Sri Lanka’s rubber trade slams government over misuse of industry funds

February 27 (LBO) - Sri Lanka's rubber trade has cried foul at government moves to deny them cash collected from the sector for its own development, less than a month after tea traders protested the misuse of an industry fund.

The Ceylon Rubber Traders Association (CRTA) said Tuesday that the industry had been officially informed that cost supplements from an industry fund for re-planting and rain guarding of trees, would not be paid.







"This is tantamount to a breach of trust, which will seriously damage the credibility of state agencies in the perception of the industry," the association said in statement.

The cess is collected through a four-rupee charge on exports of raw rubber. Once discontinued, the levy was re-imposed in 2004.

"The objective of the Cess Scheme is the exclusive utilization of the funds collected, through a levy on Rubber exports and imported rubber products, for the benefit of the industry," the CRTA said. "However, it was found to be a convenient resource, readily and consistently available, to be drawn upon to finance the reckless spending agenda of the state authorities.





" The association said the rubber industry learnt with 'alarm and disillusionment' that the government had taken decision to consolidate the funds with the treasury and disburse them according to the priorities set by the fiscal authorities. "This could mean that the Industry may not necessarily be the beneficiary, in any form, of funds speciously extracted from its stakeholders," the association said, "As a consequence, the Rubber Cess Committee of the Ministry of Plantation Industries, which included senior representatives of the industry to guide on the judicious allocation of the funds, will become defunct and the Rubber Cess Act will become a dead letter." Even before the latest information became available, CRTA says the share of funds that was being given back to the industry, had declined. The association charges that only 58 percent of the funds collected had been disbursed last year.

The CRTA has appealed to the newly appointed plantation industries minister D M Jayaratne to intervene. Earlier this month, tea traders also slammed the government for holding back cess funds collected from industry, for other uses such as subsidising overstaffed state agencies.