Revitalizing the Tea Industry: A Crucial Step for Export Economic Growth

President Ranil Wickremesinghe emphasized the crucial role of the Sri Lankan tea industry in transitioning the country towards an export economy. He underscored the need for a comprehensive promotion strategy, developed in collaboration with both public and private sectors. The President noted that “Ceylon Tea” is a world-renowned brand and should be further promoted through a new strategic program.

President Wickremesinghe made these remarks while addressing the opening ceremony of the “Colombo International Tea Convention,” which commenced this morning (25) at the Cinnamon Grand Hotel in Colombo. The two-day convention, themed “Tea : A Lifestyle and a Livelihood,” has been jointly organized by the Colombo Tea Traders

Association and the Sri Lanka Tea Board. An exhibition featuring tea producers and related businesses in Sri Lanka was also part of the event.

Industry experts, leading brands, and social organizations from numerous countries, including Kenya, China, India, Japan, the United Kingdom, the Gulf countries, and the United States, gathered at the convention, representing the entire global tea value chain from crop to cup.

During the ceremony, Mr. Sanjay Herath, Chairman of the Colombo Tea Traders Association, presented a special souvenir to President Ranil Wickremesinghe.

Addressing the gathering the President further elaborated,

As we are meeting here today, the Parliament is debating the Economic Transformation Bill. I need not tell you what we underwent in the last four years. But as we emerge from bankruptcy, we must remember that we still need foreign exchange to pay for our goods. The decision of the government is to transform the economy in the next decade into a highly competitive, export-oriented economy based on net zero and digitalization. The principles and institutions are contained in this bill, which is being debated today.

I hope both sides of the house will vote for it, though there is a big question mark. Nevertheless, I don’t intend to speak on the bill itself but to refer to the role that the tea industry has in achieving this transformation. Our transformation from a feudal economy to a modern economy in the 19th and 20th centuries was driven by our plantation industry, by tea. A lot of modernization methods may not have come into being if there had been no tea industry. And certainly, Ella would not have been a tourist attraction without the tea industry coming into being.

So now we are at the next stage. And let’s be realistic. We are a country that broke up our capital formation, which came out of land and plantations, for about 30-40 years. Now we are trying to recapture that and to bring plantations up to play a role in the future.

So let me first tell you the first step. I don’t think we need plantations. We need a thriving agro-business, both of smallholders and large management companies, who will look at the highest earnings possible. So that is the beginning.

We have to start reforming from inside. Of that, two measures I must mention: one, the need to resolve the issue of remunerations. We have to remember that those who worked in the plantations are some of the people who are at the worst end of the bankruptcy in the country. Secondly, to ensure that we transition to agro-business, we will now extract all the line room areas and the surrounding areas and take them back to the government to re-gazette them as villages so that the line room concept will disappear as people start building.

But then, that’s the part of the world we live in. No one lives next to a factory. They come from nearby. If you go to the coconut estates, we don’t have anyone living on the lands that belong to us. This is especially because the multi-dimensional poverty indicators in Nuwara Eliya are very high, higher than some of the northern areas that were affected by the war. So these are some of the issues we have to resolve.

Thirdly, there is the question of the debt incurred by some of the enterprises, especially the small enterprises, during this period and how we resolve it. Fourthly, a matter which concerns us and others is the access to the Russian market.

Sanctions have not in any way set back Russia; they have somehow or other come into Asia. The problem is for those of us who have to trade with Russia, and maybe those will require a new look. But we have to wait for the outcome of the US presidential election. Until then, you have to use your means of how you get your tea across to Russia, which I should not know.

But what is the model of our enterprises? We have the smallholders, and how does the plantation industry become agribusiness? Are we going to stay only with tea, or are we going to allow smart agriculture in your areas? Give your means. Those could include forestry, and in time to come, there will be land opened up in other parts of the country for agro-businesses to grow. So there are opportunities to explore.

I have no issue with that. Some of our companies have gone abroad and established themselves elsewhere. That’s not a problem with the government as long as we are the biggest player in the game. Subject to that, we can go ahead because Sri Lanka must have a dominating position in the market. But having said that, what is the future of tea? Are people going to drink tea the way we drink tea? What are the Millennials, Gen Z, and all going to do? Now that’s your future. And that future is not in Sri Lanka, except for the promotion and the R&D you are doing here. You have to carry your battle straight into these areas, into Europe and America. Are they going to drink iced tea? Are they going to have a tea drink? We do not know.

To help that, Sri Lanka will bring the climate change legislation and the new environment laws which will enable us to hit net zero even before the target date. So that is the help we can provide there. But what people are going to drink is something you all have to decide. Or will you be eating something with tea? We don’t know. We just can’t say what it is. And that is where the battle is.

So we now have to look at the TRI. What have they done, what should they do for the future, and make it a joint partnership between the government, which will provide funding, and the private sector. So I think, in a way, we have to look now not at the tea board or the tea smallholders. They are all there. They all have to be restructured. But the Tea Research Institute and how we will build it up.

Those are my thoughts on the industry. You ll are the ones who are in the game, and it’s for us to look at the future because many of the problems we have mentioned are capable of being settled by us. But we have a future out there. How are we going to keep those markets and expand them? So I wish you all the best in your deliberation.

Minister for Agriculture and Plantation Industries Mahinda Amaraweera,

Over the decades, we have embarked on a transformative journey to strengthen and sustain our tea sector. By the end of 2024, we will establish a globally accepted national sustainability standard for Ceylon tea. This is a significant milestone for the Sri Lankan tea sector and a testament to our commitment to addressing the challenges of climate change and ensuring the development and well-being of plantation workers and smallholder farmers. This new standard will guide the development and implementation of a regenerative agriculture model, promoting low-carbon tea production. This multi-procedure approach includes conducting a strong life cycle analysis to ensure our tea production processes are environmentally sustainable and economically valuable.

This convention is an important forum for Ceylon tea and global stakeholders. We are facing a critical time for tea worldwide, and the theme of this convention, “Tea: A Lifestyle and a Livelihood,” is timely and crucial for the tea industry. The conversations planned over the next two days are very important for the industry’s future.

My heartfelt gratitude goes to the Organizing Committee, the Colombo Tea Traders Association, and the Sri Lanka Tea Board for their effort and commitment to making this convention a success. I wish to thank everyone who has gathered here to shape a better future for tea and hope the convention will cover the entire tea value chain from crop to cup.

The event grace the presence of notable dignitaries including Chief of Staff to the President and Senior Advisor to the President on National Security Sagala Rathnayaka, Secretary of the Ministry of Agriculture and Plantation Industries Janaka Dharmakeerthi, Chairman of the Sri Lanka Tea Board Niraj de Mel, Co-Chairmen of the Colombo International Tea Convention Mr. Ganesh Deivanayagam and Anil Cooke, along with tea plantation owners, tea factory owners, and local and foreign delegates from the tea industry.