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Guaranteed prices linked to quality

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The Government last week said it would provide the promised guaranteed prices only to producers meeting the quality requiment.

In this regard the government has allocated Rs.690 million per month to provide subsidies to tea smallholders to keep in line with the promised amount of Rs.80 as guaranteed price per kilogram of tea leaves.

Hence according to industry stakeholders, at least 108,000 smallholders have not been eligible for the facility owing to poor quality tea production.
A few Opposition MPs had claimed that the government had failed to fulfill its pledges given through the budget to the estate sector workers and alleged that many had not obtained the guaranteed price promised by the government.

How ever, Minister of Plantation Industries, Lakshman Kiriella addressing a media
briefing stated that only 27% of approximately 400,000 tea smallholders had not obtained the guaranteed price as they had failed to meet the quality requirements laid down by the authorities.

The Government in its interim budget proposals stated that it would increase the minimum guaranteed price for a kilogram of tea to Rs.80. Accordingly, the implementation of the proposal commenced in March this year.

Accordingly, in the event the smallholder receives less than Rs.80 per kilo after the tea is sold at the auction, the Government would pay the remaining amount to match the promised guaranteed price.

Speaking to The Nation Gain on the issue, Tea Commissioner, E.A.J.K. Edirisinghe stated that the Government had formulated certain guidelines and requirements for tea smallholders in order to be eligible for the guaranteed price facility.

“The key factor taken into consideration here is the quality of tea leaves,” he said. Accordingly, each producer is therefore required to pluck at least 60 percent of undamaged tea buds of good quality. “Only then would they be entitled for the guaranteed price,” he added.

However, the government, which had commenced implementing the guaranteed pricing scheme in March, provides the subsidies for those whose quality of tea leaves is lower than 60 percent as well.

According to Chairman, Sri Lanka Federation of Tea Smallholder Development Societies, Neville Ratnayake, the government provides Rs.73 for quality range between 45 percent to 55 percent and Rs.75 for the range 55 to 60 percent.

However, Plantations Minister, Lakshman Kiriella during a press briefing last week pointed out that at the moment approximately 73 percent of the smallholders were entitled for the facility.

According to the Minister, the tea manufactured by the remaining 27 percent of producers was of low quality and therefore would not be entitled for the facility. “If we don’t pay them, then they would make the effort to improve the quality of our tea. That is what we are trying to do,” the Minister told the media.
Ratnayake stated that that those producers whose quality was less than 45 percent of the total product would not be taken into account when providing the subsidy.

 “We as tea smallholders welcome the procedure followed. But it is still at the initial stages and therefore is too early to make a comprehensive comment on it,” he added.

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