the midst of rural poverty evokes

resentment. One of the social objectives of the

cluster system is to promote interaction and

integration among the estate management,

plantation workers, tea smallholders and rural

villagers. The cluster management will provide

technical advice and other inputs to enable the

peripheral areas around the cluster to grow with

it. The main focus of the new system is to make

the plantations economically viable while at the

same time improve the socio-economic

conditions of the plantation workers as well as uplift

the village community in the plantation areas.

This would promote social justice and harmony

and ease the current tensions. Question: One final question. What directional

changes are you pursuing in the marketing

sphere? Answer: We want to develop Sri Lanka as an

international tea trading centre. Towards this end,

we have recently lifted all controls for the

importation of foreign teas. Teas from other

countries are now freely allowed to be imported for

blending to service export orders. We are even

considering the feasibility of auctioning teas

produced by other countries in Colombo. We are

embarking on an accelerated program to switch

over 20 percent of the tea output to CTC teas.

Our vision is to make Sri Lanka the largest

exporter of tea in the world by 1995 and the leading

international trading centre for tea by the turn

of the century.
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Article Details
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Title Annotation:Minister of Plantation Industries Gamini Dissanayake
Author:Sambasivam, T.
Publication:Tea & Coffee Trade Journal
Article Type:interview
Date:Oct 1, 1989
Words:1410
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