Introducing factory modernization, mechanization of harvesting, bringing in drone technology, introducing artificial intelligence and moving into a new wage model will take the country’s plantation industry another 150 years forward, Planters’ Association of Ceylon Chairman Senaka Alawattegama told the Daily News.
When interviewed he said if Sri Lanka aggressively markets its tea and other export crops the country can expand its markets and there was huge potential to do so.
He said tea is now promoted quite a lot in the UK and Canada as a health drink and the tea industry will benefit by getting good prices and better demand in those countries.
“Of course, this industry has survived for 150 years and I believe that it will go on for another 150 years and it will continue. Only thing is we can’t be doing the traditional thing that we did in the past. The simple example is the obsolete wage model. But there are other positive things happening like factory modernization, mechanization of harvesting, bringing in drone technology and the introduction of artificial intelligence which will definitely take this industry forward for another several years.”
With regard to innovation he said they were pioneers. “If you talk about Talawakelle Plantations, we are pioneers in modernizing factories. Most of our factories are modernised and we are putting up a state-of-the-art factory in Kiruwanaganga and no other RPC in the recent past has done it and we are investing over Rs 600 million putting up this factory which is almost completed. The machines are coming in so it will have all the modern things, machinery, tea conveyors, and tea Color sorters. At the same time, even in the fields we have introduced machine harvesters for harvesting, even for rubber tapping they have brought a little machine shaver sort of thing from China. So definitely we are into innovation in a big way.”
He said there are niche markets that the plantation sector could also approach to further boost forex income. “Now we are making handmade artisanal specialties which attract good prices. So there are niche markets which we need to approach. Producing specialty teas and handmade artisanal tea is one area that Sri Lanka can really do well. These are very expensive and a Kilo would go up to about Rs 20,000 to Rs 25,000.
With regard to new investment in plantations he said, “These plantations are given out on a 55 year lease. Now we have finished about 30 odd years out of it. Everybody is talking about why people are not replanting, there is uncertainty after the end of 55 years. RPCs are owned by large conglomerates and large business people. They are not going to invest the money if somebody is going to take the money away in two or three years’ time, they might as well put it in some other business. So the uncertainty is a serious issue and the Government must come out and say this is our policy on land, and this is our policy on plantation then people will align their business according to the policies.”
As I said, it’s up to all stakeholders, particularly the trade unions, to get on board with us and work together for the betterment of our employees as well as the country.
He said the plantation sector production dropped in 2022 where the production figures dropped to 251 million kg, whereas traditionally it hovered around the 300 million or little more than the 300 million mark. But since the fertilizer ban came in from 2021 to 2022, the crop production has dropped by around 16% to 18% on a year on year basis. He said they expect to increase it to 275 million kilograms this year.
He said the industry faced huge challenges because although fertilizer has been made available now it is 10 times more than the price which they used to buy. “So that has a huge impact on our cost of production. From one side, the crop has come down and on the other side, the cost of production is going up due to fertilizer. Even fuel has gone up three fold so is the cost of transport, firewood and packing material. So all in all, there is a huge increase in the cost of production. So although we get a higher price due to the rupee depreciation, we find that at the same time our costs have also gone up. He said although chemicals have just been made when the fields are weedy they cannot apply fertilizer. So first of all once they receive the chemicals, the fields need to be cleaned before applying fertilizer. Also to apply fertilizer they need proper climatic conditions and some sort of rainfall was needed. He therefore said they will probably start fertilizing from about March or April and this trend of low crops will continue for some time and an increase in production is expected by about April, provided all the climatic conditions and rain comes on time.
“We also have a plethora of other issues like wages and things. If there is going to be a Government intervention and they want the wages increased, then these things are going to impact on the total productivity and profitability of all these RPCs.
We need to talk with the trade unions and try to come up with some sort of understanding. We have proposed a productivity-based wage model which has been working very well within certain plantation companies where people can earn even up to about Rs 2,000, Rs 2,500 a day. And if they talk about the monthly salary they can earn about Rs 50,000 to 60,000 a month. There is some sort of reluctance from the side of their trade unions to accept this, but to a certain extent they are also with us in this, but we need to come out with this proper solution rather than going in for this 150 year old wage model where you pay a daily wage and it’s not linked to productivity at all. So if this industry is to continue and to prosper in the future, I think we need to migrate as soon as possible into a productivity based model.”
Alawattegama said the Government should have a proper long-term policy for the plantation sector particularly on fertilizer and chemicals without taking sudden decisions. He said the rubber industry was going through a very difficult period due to pest disease and the rubber production has come down. RPCs cultivated oil palm and were doing well. Some time ago they wanted it to be extended to 20,000 hectares.
And RPCs brought down seeds at very high prices, and once the plants started growing in the nursery, suddenly they said ‘you can’t plant oil palm.’ So as a result, the companies had to incur huge losses. So they have to write off all those things. The country has spent so much foreign exchange to import oil palm. At the time of privatization, RPC’s were given the option of diversifying into different profitable agricultural crops. If you look at the labour availability in 1992, RPCs had 327,000 workers. It has dropped to about 100,000. So we are happy about it, but then this is the trend which is going to take place. So therefore we need to now look at less labour intensive crops.
He said RPCs are looking at expanding into the coconut industry, not only selling nuts but also value added products. Similarly cinnamon is another area RPCs are looking at where value addition where value addition is possible like the production of cinnamon oil. There is a big demand for dehydrated cinnamon leaf and various other products. The RPCs are looking at those areas and they want to expand into that.
Alawattegama said they have now gone into precision agriculture where the bush is given the required amount of nutrients. With precision agriculture there will be less wastage because you know the number of bushes and the required nutrient. So it will be on a placement basis.
“Also we are looking at regenerative agriculture where organic matter is incorporated into the tea and also according to the requirement, we will replace the nutrient so that there will not be any waste. Then we will make use of artificial intelligence, for example like Climate Change. We have established a few weather stations. Which will tell you in advance what the Climate Change is going to be, so that kind of technology is coming in. Also making use of drones to do chemical spraying and mapping of the fields so that you know whether the entire field is harvested. So there are a lot of areas that we are looking at artificial intelligence, IT. All those things will come in and those will assist us in improving the industry standards.
“Our quality is always superior to others. We are the country which produces the cleanest tea and that is the only way we are surviving because of our productivity, if you compare with India and Kenya, they are way ahead of us. In Kenya for each plucker the average is around 60 kilos and in South India, it’s around 40 kilos, whereas ours is around 20 to 25 kilos. So the only way we are keeping our competitive advantage over the others is due to our quality. So we need to maintain it if this industry is going to continue,” the Planters’ Association of Ceylon Chairman added.
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