Reserve funds mooted to help Sri Lankan plantations ride commodity downturns
ECONOMYNEXT – The creation of financial reserves to help Sri Lankan regional plantations companies (RPCs) ride out periods of low commodity prices has been mooted by a former official responsible for the privatisation of estates.
Romesh Dias Bandaranaike, former chief executive of the Plantation Restructuring Unit (PRU), advocates creation of reserve funds within each RPC to be set aside to handle future “bad” years, which are guaranteed to arise from time to time.
According to a statement from the Planters’ Association of Ceylon, which represents the RPCs, such financial reserves are needed in the context of growing challenges facing the industry as a result of fluctuating international market prices and sharp variations in productivity owing to adverse climatic conditions.
Dias Bandaranaike was the public face of the exercise to privatise loss-making state tea, rubber and coconut plantations in 1992 and headed the Plantation Restructuring Unit which handled the work that chose private companies to manage the RPCs under contract.
(COLOMBO, 30 August, 2018)