A New Mandate for Sri Lanka’s Tea Industry

COLOMBO, Sri Lanka

Leaders of the global tea community attending the Colombo International Tea Convention last week heard a reasoned and pragmatic assessment of the way forward by Sri Lanka Prime Minister Ranil Wickremesinghe. The occasion was the celebration of the 150^th anniversary of the birth of a tea industry that has grown to employ 20 percent of the nation’s workers while generating $1.5 billion in export revenue. Speaking to convention delegates on the eve of their celebratory banquet, he cautioned all “to take a hard look at the industry when the ball is over and think out of the box to adapt to the emerging challenges the tea industry is going to face.”

Traditional export markets have shifted, there is greater competition among tea producing nations, and consumer demand has dramatically increased due to the affluence of a growing world population, he observed. Productivity lags other countries and the regional plantation companies that manage the tea sector cannot continue to operate at a loss, he said. Sri Lanka must be prepared to face vast social and economic challenges in the years leading to 2050. “The competition is coming up,” he said. Consideration should be given to smaller automated factories and to the growth of competing energy beverages such as Red Bull. The legislature will require that Regional Plantation Companies (RPC) to adopt business practices to stem losses. He also advocated easier access to capital for small family holdings of 50 acres as these ventures are leading the way toward modernization. Imagine tea factories that can fit in a garage, he said. Wickremesinghe expressed confidence in Plantations Minister Navin Dissanayake, the son of a tea grower whose father, Gamini Dissanayake, a generation past, rose to prominence successfully implementing the massive Mahaweli hydropower project. On Sunday Dissanayake met with members of the press representing nine countries. During the previous week the group had traveled the length of the country visiting factories, tea gardens, the tea research institute, the Colombo Tea Auction, the national tea museum, tea landmarks, tea shops and spent hours talking to tea industry executives. The transition from an industry dominated solely by large plantations established during the colonial period to an industry dominated by smallholders is nearly complete. Three quarters of the tea (73 percent) is now grown on small farms. He stressed that Sri Lanka will retain its commitment to ethical employment practices and to the production of clean tea. Quality will not be compromised, he said.

Among the world’s producing countries Sri Lanka stands alone as a supplier of environmentally friendly tea. Prohibitions against the use of pesticides, the limited use of herbicides and reliance on sustainable land practices combine to make the tea uniquely appealing to export markets. In 1995 Sri Lanka was the world’s fourth largest tea producer and the top tea exporting country. Kenya now holds that rank. Sri Lanka has undertaken thoughtful consideration of every aspect of the industry, identifying key stakeholders and their respective interests, Sri Lanka Tea Board (SLTB) Chairman Dr. Rohan Pethiyagoda explains. The industry is determined to balance the needs of all stakeholders during a time of accelerated change. This means the individual stakeholders must cooperate as never before when confronting challenges, he said. During visits to the Sri Lanka Tea Research Center and in conversations with growers, administrators and government officials it was apparent that the country has used the occasion of the year-long celebration of the industry to examine the foundation on which it stands. The U.K. traditions and market that built the island of tea have long since evolved. Ceylon’s teas are today mainly sold as blends. Orthodox teas are considered expensive in the United Kingdom where coffee is a major competitor and specialty teas have grown in popularity. The expectations of consumers in the Middle East and Russia, Iran, North America and Asia and the concerns of customers seeking sustainable, certified tea matters far more relevant to success in 2050 than the demands of traditional trading partners.