Jan 13, Colombo: Sri Lanka's tea production rose to 339 million kilograms last year from a 328 million kilograms produced in 2012 as a result of the subsidies provided by the government to the tea growers, the Economic Development Minister Basil Rajapaksa said.
Addressing a tea small holders' meeting held at the Morawak Korale Tea Producers Cooperative Society Hall, Kotapola on January 11 to distribute the once a year subsidy of Rs. 5000 per acre for small scale tea estate owners, the Minister said the increased tea production has earned the country Rs. 1.6 billion.
The Minister commenced the island-wide programme to provide the Rs. 5000 per acre subsidy for soil and water conservation in tea small holdings to empower tea small holders under the 2014 budget from the Matara District.
Nearly 2000 persons representing 387 small holders societies in the district participated in the meeting held under the direction of Plantations Industries Minister Mahinda Samarasinghe.
Minister Rajapaksa pointed out that tea small holders contributed to 70 percent of the island's tea production and added the Government had given much assistance to ensure a sustainable development of tea small holdings.
This has led to a high demand for Sri Lanka tea worldwide resulting in the price of tea going up to Rs.90 per kilo. Sri Lanka's tea consumption per person per year is 1.3 kilo grams.
Out of the island's 206,104 hectares of tea plantations 70 percent are small holdings which are cultivated by 397,223 small holders who produce 1.5 million kilos of tea. The small holdings are spread over 14 districts including Ratnapura, Matara and Galle.
According to Minister Rajapaksa the government has given a subsidy of Rs. 350,000 per hectare of tea land and Rs. 250,000 per re-cultivated hectare. The fertilizer subsidy is Rs. 25 per tea plant. A fertilizer bag of 50 kilo grams priced Rs. 3,500 is sold to small holders at the subsidized price of Rs. 1,500 per bag.
Even when the price of a kilo of tea leaves dropped to Rs. 25 the government did not reduce subsidies, the Minister reminded.
Minister Mahinda Samarasinghe said the government's revenue through tea industry is three times more than the cess tax.
The Plantation Ministry in collaboration with the Bank of Ceylon has also launched a program to provide loans ranging from Rs.300,000 to Rs.500,000 at a 16 percent interest rate to the small holders.