Plantation sector and economy
By Dr. C. S. Weeraratna (csweera@sltnet.lk)
Sri Lanka is facing an unprecedented crisis mainly due to economic mismanagement and corruption in the various development sectors. During the last few weeks, at various discussions related to the country’s economy, the need to take effective action on the present economic situation in the country has been highlighted. President Ranil Wickremesinghe stressed the need for all sections of the government to act unitedly to take the nation towards stability by the end of the year. But there appear to be no plans to get the country out of the doldrums.
The need to increase our export earnings to meet the severe financial crisis we are facing today has been emphasised by many but there appears to be no plan to achieve that objective.
Increase export earnings
Increasing exports is of paramount importance to improve the present Foreign Exchange (FE) crisis. A major source of FE is the plantation sector. Around 800,000 ha in the country are cultivated with plantation crops tea, rubber, coconut etc. and this sector, in the last few years earned nearly Rs. 360 billion annually. However, as indicated in table 1, production of these major export crops do not show any substantial increase during the last six years.
As shown in Table 1, tea production has been fluctuating around 300 million kg per year during the last five years, in spite of several institutions assigned to the tea sector. The average tea yields are considerably lower than the potential yields. In the smallholder tea sector the average yield is around 1800 kg/ha and in the estate sector it is about 1200 kg/ha. In 2020 tea earned Rs. 230 billion in FE. Better management practices in the short term would increase the quantity and quality of the tea produced making it possible to increase FE earnings substantially from the current Rs. 230 billion.
Rubber is another important export crop. In 2017 it earned nearly Rs. 6 billion in foreign exchange but has decreased during the following three years. Based on Central Bank annual reports, the total rubber production in 2016 was 79.1 million Kg and by 2021 it has plummeted to 76.9 million kg. The corresponding average yields are 819 kg/ha and 679 kg/ ha respectively. These figures indicate that the Sri Lankan rubber sector is ailing in spite of several institutions such as Rubber Development Dep. and Rubber Research Inst. assigned to promote rubber production in the country. With the current high rubber prices it would be possible to earn more FE by increasing rubber production by better management practices which would produce results in the short term. During the last few years the rubber sector has been affected by many factors one of which is ineffective management.
Coconut production too has declined during the last five years as shown in Table 1. The total extent under coconut in Sri Lanka is around 400,000 ha and about 325,000 ha are small holdings. Annual production of coconut has been fluctuating around 3,000 million nuts, If the production of the existing coconut lands is increased by 1000 nuts/ha/year by better management, and applying organic and inorganic fertilisers the total production can be increased by a substantial number within a year which will increase the export income from coconut.
Sugar production in the country has not increased by any appreciable amounts during the last few years as sown in Table 1 in spite of three sugar companies, Pelwatta, Sevanagala and Hingurana and the Sugarcane Research Institute. Kanthale sugar factory remains closed over a long period, while a plan to cultivate sugarcane in Bibile remains shelved. There are crops such as coconut, kitul and palmyrah which can be used to manufacture sugar based substances such as jaggery and treacle, but there appears to be no effective strategy to promote the production of sugar and sugar based substances in the country
Sri Lanka, a country begging for dollar loans to import medicine, fuel etc, which are critically important, need to have an effective plan on exports. A large number of crops other than tea, rubber and coconut cultivated in Sri Lanka have a high potential as export crops. There are 24 agro ecological zones, each characterized by specific climate and soils. This makes it possible the cultivation of different types of crops such as spice crops, tuberous crops, horticultural (fruit crops) and floricultural crops, medicinal herbs etc.
In view of the present deteriorating economic situation on the country, strategies need to be implemented to increase production from the plantation sector and hence FE earnings. There are many state sector organizations such as Tea Board, Rubber Development Dep, Coconut Cultivation Board etc. to implement such strategies.
A number of issues can be attributed to the present unsatisfactory state in the plantation sector. Among these are (a) Increasing cost of production ( b) Old machinery (c) Land degradation (d) Old age of crops (e) Low value addition (f) Inadequate diversification and intercropping and (g) Insufficient marketing strategies
Land Degradation:
One of the important contributory factors for the decline in the productivity of the plantation sector is Land Degradation. Soil erosion, soil compaction, and nutrition depletion, cause productivity of land to decline, making crop production less profitable. In view of the importance of land degradation, the Ministry of Environment, in 2005, established an expert committee on Land Degradation. This committee comprised a number of experts in the field of land management and the main role of the committee was to advice the Ministry of Environment, on issues related to controlling land degradation. This committee has not met since Feb. 2013.
At the first national symposium on Land Degradation held in 2010 , organized by the Ministry of Environment and the expert committee on Land Degradation, the participants, who were representing many land-related institutions in the country, revealed that a substantial amount of soil/ha/year is lost due to soil erosion. They were of the view that urgent action such as implementation of proper land use planning and the soil conservation and environment act etc. need to be taken by the relevant organisations to control land degradation.
There are many ministries, departments and other institutions which are expected to take appropriate measures to control land degradation. During the last few years a large number of seminars, workshop s have been held on this topic. In spite of all these, land degradation continues to take place evident by the common occurrence of landslides, depleted top soil, siltation of tanks and reservoirs, decline in crop yields, etc. The Ministry of Environment (ME) needs to activate the already established Committee on Land Degradation which would make appropriate recommendations to reduce land degradation to be implemented by ME. A land use policy has been formulated but is not effectively implemented to reduce land degradation which has serious repercussions on the productivity. The Land use policy need to be implemented as an integrated programme in increasing the productivity of the plantation sector.
Diversification:
Productivity of many estates under plantation crops is at a low level. Diversification of such unproductive lands is essential. A survey need to be done to identify these unproductive lands which need to be diversified.
Such lands may be put under pasture and have cattle which will reduce our expenditure on milk imports. it will also reduce degradation of the lands resulting in less silting of the reservoirs. There are many other crops such as spice crops, floricultural and horticultural crops etc. which could be cultivated in the unproductive lands. Among the horticultural crops, cashew has a considerable potential in increasing exports. These crops would give better returns to the cultivators. Hence, an in-depth study needs to be carried out as early as possible to determine appropriate land use in the unproductive holdings/estates giving due consideration to factors such as climate, topography, availability of labour etc. Those lands which are not going to be diversified need to be managed better. In this regard, infilling, cultivation of better clones and their effective management including better fertiliser and pest management practices, , increased rate of replanting, reducing soil degradation and conservation practices are essential.
Deterioration of the plantation sector will exacerbate the financial and social problems we are facing.. The annual trade deficit which stands at around Rs. 1,800 billion and unemployment among the rural plantation community will get worse. In view of these critical issues faced by the Plantation Sector it is necessary that the relevant authorities lead by the Ministry of Plantation Industries develop a holistic national plan to resurrect the plantation industry .
It is also important that the respective ministers get the service of scientists in managing the relevant scientific organisations under them.. For example, during the last few years the Rubber sector which plays a very important role in the economy of the country was headed by personnel who have little or no experience in the rubber sector.. A few years ago an “expert” was appointed to the ministry of Plantation Crops who came out with an unrealistic Rubber Master Plan which would cost the country Rs. 75 billion. Such appointments surely will not enable the respective institutions to contribute positively to the areas which they are expected to develop.
Promoting agro-industries will have a considerable positive impact on increasing exports. There is an urgent need to develop agro-industries in Sri Lanka, which will have a tremendous impact on unemployment and rural poverty. A large number of crops cultivated in Sri Lanka, including rice have considerable potential in various agro-industries. However only rubber, coconut and a few fruit crops are used in industries. Crops such as cassava, horticultural and floricultural crops, medicinal herbs, cane, bamboo, sunflower, castor , ayurvedic herbs, etc. have a considerable industrial potential but are not cultivated. cardamoms, nutmeg, mace and vanilla which grow in abundance mainly in the wet and intermediate zone,. In 2020 county earned nearly Rs.60 billion by exporting spice crops.
Spice crops have a high potential to increase FE earnings. Cinnamon is the most important spice commodity among the spice sector. The production of cinnamon has been fluctuating around 20,000 t per year during the last few years. Pepper is the second important commodity among spices .It is grown in the wet and intermediate zones mostly as a mixed crop. The Sri Lankan Pepper has higher piperine content which gives it a superior quality and pungency. Annual production of pepper too has remained stagnant at around 20,000 kg. Other spices such as cloves, cardamom, nutmeg and mace have the potential to earn a substantial amount of FE. With the increase of international demand for natural products, and the island’s focus on enhancing and evolving its value added range, spices and the essential oils extracted from these crops will continue to earn more FE.
Dehydrated food is another agricultural product which has a potential to earn much wanted FE. During some months there is a glut of fruits and exporting dehydrated/canned fruits would bring in an appreciable amount of FE. Private sector can be involved in such projects for which appropriate technical assistance need to be given by the relevant public organizations
Although hundreds of research projects related to plantation crops are carried out by the Faculties of Agriculture , Research Institutes etc. there appears to be no organized system to utilise the research findings in our efforts to increase productivity in the plantation sector. There is very little liaison/interaction among the relevant institutions, and the research carried out in the country appears to have no appreciable positive impact on the plantation sector in the country. .In a developing country such as Sri Lanka, a primary objective of scientific research must be to utilize locally available resources. Research priorities, need to be based on the needs and problems in the production sectors.
