Tea factories need credit periods to purchase Green Leaf | Daily News

Tea factories need credit periods to purchase Green Leaf

This is written in relation to the extra special gazette notification dated 7th January 2021 according to a directive issued by the President on simplifying the people-friendly management system.

Lalin I De Silva

Hora (thief) is a well-established nickname for certain entrepreneurs in our society. Although a handful of businessmen may fit into this category, nobody seems to be appreciating the wider majority who are tirelessly fueling growth in the economy. Respecting the role played by the private sector will be the first step in reshaping our society to be a developed nation. Sadly, the biggest culprits who kill the entrepreneurial mindset are certain disgruntled and frustrated employees in the state sector that are currently paid by the taxpayers, waiting impatiently to place a spanner in the system. What we expect from the state is to change the system fast so that the systems alone will surface these antisocial elements that are cancerous and injurious to the health of the economy.

Every businessman must be recognized and appreciated for creating employment and looking after their employees from recruitment to retirement. It is about time that the social perception of businessmen in Sri Lanka is changed through a planned intervention.

It is important to study the untold miseries businessmen undergo, especially in a country like Sri Lanka where the creation of jobs/employment is not valued scientifically. More often the outputs of certain grades of the employees in organizations are not measured and rewarded according to their outputs. For that, we are still short of a well-developed national wage policy.

The ongoing wage negotiations of the Plantations Industry are a fitting example of what is elaborated as above. Whilst there are excellent players in the industry we have failed collectively to undertake a systematic job evaluation of all jobs although collective agreements are signed repeatedly for over a decade. A job evaluation is a systematic way of determining the value/worth of a job concerning other jobs in an organization. It tries to make a systematic comparison between jobs to assess their relative worth to establish a rational pay structure. Employees must perceive their employer as fair, equitable, and a provider of equal opportunities for employees. The process for determining pay and promotional opportunities should be transparent for employees to see and understand their purpose of commitment to achieve the goals of the organization. Interested readers may browse the web to understand how a wage system works in the US. The demotivation sets in due to a lack of transparency. This can kill any industry slowly.

Since tea is an international commodity, we must control the cost of manufacture and the average selling price to make a decent margin of profit. Although this is the desired behaviour, how it works is dangerously different. Both history and common sense could be good teachers to solve the issues.

National production of tea is on the decline. Almost 30% of tea factories are closed down due to non-availability of sufficient quantities of green leaf. Even the level of the quality of available green leaf can be understood when compared with the unacceptable percentage of the actual stalky component discarded as refuse tea. We have been pointing out repeatedly that this stalky component can be used to make a good solution of Polyphenols we drink as a tea. The hidden demand for this category although called as Refuse Tea can be understood by studying its value chain. The obvious solution is to authorize to sell it as a product in the open market.

The smallholder sector has beaten the Regional Plantations sector as per the chart above. This should have been the other way about in reality as the RPC sector has direct access to quality inputs such as fertilizer, advisory and R & D. Leaving it with the reader to determine who the actual culprit is in this scenario. We as a nation must support the Tea factory owners to ensure their sustainable growth hence thwarting another possibility of a loss of jobs to many in the industry. We got to be extra quick to help them considering the threat of the global pandemic.

It is a known fact that the payment is made to green leaf suppliers well ahead of the leaf being manufactured and sold. This is highly dangerous in the wake of price fluctuations in the world market. The tea factory owners must be given a minimum of 8 weeks to manufacture the accepted leaf and sold so that they can pay the deserving price to the bought leaf suppliers.

Sadly, the current timing of payment to bought leaf suppliers has been a political decision based on the undiscovered fear of losing votes. This single wrong method of paying the green leaf suppliers alone has contributed to many fraudulent practices in operation. Knowing well that you cannot make an Omelet without breaking an egg, the Sri Lanka Tea Board must take corrective measures quickly.

Most factories are now closed. Process efficiencies are ignored and additives usage is high. This is what I would refer to as a public secret. SL should capitalize on hand plucking/selective plucking and the law must be amended enabling the factory owners to invest on product improvements instead of continuing with making a commodity as we did from the days of James tailor. The industry will become sustainable only when a kilogram of made tea fetches around 10-15 USD. To make it happen we must make products out of tea. Like in the case of cinnamon the genetic resource centre and all universities with the faculties of food sciences must be requested for assistances in R & D. Herbal tea such as Ayurveda tea also seems a preferred option but with right testing, certification (FDA, etc) and labelling. The tea factories (both open and closed) must be transformed as tea product development and export of value-added tea centres with printing, packaging, and marketing facilities included. It is about time that highly paid jobs are decentralized to remote but very healthy locations like Plantations. We are extremely happy that the Sri Lanka Tea Board is moving ahead with the large scale tea infilling program and we will be happier if the Regional Tea Inspectors are adequately rewarded for incremental productivities made through the program based on actual extents determined through authentic survey plans.


The tea factory owners who process 300 MN Kgs of made tea per year and still occupying the position of 4th largest exporters of tea in the world deserve 8 weeks to settle the leaf supplier. The decisions taken based on politics in mind are always short-lived. There is nothing called refuse tea and BM Fannings must be allowed to be sold openly or to make a product out of it. A synergetic effort with the help of the genetic resource Centre like institutions and all universities that has faculties of food sciences must be employed in developing high-value products out of tea. The private sector must be recognized and respected rather than allowing certain disgruntled political ideologies and antisocial elements to generalize and humiliate them. We are calling for help at a time that almost 30% of our tea factories are closed and national production is 70 MN Kgs below compared with the production in 2013. What is sustainable is to treat the root causes and not treating the symptoms for the fear of losing votes.

The writer is a former Senior Planter, Agricultural Advisor, and Consultant