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Minister refuses free plant subsidy for big spice growing firms

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22 August 2016 12:04 am - 0     - {{hitsCtrl.values.hits}}

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From left: Primary Industries Minister Daya Gamage addressing the gathering as SAPPTA AGM Sub Committee Chairman S. A. Cader, SAPPTA 2nd Vice Chairman Prins Gunasekera, SAPPTA Chairman Vernon Abeyratne, International Pepper Community Executive Director W. D. L. Gunarathne, SAPPTA 1st Vice Chairman Yaan La Brooy and Ceylon Chamber of Commerce Assistant Secretary General Gillian Nugera look on.

By Chandeepa Wettasinghe
The Primary Industries Minister last week refused to reintroduce the free plant subsidy to big spice producing plantation companies, saying that productivity in the country’s spice industry can be increased if the plants are provided to households.


“Plantations can easily create their own nurseries. If they want, we can provide them with the technology. It’s not rocket science,” Daya Gamage said at the Spices and Allied Products Producers Association (SAPPTA) Annual General Meeting.


SAPPTA Chairman Vernon Abeyratne had requested Gamage to reinstate the subsidy since its removal would have an adverse effect on plantations.
However, Gamage noted that plantations could undertake their own investments, and also should invest 
in practically implementing the research done so far by the cash-strapped government.


“A business can easily spend Rs. 200,000-250,000 for its new plants and the plantation companies have officers with better practical knowledge.  With our limited funds, we have conducted research, but that research has not been implemented well,” he added.

Perhaps keeping an eye on the local government elections coming up early next year, Gamage said that the Rs.125 million allocated 
for planting this year will be provided 
to households.


“The public always want free things. Over 20 years, elections have always been won by giving them free goodies. I took this decision for the good of the country and the people. If we can get them to use those plants, the produce will be exported by you. We can get greater returns, so think a bit,” he told the private sector.
He added that the effort will see the current 32,000-acre spice plantation area doubling and adding greater income directly to 
the grassroots.


Gamage noted that the government will undertake a massive educational programme through mass media, and through 329 Development Officers in Provincial Councils, who are currently idling, in order to educate the people on good agricultural practices.


“We will need to do a lot of education, but you can double your export volumes if you spend a little money to educate them yourselves,” he said.
While SAPPTA Chairman Abeyratne called for increasing the volumes of exports through methods like increasing the plantation area, Gamage requested the business community to venture into value addition, which can increase income by 5-6 times, compared to moderate increases from plantation improvements.


Gamage said that he is willing to invest in infrastructure if the private sector is serious about engaging in value addition.
The country’s spice exports increased by 42.7 percent year-on-year (YoY) to US$ 377.4 million in 2015, after it had declined 25.6 percent YoY to US$ 264.6 million in 2014.
Spice exports for the first 4 months of 2016 declined 32.5 percent YoY to US$ 73.9 million.

WB to provide US $ 108mn for matching fund

The World Bank will be providing US$ 108 million in financing to uplift the country’s spice industry, which will be operated as a matching fund.
“The World Bank programme is also coming in. It’s a US$ 108 million project, and I proposed that it be operated as a matching fund,” Minister Gamage said.
He said that if a business was able to invest Rs. 50 million, the World Bank fund would match another Rs. 50 million, while the government would also ask banks to participate in providing loans up to Rs. 100 million to match the private and multilateral funding.
“So with an investment of Rs. 50 million, you can undertake a Rs. 200 million project,” he said.


The industry is hoping to bring in US$ 1 billion in spice export revenue by 2020. The country’s main spice exports are cinnamon 
and pepper.


Gamage said that the government will undertake research into medicinal properties of Sri Lankan spices, which the private sector can use to market products competitively in the global arena.

 

 


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