Future of tea and rubber in Sri Lanka


Tea and Rubber plays a very important role in the economy of the country. At Present around 180,000 ha is under bearing tea and 99,000 ha under rubber. About 60 % of tea lands are cultivated by small holders and the corresponding value for rubber is 65%.

In 2014, the foreign exchange earnings from tea, and rubber was Rs. 212 billion and Rs. 6 billion respectively. However the total production of these two crops during 2010-2014, as indicated in the table given below, have fluctuated , not showing any substantial increase.. In fact the total rubber production has decreased from the year 2011.

Tea and rubber Prices:

During the last few years tea prices have gone down. At the Colombo auction, average price of a kg of made tea in Sept. 2014 was Rs. 439.00. In Sept. 2015 this has decreased to Rs. 368. It is likely that this will drop further. On the other hand the cost of production (COP) of tea has increased from Rs. 314 per kg in 2010 to Rs. 434 per kg. in 2014. It is likely that COP in 2015 is even more and would be greater than the average price in 2015. As a result the tea industry is affected to a great extent. Due to the falling tea prices most Tea Small Holders have given up plucking tea . This will tend to reduce the total tea production in the country causing a decline in the export earnings from tea. It will also cause loss of employment to a large number of people such as Tea Small Holders, tea pluckers and other workers in tea small holdings and workers in tea factories etc. causing severe economic problems.

The situation in rubber sector is not better. Rubber yields (kg/ha) have decreased from 1561 kg/ha in 2010 to 889 kg/ha in 2014. There is a shortage of rubber tappers which drastically affects rubber industry. COP of rubber has increased from Rs. 120 per kg in 2010 to Rs. 160 in 2014. More recent figures are not available but it is likely that COP like in the case of tea would be higher than the COP in 2014. Rubber prices have gone down from Rs. 403/kg in 2010 to Rs. 285/kg in 2014. Global surplus may depress rubber prices through 2016 as maturing trees boost production and slowing growth reduces demand in China, the biggest consumer. Due to fall in rubber prices and increasing COP like in the tea sector, many rubber small holders have given up rubber cultivation.

Labour shortage:

It is a common knowledge that at present there is a dearth of labour in both tea and rubber sectors. According to a labour force survey in 2000, 36 % of the labour force was working in the agriculture sector. In 2008 this value has dropped to 33% and in 2014 it has further dropped down to 29%. These data indicate that various factors have forced much of the labour out of the agriculture sector. With implementation of the Megapolis Project it is likely that the percentage of the labour in tea and rubber sectors will decrease further.

Land Degradation:

Productivity of large extents under tea and rubber has decreased mainly due to soil erosion, soil compaction, and nutrition depletion, loss of bio-diversity, etc. All these factors cause productivity of land to decline, making crop production less profitable. The present crisis in the tea and rubber sector can be attributed to land degradation in addition to other factors. Land degradation would cause yields to decline and have a negative impact on our efforts to increase production. The participants of the first national symposium on Land Degradation, held a few years ago, who were representing many land-related institutions in the country, were of the view that urgent action such as implementation of proper land use planning and the soil conservation and environment act etc. need to be taken by the relevant organizations to control land degradation.

In view of these critical issues it is necessary that the authorities concerned, mainly the Ministry of Plantation Industries take necessary action.

What should be done

1. There are some tea and rubber lands in which the annual production is very low. A survey need to be done to identify these unproductive tea and rubber lands and these need to be diversified. Such lands may be put under pasture and have cattle . This will reduce our expenditure on milk imports, and also degradation of the lands will be reduced resulting in less silting of the reservoirs. There are many other crops such as spice crops etc. which could be cultivated on the unproductive tea and rubber lands. These crops would give better returns to the cultivators. An in-depth study need to be carried out to determine appropriate land use in the unproductive holdings/estates giving due consideration to factors such as climate, topography, availability of labour etc.

2. Those tea and rubber lands which are not going to be diversified need to be managed better. In this regard, infilling, cultivation of better tea cultivars and rubber clones and their effective management including better fertilizer and pest management practices, , increased rate of replanting, reducing soil degradation and conservation practices are essential.

Dr. C. S. Weeraratna




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