Sri Lanka to revamp tea small holder fund
ECONOMYNEXT –Sri Lanka’s loss-making state-run Tea Shakthi Fund that supports smallholders will be restructured by cutting staff and giving fresh funds for working capital and factory modernisation to make it profitable.
Government spokesman Health Minister Rajitha Senaratne said the Cabinet of Ministers approved a proposal by Minister of Plantation Industries Lakshman Kiriella to allocate 200 million rupees from the General Treasury to the fund.
“The aim is to make the Tea Shakthi Fund profitable after meeting requirements such as modernization of factories and supply of future working capital,” he told a news conference.
The fund, which supports 97,000 tea small farmers, operates four projects covering tea factories, fertilizer supply and local tea sales as well as smallholder welfare insurance.
The factories, fertilizer and sales projects are running at a loss with the loss of tea factories alone exceeding 100 million by end-2014, according to the Plantations Industries Ministry.
The tea factories’ losses from January to May 2015 were 38 million rupees.
The ministry said the main reason for the factories’ losses was the low prices fetched for their tea owing to poor quality as they lacker proper machinery.
(Colombo/July 17, 2015)