Sri Lanka gives incentives to tea, rubber sectors

Dec 30, 2008 (LBO) – Sri Lanka’s government has moved to protect and revive the tea and rubber industries with a host of incentives announced in a wide-ranging economic stimulus package. These measures meet long-standing demand of tea cultivators, especially small farmers, and factory owners.

The government will also set up a state trading institution through the tea board that will buy tea and also provide three months credit for exports to Iran and Russia, both major markets.

Amunugama said the government will supply mixed fertiliser at 1,000 rupees for a 50 kilo bag to tea smallholders to reduce their production costs, another long-standing demand of small farmers.

The government will also suspend for one year repayment of loans taken by tea factories owners to modernise their factories.

It will impose a two percent extra cess when tea prices exceed 300 rupees a kilo at the Colombo auctions and use the funds to subsidise fertiliser.

In the rubber sector, the government will try to ensure rubber growers at least 150 rupees a kilo of latex. Current prices are around 100-120 rupees.

It will also suspend export cess on locally made rubber products.