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Plantation sector and economy

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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.



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Features

Trump’s tariffs, AKD’s gazette and Sri Lanka’s diplomatic slumber

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“We are rather respectable in Colombo. We go to bed fairly early, and we remain there till morning. “

According to Sri Lanka’s diplomatic folklore, the late S.W. R. D. Bandaranaike uttered these words while explaining the reasons for Sri Lanka’s abstention on the UN resolution condemning the Soviet invasion of Hungary. Apparently, SWRD’s foreign ministry officials were asleep at home when the diplomatic cable seeking instructions was received from New York. In those days, there were no cell phones, Internet, or even fax or telex machines. The diplomatic cables were sent through post offices. Decoding them was a slow and time-consuming process. Thus, the government could not provide appropriate instructions to our mission in New York in time, and the Sri Lankan delegation abstained on that sensitive UN vote.

Sri Lanka’s Absence from Section 301 Consultations

But then, how does one explain Sri Lanka’s absence from the crucial bilateral consultation held in Washington by the Office of the United States Trade Representative (USTR) during March-April on “Forced Labour” under the Section 301 of the US Trade Act of 1974? Didn’t our foreign and trade ministries send appropriate instructions to Washington in time? Even if the instructions from the foreign ministry were transmitted to our embassy in Washington by pigeon carriers, there was enough time for Sri Lanka to participate in those meetings.

In March, the USTR initiated these 301 investigations on 60 trading partners, and invited all of them for confidential consultations. Out of the 60, 46 participated in these consultations. Sri Lanka was not one of them. Other countries that didn’t participate in these consultations included China, Russia, and Venezuela! In addition to that, the Section 301 Committee conducted a public hearing with interested parties on April 28 and 29. Washington-based diplomats, representatives from few trade ministries as well as representatives from many foreign trade associations and chambers participated in these hearings. Sri Lanka was once again conspicuously absent.

As a result, when the USTR published the proposed forced labour tariffs on June 2nd, Sri Lanka ended up with a 12.5% duty. Pakistani and Indonesian diplomats participated in these consultations and took appropriate follow-up measures, and managed to enter the 10% duty category. As even a threat of a modest tariff hike could disrupt supply chains and reduce competitiveness, particularly in an industry such as garments, I discussed this issue on 15 June and underscored the importance of Sri Lanka’s participation at the next hearing, which was scheduled to be held from July 7th .

Awakening from Diplomatic Slumber and AKD’s Gazette

Fortunately, Sri Lanka finally awoke from weeks of diplomatic slumber, and Ambassador Mahinda Samarasinghe participated in the public hearing on 9 July, and promised, “…. · We have agreed to the text in our negotiations with the USTR on forced labour, …. The gazette as we speak is being printed and I’m getting the gazette tomorrow morning, and the gazette will be shared with USTR as I get it“.

As promised, President Anura Kumara Dissanayake issued a gazette on 10 July banning the imports of goods produced by forced labour. These new regulations are very similar to what Pakistan and Indonesia enacted in April, after their consultations with USTR in March. Why couldn’t we do it in April? Why did we wait till the very last minute?

Challenges ahead

“War is too important to be left to generals alone,” is a famous saying attributed to former French Premier Georges Clemenceau. Similarly, monitoring our main markets is too important to be left to diplomats alone. The United States is the largest single-country market for Sri Lanka. Therefore, Sri Lankan trade chambers and associations should become more proactive in these markets and participate in these events. For example, the chairman of the Pakistani apparel exporters association participated in the April hearings. Similarly, representatives from the Indian Agricultural and Processed Food Products Export Development Authority, the Federation of Indian Chambers of Commerce and Industry, the Confederation of Indian Industry, and Reliance Industries also participated in July hearings. At an event where each speaker is given only five minutes (strictly enforced), having a number of speakers from a country is an advantage. The presence of industry representatives in these kinds of events also help them understand the market dynamics and the future challenges. This is important, particularly because there will be many more challenges with Trump’s tariffs.

With the gazette issued on 10 July, Sri Lanka has imposed a prohibition on the importation of goods produced with forced labour. Now, the challenge will be to effectively enforce the prohibition. And what are the goods produced with forced labour? The USTR list only focuses on aluminum, cotton, electronics, lithium-ion batteries, rice, and tobacco. However, according to the U.S. Department of Labour, the list is much longer. Hence, this list may change continuously during the next two years and tariffs may fluctuate once again.

So, this is definitely not the time to slumber.

(The writer, a retired public servant, can be reached at senadhiragomi@gmail.com)

by Gomi Senadhira ✍️

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Tales of Mystery and Suspense 10 Casino for Sale

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After the overwhelming grotesquerie of J K Rowling’s latest Cormoran Strike novel (written, I should have noted, as the others were, under the pseudonym Robert Galbraith), I thought I should return to the world of fun, and also a much shorter description since this thriller moves quickly without the layers of detail that Rowling engages in.

I then move to the second comic thriller by Caryl Brahms and S J Simon. This, their second story to feature Vladimir Stroganoff and Adam Quill, was Casino for Sale, as lunatic a romp as the first, though without the emphasis on the ballet that characterized A Bullet in the Ballet.

This one begins with the impresario Stroganoff buying a casino cheap from Baron Sam de Rabinovich, only to find that it was a rundown place, not the grand casino of La Bazouche, a resort on the Frenc+h Riviera, as he had initially thought. The grand one belonged to Lord Buttonhooke, and Stroganoff could  not compete, until he thought of bringing the Ballet Stroganoff to the casino – which of course leads to Buttonhooke deciding to have ballet performances in his Casino too.

Stroganoff invites Quill to visit him, which Quill decides to do since he has left Scotland Yard, having come into a legacy. No one believes this, and he has to face questions as to what he did to have been sacked, with sympathy for having been found out.

Caryl and Simon

The day he arrives in La Bazouche there is a murder, of a vitriolic critic called Citrolo, in Stroganoff’s office. He had been going to write a damning review of the opening night of the ballet and Stroganoff, when he realizes Citrolo cannot be swayed, drugs him and dictates the review himself to the papers. He leaves Citrolo sleeping and finds him shot the next morning, whereupon he decides to muddy the waters and leave a suicide note and lots of other murder weapons. So much overkill, as it were, of course ensures that he is arrested.

But the excitable French detective who makes the arrest follows up his suggestion that Buttonhooke was also involved, and so the two casino owners find themselves in cells next door to each other, with the detective Gustave quite happy to provide creature comforts for a fee.

Quill decides he must investigate, and finds Gustave most cooperative, since he has a laid back attitude to work. So it is Quill that finds a notebook which makes it clear Citrolo is an accomplished blackmailer, and that there are lots of possible murderers, including Stroganoff’s croupier, who was crooked, Rabinovich, who was now working for Buttonhooke, a confidence trickster called Kurt Kukumber, whose prospectus for a dud gold mine was found in the office and Prince Alexis Artishok who was engaged in a deal to buy diamonds from the ballerina Dyra Dyrakova.

Stroganoff had been trying to get Dyrakova to dance for him, but having done so previously she had refused. But then to Stroganoff’s chagrin she agreed to dance for Buttonhooke. The clearly crooked Artishok had told Buttonhooke’s mistress Sadie Souse, who was not very bright, that Dyrakova possessed diamonds she was willing to sell cheap, and Sadie was determined to have them.

Quill meanwhile finds out that there was a secret passage to Stroganoff’s office, the obvious solution to what had begun as a locked room mystery, and that this was known by almost everyone apart from Stroganoff himself. And then Rabinovich is murdered, just after Gustave had released his two original suspects, leading him to blame Quill for having insisted on that and thus allowing them to kill again.

Soon afterwards Dyrakova arrives, and the town is full of posters announcing that she will appear in the casinos, elaborate posters for either one, since Stroganoff is determined that she will dance for him, and if she does not come willingly, he has devised a scheme to make her do so unwillingly. So, though Buttonhooke has her taken off to his yacht immediately she arrives at the station, Quill along with Arenskaya gets her into a launch and to Stroganoff’s casino, where she performs to tumultuous applause, not knowing for whom she is dancing.

When Quill asked her about the diamonds, she said she had sold them long ago, and that gave Quill the solution to the mystery. Rabinovich had known about this, and Artishok had killed him to prevent Sadie learning it from him, he had killed Citrolo who had recognized him for an accomplished card sharper, not a Russian prince at all. But before he is arrested, he gets away in a boat, and the police launch that pursues him is on the point of catching him up when it runs out of petrol.

Again, lots of excitement, and entertaining references  – Gustave grows marrows – and if not quite as brilliant as its predecessor, Casino was certainly a delightful read.

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The challenge of being positive about SAARC

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The RCSS forum addressed by SAARC Secretary General Ambassador Md. Golam Sarwar in progress. (Pic courtesy RCSS)

It was a few years back that a former President of Sri Lanka took it on himself to pronounce SAARC ‘dead’. Since then there have been other sections of Sri Lankan opinion that have joined the critics of SAARC and taken the solemn stance that SAARC has indeed died what may be called a natural death.

Their fatalism is understandable. SAARC has failed to meet at heads of government or state level for the past several years to take the SAARC process notably forward. Regional cooperation has more or less been only an appealing idea. No substantive concrete projects have taken off to make the idea a hard reality. ‘Inner paralysis’ seems to be SAARC’s lot. Hence the fatalism in these circles.

However, being one of the worst cash-strapped regions of the world and a teemingly populated one with people virtually left to their devices, what choices do the ‘SAARC Eight’ have other than to try their best to band together and continue with their cooperation efforts, however small they may be?

There is no escaping the mounting debt trap for many of these countries and bankrupt Sri Lanka is a glaring example, but ‘throwing in the towel’ and abandoning themselves entirely to the diktats of the strongest economies and their agencies will prove a ‘living death’ for many countries in the SAARC fold.

The gains may be meagre but giving-up on SAARC cooperation in full would prove self-defeating for the organization and South Asia. Right now, the collective intention ought to be to salvage what the region could from the tenuous cooperative efforts. Moreover, such initiatives could go some distance to generate a degree of goodwill among the Eight and help in sustaining a dialogue process.

Given this backdrop it proved ‘a stich in time’ for the Regional Centre for Strategic Studies (RCSS), Colombo, to recently host the SAARC Secretary General Ambassador Md. Golam Sarwar to a round table discussion on the unifying potential of SAARC and its future possibilities, besides other related issue areas.

Held on June 24th and moderated by RCSS Executive Director and former ambassador Ravinatha Aryasinha, the forum brought together a vibrant, wide ranging audience comprising academicians, diplomats, senior public servants, civil society activists and many others. Following the presentation by Ambassador Golam Sarwar titled, ‘Reigniting SAARC: Achievements, Challenges and the Way Ahead’, a lively Q&A followed.

The above forum could be described as an act of lighting the proverbial ‘candle’ rather than ‘cursing the darkness.’ It surely is a ‘darkness’ that could be seen as daunting considering that the region’s pivotal powers, India and Pakistan, are failing to act in a spirit of accord but are engaged in bitter finger-pointing on a number of questions of vital importance to SAARC.

On the other hand, what is the rest of the region doing to bring the above sides together? It is disappointing that to date the rest of SAARC has failed to launch a major diplomatic drive to bring peace between the feuding regional heavyweights. It needs to act without delay and establish its earnestness and this effort would need to prove SAARC’s staying power in the unfolding months and even years.

In assessing SAARC’s seeming failure local opinion in particular has failed to factor in what could be described as weak leadership. Since Sheikh Mujibur Rahman of Bangladesh, the founding father of SAARC, the region has failed to produce a visionary leader who could advance the SAARC cause with charisma and drive.

Among other reasons, weak leadership accounts considerably for the faltering and stuttering status, as it were, of SAARC. Badly needed are leaders who could go the extra mile, think less of narrow national interests and work diligently towards the collective well being of the region but SAARC’s millions of ordinary people have been made to wait in vain for leaders of such stature. Instead, they have been burdened with politicians who seem to be relishing the apparently moribund state of SAARC.

Looking back, it could be said that it was the dynamic leadership factor that led to the launching of the Non-Aligned Movement and for its sustenance for a few decades. True, it could be seen in some quarters that NAM is no more, but as in the case of SAARC, the former too has been unfortunate to be burdened over the years with politicians who lack the vision and drive to unflaggingly advance the fortunes of the South. NAM and SAARC lack the dynamism and vision of leaders of the stature of Jawaharlal Nehru, for example, to give them the required guidance and intellectual depth.

The reasons are complex for there not being among us currently political leaders with the vision and the steadfast commitment to advance the legitimate interests of the South. However, it could be stated with conviction that the majority of Southern leaders have too easily caved in to the demands of the global North and its financial agencies.

These leaders have failed to see, for instance, that the largely market economy oriented Northern governments would not view with favour a centrist economic model that attaches priority to the interests of the dis-empowered publics of the South. This realization ought to have dawned on the current government in Sri Lanka, for instance, some while ago but it has no choice but to abide by IMF dictates since economic survival at present is unthinkable without the latter’s succour.

Accordingly for SAARC this should be the time for some soul-searching. Priority needs to be attached to ending the feuding between India and Pakistan since at present the material fortunes of the region hinge largely on these regional giants giving peaceful relations among them a try. This is no easy challenge to meet but some daring, visionary diplomacy needs to take hold among the rest of SAARC.

There is some sense in SAARC bringing the peoples of the region together through programs that address their best collective interests. A meeting of minds among SAARC nations could enable SAARC and its agencies to build a region-wide people’s movement for progressive political and economic change that could in turn lead to the region’s political leaders sensitizing themselves more to the neglected needs of their publics.

However, the time is ‘now’ for the initiation of these progressive changes and the voice of SAARC well wishers would need to drown out those of their critics.

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