‘Productivity of land utilized for agriculture and plantations very low’

by Sanath Nanayakkare

Industrial Zones that account for 30% of local GDP have received only 0.04 % of the country’s land parcel, while millions of hectares of land utilized by the traditional agriculture and plantation sectors account for only 8% of the GDP because the two industries are lagging behind in their value- addition processes, Minister of Plantation Industries and Minister of Industries Dr. Ramesh Pathirana said on Monday.

Pathirana made these remarks while presenting the keynote speech at Nebada Sadaharitha Estate in the Kalutara district, where the Sadaharitha Group, a leader in the Sri Lankan green commercial forestry sector, marked its 21st anniversary.

Speaking further the Minister said:

“Our plantations industry dates back to more than a century and our agriculture industry is even more ancient. Approximately 4 million of our people directly depend on agriculture. In the past 75 years, we have benefited from these two sectors. A good example for this is in 1952, Sri Lanka and China entered into a rubber-rice pact when the country had to face a shortage of rice and China wanted rubber from Sri Lanka. In 1952, Sri Lanka’s population was 6.3 million. Today the population has increased to about 22 million and enough rice is produced for the nation without an issue.

This is because of the substantial investments we have made in water reservoirs, irrigation systems, seeds distribution and fertilizer subsidies. Tea and rubber also get re-planting subsidies. Cinnamon growers get plants for free. However, the country’s agriculture sector accounts for only 8% of the GDP. So, although millions of hectares of the nation’s land are utilized by the agricultural and plantations industries, there is a clear lack of productivity generated by the nation’s land resource by the traditional agriculture sector. This difference becomes clear to us when we work with the agricultural sector and the industrial sector. There is as little as 0.04% of land allocated for industrial zones of the country and they account for 30% of the GDP.”

“During the recent economic crisis, we realized that although the agriculture industry is good and the plantations industry is also good, they are more prone to dependency and their export-oriented value addition processes are on a back-foot relative to other countries in the world.”

“Our commercial tea industry is as old as 150 years since James Taylor, the Scottish planter, who discovered Sri Lanka had great potential for tea. Ceylon tea brand still fetches the best price in the world vis a vis Kenya and India. But our value addition and brand building fronts are in a very backward position. Our value addition is 40% including the production of 5-kilo bags which is also considered as a value addition.

Traditional tea exporters are not willing to shift from their models. They have historically exported tea to Turkey, Iran, Iraq, Lybia, Syria etc. The trade volume accounts for USD 1.2 billion. We need to be thankful to them for their hard work. In terms of rubber, we have become a centre for producing rigid tyre which generates an income of USD 1 billion. But the productivity in our rubber plantations has declined as tappers tend to exit the industry because of weather conditions.

On the coconut front, there is an increasingly favourable situation for Sri Lanka because there is increasing global demand for coconut and allied products. In 2022, we were able to record an income of USD 836 million from coconut exports. I believe that we will be able to earn USD 2 billion from the coconut and allied product exports in 5 to 7 years. Last year, cinnamon industry earned us USD 300 million. But, with Sri Lanka receiving its first ever Geographical Indication (GI) certification for Ceylon Cinnamon, we shall be able to expand our cinnamon exports in the future.”

“In this context, we need to draw our attention towards other commercial crops which have a demand in the global market including the Agarwood cultivation which Sadaharitha has developed a notable footprint across Sri Lanka in cultivation and has also secured a place for their products in the export market. Further, we have instructed the EDB to promote our coffee exports as global coffee sales volume is as five times as tea. The Malaysian Ambassador in Sri Lanka recently drew my attention to commercial cultivation of Durian fruit and we are looking at the possibility of growing it in rubber plantations where rubber trees are sparse. Further, we are looking at the possibility of expanding our export of fresh fruits to the EU, Australia and New Zealand in addition to the Maldives and the Middle East. For this, we are now in the process of earning international certifications to enter those markets.”