ECONOMYNEXT - Sri Lanka will give one billion rupees a year to tea farms from a levy charged on exports, to fund help fund old tea bushes with new ones, Plantations Industries Minister Navin Dissanayake said.
"We assume that in upcoming years we will be able to provide at least one billion rupees for the replanting process" Minister Dissanayaka said in Colombo July 24 at a ceremony to give award for higher performers in the industry.
Sri Lanka charges cess tax on exports to which goes to a fund to be used for replanting and marketing.
Yields of old tea bushes fall over time.
"As we all know the required replanting which is 2.0 percent is not happening in Sri Lanka due to lack of funds.
"Because of that I present a paper to the cabinet about two weeks ago, saying that the Rs. 3 that we get from the tea levy should be distributed equally for marketing and replanting.
"This will help us to increase the tea production per hectare in the future."
Dissanayake said he had fought with then finance minister Ravi Karunanayake who tried to take the cess funds to fund the budget.
Wijeratne Devagedera, Chairman Sri Lanka Tea Smallholdings Authority said average yield in Sri Lanka has increased to 1,850 kilogram per hectare a year in 2018 from 1,600 kilograms in 2015.
Sri Lanka's smallholders grow 132,000 hectares of tea or 59.7 percent of the total, produce about 74 percent of the 340,000 metric tonnes of tea produced a year.
Therefore, we have a great responsibility to increase the production capacity, to protect the quality and prices of the tea.
We have increased it to 1850kg per hectare from 1600kg per hectare. We have to look at these things in a positive way.
Yields of small holder farms are higher than the national average.
Sri Lanka's tea board has said that it costs about 1.5 million rupees to replant a hectare of tea.