Government support is needed in long-term financing and regulatory changes to "re-align" the traditional tea sector and help it regain competitiveness, said Malik Fernando, Director Operations of the MJF Group, owners of the Dilmah brand.
For financing, Fernando suggests a model similar to India™s ˜Special Purpose Tea Fund™ for replanting, infilling and rejuvenation aged tea bushes.
"A similar program can be offered in Sri Lanka to all growers, both companies and smallholders," he said in a statement.
"The export levy on bulk tea introduced last year can fund part of this cost. Banks investment funds from VAT savings can also be channelled for such activities.
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The government's budget last year cut value added tax for banks that were meant to go to a special fund to be used for investment in selected sectors. It also raised a tax on bulk tea exports to discourage bulk shipments and encourage value addition.
Out of Sri Lanka™s total 220,000 hectares of tea around 5,000 h