Sri Lanka plantation firms call for equal treatment of producers

ECONOMYNEXT – Sri Lanka’s Regional Plantations Companies (RPCs) have urged the government to treat both them and small farmers alike when giving concessions and subsidies to compensate for low commodity prices, and end discriminatory treatment.

Roshan Rajadurai. Chairman of the Planters’ Association of Ceylon, which represents RPCs, said the plantation industry in the last two years has been facing its most challenging and toughest times.

The rapid unexpected decline in the oil prices and the recessionary trends in major markets has directly contributed towards a significant decrease in commodity prices which has impacted on the plantation economy of Sri Lanka, he said.

“The steep price drop not only affected the RPCs but also the tea small holders very significantly, that it became uneconomical even for them to pluck their green leaf at those prices,” Rajadurai told the association’s 162nd annual general meeting.

This compelled the government to subsidize tea small holders by giving a guaranteed price of Rs80 a kilo of green leaf and Rs350 a kilo of rubber sheets.

“Unfortunately, the government in its inscrutable wisdom saw it fit to deny this facility and the concession to the RPC producers, although RPCs too are producers selling the same type of products at the same auction to the same buyers,” Rajadurai said.

The RPCs’ statutory and conventional responsibilities, commitments and liabilities towards their workers and dependents numbering close to one million are beyond any comparison to that of the small holders, he said.

“On our part as RPCs, we strongly urge the government to have equality in the treatment of the producers,” Rajadurai said.

“While the RPCs have to pay all the government leases, taxes, levies, cess and every other payment we are called upon to in the conduct of the business, when it comes to assistance and concessions given to the industry, we are conveniently left out.

“The guaranteed green leaf and RSS payments are a few examples. RPCs too operate in the same industry and sell our produce at the same auction to the same buyers as the other producer stakeholders and we cannot understand the logic of differential and discriminatory treatment meted out to RPCs,” Rajadurai said.





“There should be equality in the treatment of all the stakeholders if the industry is to thrive.”

Rajadurai said the Plantation Industries Ministry should be consulted and given preeminence by the government in policy making decisions related to the industry.

Stake holders also should be consulted by the  government and their views sought out before any major policy decision is taken that affects the operations in the industry, he added.

Rajadurai said RPCs had invested heavily in their estates and made profits since taking them over from government in 1992 when they were making losses.

“Since privatization, from 1993 to 2015, the RPCs total Capital Expenditure was well over Rs55 billion which is far more than the total profits earned by the RPCs,” he said.

Rs7 billion was paid as dividends to Sri Lankan shareholders, Rs7 billion as lease rental to the government and Rs1.5 billion income tax to the state.

According to the State Ministry of Plantation Industries, up to the time of privatization in 1992, US$275 million, equal to Rs35 billion in current terms was the capital investments in the plantations through various donor and mostly grant funding.
(COLOMBO, Sept 17, 2016)

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