RPCs to change model to out-grower system, says Minister

Plantations Minister Navin Dissanayaka said last week that the industry has reached a consensus on establishing the out-grower model, currently being used by smallholders, for Regional Plantation Companies (RPCs).

The minister explained that the tea industry had reached an agreement to change the structure on the RPC plantations and they were in unison for the out-grower model and which has been discussed with the trade unions as well.

The labour unions were yet to conclude their collective bargaining agreement that has been delayed by nearly a year. The minister was speaking last week at the Ceylon Specialty Estate Tea of the Year 2014/15 award ceremony where certificates were given away to the relevant companies at the BMICH following the Dubai Award Ceremony held for the same event.

The government is scheduled to lead a delegation to China in June this year and later to Iran by the end of July or August. The government is also very bullish on Iran at present, it was noted.

It was pointed out that the decline in good production practices and drop in quality is under the microscope and that the factory production process is being questioned.

The state will be looking at strengthening the implementation of policy and monitoring mechanisms to ensure standards are maintained, the minister said.

The Tea Research Institute (TRI) will also be restructured and Minister Dissanayaka pointed out that it was currently under funded.

Asia Siyaka Commodities President/ CEO Anil Cooke delivering a presentation highlighted that today the Chinese were interested in purchasing Ceylon tea and posed the question as to whether it could be an opportunity or a threat in the future.

He noted that it was found that Chinese were lacking in the original black orthodox teas and were now in search of it.

Mr. Cooke pointed out that while facing the challenge of Sri Lanka’s main tea markets currently in turmoil causing trade disturbances going forward the industry would have to think of ways of getting by in the next couple of years.

Tea Board Chairman Rohan Pethiyaoda said that almost every week tea factories were charged severely for dropping quality of manufactured teas.

It was noted that following the global promotional campaign scheduled to kick off in the last quarter of this year the industry was set to get better prices.

Mr. Pethiyagoda explained that currently they were trying to sell Ceylon tea at US$10 per kilo and not just at $3 per kilo.