Spice traders call for national action plan to rescue industry
"Production is the main issue. We need a national action plan, and we need it now before Indonesia, Malaysia, India and Vietnam overtake our spices industry"
In the backdrop of lowered spice production in Sri Lanka, Chairman of the Spices and Allied Producers and Traders Association, Viren Ruberu, called for the formation of a national action plan to develop the industry.
“Production is the main issue. We need a national action plan, and we need it now before Indonesia, Malaysia, India and Vietnam overtake our spices industry.” Ruberu stated.
Citing Central Bank statistics for the end of May, Ruberu noted that with the exception of Cinnamon, spices such as pepper, cloves, citronella, and nutmeg declined in production, whilst overall agricultural exports dropped by as much as 11.8%.
He further noted that production of Cinnamon increased by 11%, boosted by an increase in land area available for cultivation from approximately 4,471 hectares in 2005 to 30,500 hectares in 2010.
“When I took over as Chairman last year, pundits said that our post war economy was bright, that global economies would grow and the recession in Europe would ease, and that Sri Lanka was bound to benefit from the ripple effects of this growth. Nothingof thesorthashappened.”
“The question is where do we go from here? In the case of Ceylon Cinnamon, we need to market it the way Ceylon Tea is marketed by local brands that are our very own. Even the diversity in color and taste can be effectively niche marketed. Every district has its unique inherent character. We have to move away from tradition and introduce our own brands,” he stated.
Taking note of the 13 Regional Plantation Companies (RPCs) which had joined the Spices and Allied Producers and Traders Association, Ruberu urged the Minister of Minor Export Crop Promotion, Reginald Cooray, to support and encourage the companies in their efforts to diversify their plantations into spices.
“Although the RPCs have planned to open up around 1,000 hectares, this journey has become very slow. As it is they are bound by a captive wage structure unrelated to productivity and current costs, they are also bound by a lease period, they are living on borrowed capital, so will they risk going into unknown territory?”
“Their success could have a huge impact on the spice industry in this country but they need encouragement. We could seek international funding specifically for such a purpose and grant soft loans on concessionary terms for spice production for the big players as well as the whole community.” Ruberu stated.
Making reference to the Indo-Sri Lanka Free Trade Agreement, Ruberu noted that trade balance was heavily weighted in favor of India, due in part to concessionary tariff rates for Indian exporters under the agreement.
“For certain commodities India has imposed CAP. A 2,500 tonne CAP on the export of Pepper is an example, as a result of which Sri Lankan exporters have not exported any Pepper to India under the ISFTA.”
Ruberu called on Minister Cooray to work towards eliminating such non-reciprocal factors in order to improve export figures further.