Subsidies not the way forward for any industry: Harsha

8 September 2015 02:53 am - 0 - {{hitsCtrl.values.hits}}

A A A

By Chandeepa Wettasinghe
Subsidies given to industries will not be sustainable in the long run and there will be winners and losers in capitalism, ruling coalition parliamentarian and economist Dr. Harsha de Silva said at the Tea Exporters’ Association Sri Lanka (TEA) AGM held recently.

“There is a problem in the industry (tea) and we all understand that. When the industry came to the Prime Minister a few months ago and said, ‘the companies and factories are in trouble’, the government acted on that request and an estimated Rs.900 million had been allocated,” Dr. de Silva said.

The action was miscalculated at the outset with just Rs.416 million a month allocated in the interim budget and including only the smallholders and excluding some plantation companies which needed the support due to guaranteed high wages the smallholders do not have to bear.

Smallholders make up nearly 70 percent of tea production and are present in the lower elevations. Further, of the 700 tea factories in the country, over 400 are in the smallholder areas.

“The government didn’t ignore your requests. The government came to the rescue at least to an extent possible when you needed our help. But subsidies are not going to sustain the industry in the long term,” Dr. de Silva rationalised.

Already, a number of smallholder tea plantations and factories are going up for sale in the southern districts despite the subsidy, according to former TEA Chairman Niraj De Mel.

“A lot of the factories have been put up for sale in Matara and Galle. This is good development. They came the wrong way. Let the bad ones get out. Let the good ones producing good quality leaf stay. Same goes for exporters, brokers and producers,” he said.

Plantation company leaders have said that the smallholders deteriorate the world’s best Ceylon Tea brand due to poor leaf.

De Mel noted that the local industry is badly planned compared to Kenya, the largest tea exporter in the world.

“Kenya produces more tea than Sri Lanka with 80 factories. There’s some method in how they do it – a lot of vision, good direction. Here earlier, the criterion was the availability of leaf. Today it’s how much you pay the politicians,” he added.

In a recent address to the gem industry Dr. de Silva too had stressed the importance of businessmen to play by the rules and not becoming cronies.

He said that the social market economic policy advocated by his government will ensure a socio-economic net for producers and labourers who fall too far.
“We believe if you work hard and play by the rules, you should be able to get ahead in life. But we must not forget that those who own the capital don’t necessarily receive what they put in. Labour must also be part of the equation. It cannot be an appendix,” Dr. de Silva added.

He stressed that industries must go into productivity-based models where those working hard will earn dividends.

The regional plantation companies are set to reach Rs.11 billion in accrued losses by the end of this year.

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 0

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Subsidies not the way forward for any industry: Harsha

Comments - 0

Add comment

RECOMMENDED

‘Spike in blast fishing’ poses renewed threats to Sri Lanka’s marine ecosystems

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Most Viewed in News

Racing event tragedy leaves seven dead including eight-year-old child

Ranil Wickremesinghe caravan moves on despite barking dogs

Sri Lankan among NASA’s new crew for next simulated Mars journey

Man who jumped off Sri Pada Uda Maluwa and went missing, found

Sri Lanka weighs Open Skies amidst plans for national carrier privatization

Gota fires back at Cardinal, rebuts allegations

MIRROR CRICKET

Sahan Arachchige to lead Sri Lanka ‘A’

Is Chamari Athapaththu Sri Lanka’s greatest cricketer ever?

Athapaththu back atop ICC Women’s ODI Batting Rankings

Chamari Athapaththu sets big goal for T20 World Cup

TODAY'S HEADLINES

Sri Lanka to establish new energy sector regulator

Cabinet nod to transfer China-built Mattala airport’s management to Indian, Russian joint venture

Sajith never attends dinners hosted by Ranil Wickremesinghe

One soldier dead, nine injured in road crash

Sahan Arachchige to lead Sri Lanka ‘A’

Dates confirmed for 78th Bradby Shield

SLAS appoints independent committee for investigation

Pakistan lose key players for last two T20Is against New Zealand