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Tuesday September 26th, 2023

Sri Lanka tea farms fear 40-pct crop loss in 2022, rubber wipe-out over fertilizer ban

ECONOMYNEXT – Sri Lanka’s tea output could fall 40 percent in 2022 and rubber could be wiped out by leaf disease, threatening livelihoods and export revenues, if a fertilizer agro-chemical ban suddenly imposed this year is continued, industry officials said.

“In 2022, all experts estimate that we will record reduction in tea exports over 40 percent,” Bathiya Bulumulle, President of Sri Lanka’s Planters’ Association representing managers of commercial tea plantations and factories, who was re-elected for a second time said at its annual general meeting.

Severe Crop Losses

“With an immediate halt to use of fertilizer of agro-chemicals, the consensus is that there will be severe crop losses, and as a result, a reduction in export revenues by as early as the end of this year.”

Sri Lanka has banned imports of fertilizer saying 300-400 million dollars were spent on it a year and that agro-chemicals caused non-communicable diseases.

Sri Lanka’s central bank has been printing money, triggering forex shortages.

Sri Lanka’s Government Medical Officers Association, an influential policy driving body has said according to Pliny the Elder, a Roman author, ancient residents of the island lived for 140 years, before there were any agro-chemicals.

However, critics have said Pliny the Elder is likely to have been wrong and policy should be made on refutable science.

Over several decades Sri Lanka abandoned evidence-based policy making involving, green papers, white papers, expert consultation and finally public consultation which leads to a law to suddenly resorting to bans through executive action and gazette rule.

Up to now plantations companies are using fertilizer already imported to the country for tea. Crop losses have not been severe up to July, amid good rainfall though down from 2019.

“All this time we were managing with whatever the fertilizer issued by the government,” Bulumulle said.

“But it is too premature to tell what it is going to be. There may be a 30 to 40 percent reduction of crop maybe early next year when there is no adequate quantity of fertilizer given to tea.”

Sri Lanka exported 1.2 billion US dollars of tea in 2020 and 1.3 billion in 2019.

The government at the moment has introduced liquid nitrogen. However its efficacy compared to urea based fertilizer is not yet known, planters said.

Usually, Sri Lanka’s Tea Research Institute or Rubber Research Institute recommends fertilizer and application volumes after study.

Rubber Break

Rubber is also hit by diseases and is under threat without adequate fertilizer.

“By the end of 2021, the industry expects an estimated 20 percent Year-on-Year reduction in output from rubber plantations due to this disease,” Bulumulle, said.

A leaf disease (Pestalotiopsis ) is spreading in the plantations. Already about 20,000 hectares are affected.

Rubber plantation experts have said it has reached an epidemic level.

“This disease results in continuous fall of tree leaves so the Rubber Research Institute has instructed us to give additional dosages of fertilizer,” Bulumulle explained.

Farms need fungicides, Carbendazim and Hexaconazole and also fertilizer to help the trees recover leaves.

“One of the key issues in addressing Pestalotiopsis is the lack of necessary fertilizer and the required agrochemicals,” Bulumulle said.

“Since rubber trees lose their foliage due to the disease, to compensate and provide extra nourishment for foliage re-growth, the Rubber Research Institute’s main recommendations is to apply additional inorganic fertilizer,”

The shortage of fertilizer is also going to hinder progress on replanting of rubber, given that the uptake of fertilizer is most crucial when rubber is in the nursery phase, Bulumulle said.

The planters are sounding the alarm, says this could be as bad as the “coffee blight of late 1800s” without fertilizer.

Sri Lanka was a prominent coffee producer in the late 1800s when a disease known as ‘coffee rust’ blight wiped out Sri Lanka’s coffee plantations in the late 1800s.

By next year, planters predict that if crop falls companies will not be able to provide work for the staff.

About 120,000 work in the regional plantation companies. Similar plight will fall on smallholders the PA warned.

“For replanting too, the entire industry – including tea smallholders – who account for over 70 percent of total tea production, need fertilizer for their nurseries,” Bullumulla explained.

“Without it, we cannot grow viable cultivars.”

Planters also said that once a market is lost, especially for tea, it cannot be regained. (Colombo/Sept30/2021)

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Sri Lanka to optimize investments in mineral resources

ECONOMYNEXT – Sri Lanka is exploring the optimal utilization of its mineral resources to bolster the nation’s economic growth, and the potential for creating value-added products from these resources, a state minister said.

“Given our nation’s rich mineral resources, we have devised plans to expand investment opportunities,” State minister of Urban Development and Housing, Arundika Fernando said.

“We have taken the decision to extend investment prospects along our coastline, collaborating closely with agencies such as the Investment Promotion Board and the Ministry of Lands,” Fernando said.

The minster said they were considering the introduction of a specialized bank dedicated to the development of domestic industries and introducing new legislation.

“We are committed to introducing a new environmental protection and ocean protection bill in our country. This legislation will play a vital role in safeguarding our natural resources.”

“The Department of Coastal Conservation actively participates in initiatives aimed at enhancing the value of our mineral resources. These resources have the potential to yield significant value through the production of value-added goods.”

“Our primary focus must centre on pioneering innovative programs that contribute to our country’s economic recovery. Timely and effective resource management is crucial for initiating income-generating initiatives.

From a geographical standpoint, Sri Lanka occupies a strategically vital position in Asia.

India has been eyeing Trincomalee, the mineral resource rich district, for decades. A mineral sand deposit in its northern part contains Ilmenite, Rutile, Zircon, Monazite, Garnet, Sillimanite, and other heavy minerals, Export Development Board (EDB) data shows.

Sri Lanka’s state-run Lanka Mineral Sands Limited is to export 60,000 metric tonnes of ilmenite to China this month after a shipment of 30,000 tonnes of Zircon mineral sands was shipped out of Trincomalee harbour earlier this month.

The EDB said it had identified the value-added mineral products sector as a potential sector to be developed and promoted in the international market, and met with members of the Chamber of Mineral Exporters (CME) to discuss growing the mineral-based industry in Sri Lanka.

CME members requested the government foster foreign investments and proposed that the state conduct a comprehensive ore reserves study to maintain transparency and informed decision-making within the industry.

They asked for government support in research and development, and a 300% tax rebate for research and development activities in collaboration with Sri Lankan educational institutions.

They also requested revising royalty systems grounded in pithead value, in line with international norms and pointed out the need for an equitable approach to royalty calculations to ease the financial burden on mining entities.

Securing international accreditation for the Geological Survey and Mines Bureau laboratory in collaboration with the Sri Lanka Standards Institution to enhance global credibility was also discussed.

CME pointed out the untapped potential of numerous pocket mines in Sri Lanka, and advocated for the development of support industries equipped with state-of-the-art technology.

Members also urged the government to consider duty waivers for the import of new technology and pertinent spare parts to foster innovation and elevate the sector to international standards. (Colombo/Sep26/2023)

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Sri Lanka’s Inland revenue to give tax concessions to institutions for disabled children

ECONOMYNEXT – Sri Lanka’s Cabinet of Ministers has approved a proposal to amend the Inland Revenue Act to allow tax concessions to registered institutions collaborating with the government to provide health and education services to disabled children.

The Inland Revenue Act No. 24 of 2017 is to be amended to give tax relief to legitimate charity establishments collaborating with the government health services/education system in providing health facilities to children with disabilities, and prioritising the wellbeing of differently abled children.

Government data shows around 4 percent of the island nation’s 22 million population has some disability. The government has increased allocations for the disabled to empower them.

A new Disability Bill, aimed at safeguarding the rights of the disabled community, will be presented to Parliament this year.

The bill also aims to reduce disabled people’s dependence on government support.

“The comprehensive legislation seeks to ensure the protection of the rights of disabled individuals and their empowerment within society. This includes providing access, education and technology to all members of the disabled community,” State Social Empowerment Minister Anupa Pasqual said. (Colombo/Sep26/2023)

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Sri Lanka aims to boost jobs for disabled; targets 10% in 2023

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Future SJB govt to “refine” Sri Lanka’s agreement with IMF: Harsha de Silva

ECONOMYNEXT – A future government led by the incumbent main opposition party the Samagi Jana Balawegaya (SJB) will “refine” Sri Lanka’s agreement with the International Monetary Fund (IMF), SJB legislator Harsha de Silva said.

The MP tweeted Monday September 26 morning that a closed-door discussion between the SJB and an IMF team that’s currently in Sri Lanka to review the ongoing programme was productive and had focused on governance, transparency and equity in the reform process.

“It was a good discussion. We were quite frank,” said de Silva in a clip he shared of him speaking to the privately owned NewsFirst network.

“Yes, we said we agree as the SJB that we need to work with the IMF, and that we accept that large-scale economic reform will have to take place. That was the baseline.

“However, the leader of the opposition said that, under our government, certain modifications will have to happen,” said de Silva.

The MP, who also chairs the parliament’s Committee on Public Finance (COPF), said this is because the people “obviously see that there is inequity in the implementation of this agreement”.

News footage of the SJB’s latest round of talks with the IMF team showed that SJB and Opposition Leader Sajith Premadasa along with de Silva and a handful of his colleagues in the party were joined by former Sri Lanka Podujana Peramuna (SLPP) MPs who were vocal supporters of former President Gotabaya Rajapaksa. MPs Nalaka Godahewa and G L Peiris also seen joining a group photo with the IMF and the SJB lawmakers.

The SJB was among the first to demand that the then government of ex-President Rajapaksa approach the IMF before Sri Lanka’s currency crashed in 2022. Over the months since incumbent President Ranil Wickremesinghe’s administration embarked on an IMF-prescribed reform agenda, the opposition party has adopted a more critical position on the international lender.

In May,  SJB MP Kabir Hashim speaking at a public event in Monaragala alluded to a unique vision his party possesses with regard to macroeconomic development that doesn’t necessarily include the IMF.

Related:

Sri Lanka’s SJB no longer enamoured of IMF, promises new govt in three moons

The SJB’s position with regard to the IMF programme, Sri Lanka’s 17th so far, has been less than consistent. The party, which was among the first to call for a deal with the iInternational lender at the onset of the island nation’s worst currency crisis in decades, abstained from voting for the agreement in a vote taken in parliament in April.

While the SJB hasn’t quite had a drastic departure from its original pro-IMF stance, the party has been increasingly vocal of late about the socioeconomic impact of the deal.

SJB leader Premadasa earlier this year reportedly said a future SJB government would not be obligated to honour deals made by the incumbent government headed by President Ranil Wickremesinghe. MP de Silva explained later that what his party leader had meant was that Sri Lanka must negotiate terms favourable to the country when dealing with the IMF. (Colombo/Sep26/2023)

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