Sri Lanka allocates more funds to support tea floor price
EconomyNext – Sri Lanka’s government has approved almost four billion rupees in extra funds to support a tea floor price scheme for small farmers hit by a plolonged slump in global commodity prices.
Government spokesman Health Minister Rajitha Senaratne said the extra funds were approved by the Cabinet of ministers to maintain a guaranteed price of 80 rupees for a kilo of green leaf supplied by farmers.
The funds were sought by Plantation Industries Minister Lakshman Kiriella to extend the floor price scheme by two months till September when a recovery in global prices is expected, he told a news conference.
“With international sanctions on Iran being removed we expect world tea prices will rise,” Senaratna said.
Iran was one of the biggest buyers of Ceylon tea before sanctions were imposed that affected its food imports as its banks found it difficult to pay.
The Plantation Industries Ministry said 2,836 million rupees allocated for the floor price scheme for four months from March to June 2015 in the government’s budget had proved insufficient.
Another 1,302 million rupees were required to pay the guaranteed price during this four-month period.
This was because of a further drop in tea prices that increased the gap between the actual Colombo auction prices and the government-guaranteed floor price of 80 rupees a kilo.
Farmers also had improved quality of green leaf supplied and were supplying more leaf in response to the floor price.
The Plantations Ministry also sought another 2,600 million rupees to extend the floor price scheme by two months till September from June 2015.
(Colombo/July 16, 2015)