Dec 31, 2010 (LBO) - Sri Lanka's plantations are considering concessionary loans with interest subsidies from the government to improve replanting of tea, which has fallen behind targets, the Tea Board said.
The plantations ministry wants to increase the re- plantation rate of regional plantations corporation estates to three percent a year from the current 0.5 percent.
An interest subsidy is being considered by the ministry for the RPCs as well as small farmers who now produce the bulk of the crop, the Tea Board said in its third quarter review of the plantations industry.
"Discussions are already underway to negotiate a loan scheme under concessionary interest from the banking chain to the RPCs," it said.
"An interest subsidy is being considered by the ministry. The small holder sector is bound to get a financial hand-out from the government for replanting."
The Tea Board also said measures to accelerate the rate of infilling of bushes on tea estates are also being considered.
Plants would be provided by the state-run Tea Research Institute and Tea Smallholdings Development Authority to small farmers. Most of the RPCs have their own nurseries.
"The yields in the tea sector of Sri Lanka are comparatively low at around 1,600 kilos a hectare as against about 2,000 kilos in India and around 2,600 kilos a hectare in Kenya," the Tea Board review said.
"Consequently the cost of production in Sri Lanka is as high as 2.80 US dollars a kilo compared with 2.00 dollars a kilo in India and 1.20 dollars a kilo in Kenya.
"Thus, it is obvious, that productivity has to increase for the sustainability of the Sri Lanka tea industry. The re-planting and infilling is addressed with a view to circumvent this problem."
source - www.lbo.lk
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