Lanka tea industry reeks of corruption, says Minister

Plantation Industries Minister Naveen Dissanayake on Wednesday told a packed room of journalists how the tea industry is reeking of corruption and that he will be after "quality, quality, quality", this year.

Two years into the job, Minister Dissanayake for the first time came out strongly against the tea industry saying it was corrupt and as a result of which the Regional Plantation Companies ( RPCs) would be monitored more stringently.

Speaking at a media conference at the Tea Board in Colombo, he raised the issue of how some companies were found to have transferred funds within their parent company.

"The industry is very big, it’s a US$ 1.5 billion industry and nefarious activities like blending impure teas are coming into the market and they get the officials on their side as well," the minister said adding that "this year I want to clean up the industry."

Although Sri Lanka had recorded an increase in production by 4.9 per cent last year at 304 million kg compared to 2016 which yielded only 292 million kg; it was still low compared to the 2015 figure of 328 million kg.

In 2016 tea prices were low and yields were also down due to a number of external and internal factors but 2017 picked up and improved performances but the ban on glyphosate and other environmental concerns added to drop.

The smallholder sector continued to add over 75 per cent to total production.

Meanwhile, Sri Lanka has seen the largest demand for its tea coming from Turkey as a result of the fact that these teas are then used for blending with other teas there for re-export, the minister said.

The minister pointed out the concerns with sanctions on Iran that had caused the industry problems in terms of receiving payments.

In China the industry is looking at possibilities of increasing their market share through the sale of the popular black teas from Sri Lanka.

“We expect a clean and quality tea industry. There is a lot of corruption in the industry and low quality tea is rampant,” the minister said.

In the meantime, Russian quarantine experts will be visiting Colombo next month in the wake of finding a beetle in the packaging of Ceylon Tea believed to have originated from the container that it was shipped in, authorities said.

The impact of the ban on agricultural produce imported to Russia from Sri Lanka was minimal, Sri Lanka Tea Board Chairman Dr. R oh an Pethiyagoda told journalists in Colombo.

He noted that since authorities were able to iron out matters with the Russian officials the ban was lifted within a week.

Commenting on the recent concerns raised by Japanese and European authorities on detecting use of high levels of weedicide found in Ceylon tea the industry has been asked to adhere to the new norms set out by these markets, Dr. Pethiyagoda said.

He explained that while there is a slight increase in residue levels they have been granted a grace period of six months to get their act in order as the EU has imposed a residue level of 0.05 and Japan 0.01.

Authorities complained that it was due to the ban on glyphosate that they were unable to meet up to the stiff competition from competitors who were using this substance to contain weeds on the estates.

In this respect, it was pointed out that while they were unable to introduce a new weedicide to the planters to replace glyphosate, the ban had led to an increase in the cost of production and drop in yields.

It was pointed out that there could have been a 5- 7 per cent increase in yield this year if not for the ban.

Tea Board officials are also readying to carry out the promotional campaign to increase presence of Ceylon Tea in global markets and this is expected to get underway within three months, Dr. Pethiyagoda said.

The authorities will be adopting digital and social media channels to carry out their two- year promotional campaign for Ceylon Tea restricted to 12 countries namely Russia, UAE, Japan, China, US, Iran, Germany, Turkey, Saudi Arabia, UK, Australia and India. But a traditional form of advertising will also be adopted, according to Dr. Pethiyagoda.

There is an allocation of Rs.6 billion for promotions at the SLTB out of which annually about Rs. 300, 000 is spent on promotional work participating in trade fairs and road shows.

“We expect a clean and quality tea industry. There is a lot of corruption in the industry and low quality tea is rampant,” the minister said.