Agricultural Export Sector: Five Updates

Ministry of Agriculture and Plantation Industries Secretary BLAJ Dharmakeerthi said the first half of 2024 saw a significant growth in the agricultural export sector, surpassing the performance of the previous two years.

During yesterday’s press conference at the Presidential Press Centre, he stated that the increase is the result of decisive actions taken to counteract the decline in revenues from agricultural exports observed in 2023 compared to 2022.

Highlighting the remarkable achievement of this progress despite the difficult climatic conditions that the agricultural sector has been facing in recent times, he explained that the proactive measures implemented in 2023 have enabled the sector to grow significantly in the first six months of 2024.

Giving specific examples of the sector’s revival, Secretary Dharmakeerthi said for instance, tea exports have increased from USD 407.6 million in April 2023 to USD 450.5 million in April 2024. Similarly, coconut exports have increased from USD 212 million to USD 263 million during the same period. Rubber exports have also shown a healthy growth, increasing from USD 299 million to USD 335 million by April 2024. Moreover, cinnamon export earnings have increased from USD 53.3 million to USD 56.1 million, while pepper export earnings have increased from USD 13.3 million to USD 14.0 million during the corresponding period.

He said the agriculture sector, known for its volatile nature, faced challenges last season due to reduced tea production, leading to increased demand for fertilisers. Responding swiftly, a special scheme was launched to ensure adequate supply of fertilisers. Under this initiative, arrangements have been made to subsidise the cost of fertilisers at the rate of Rs 2,000 per 50 kg bag. Currently, 10,000 metric tonnes of tea fertiliser has been distributed to the growers and work is on to allocate the remaining 20,000 metric tonnes through collaboration with tea factory owners and other stakeholders.

As part of efforts to boost tea production, Secretary Dharmakeerthi said the subsidy project to support replanting and new cultivation of 745 hectares is ongoing from 2022 and Rs 140 million has been disbursed to 324 tea growers so far. Moreover, a new initiative to plant 800,000 tea saplings has been launched in 2024 with a subsidy of Rs 60 million.

Under the financial supervision of the Sri Lanka Tea Board, the Small Tea Estate Development Authority is to implement a direct tea cultivation project, allocating an amount of Rs 750 million for this purpose.

Currently, coconut shells and coconut-related products contribute as much to foreign earnings as coconut milk products. In 2022, coconut-related product exports generated a record income of $817 million. Despite a decline in coconut production in 2023 due to whitefly disease, effective regulatory and control measures ensured that the country earned $700 million. In April 2024, earnings reached $263.06 million, an increase of 24% compared to the previous year.

On rubber cultivation, he said new plantings were set to cover 921 hectares in 2022 and 2023, while replanted areas covered 2,743 hectares. Plans for 2024 include cultivation of 1,135 hectares of rubber, of which 605 hectares would be newly planted and 415 hectares would be replanted. An amount of Rs 149 million has been earmarked for supply of necessary plants for this expansion. From 2023 onwards, the department has discontinued the previous subsidy scheme for rubber cultivation, opting instead to provide free plants as subsidy to growers.

Below are updates on the five major agricultural export sectors in Sri Lanka;

• Chairman of the Sri Lanka Tea Board Niraj De Mel;

Under the agreement between Iran and Sri Lanka, Sri Lanka started repaying its $250.9 million fuel debt to Iran through tea exports starting August 5 last year.

Under the agreement, Sri Lanka intends to settle this debt by exporting tea. To date, Sri Lanka has repaid $55 million of this debt. In the first four months of 2024, Sri Lanka exported 4.1 million kilograms of processed tea to Iran, a three-fold increase compared to the amount exported during the same period in 2023.

• Chairman Coconut Development Authority, Prof. Roshan Perera;

Regional Development Bank has launched a loan program “Kapruka Jaya Isura” aimed at supporting coconut farmers to increase the quality, productivity and quantity of their produce. The program offers subsidized interest rates of 6% and loans initially go up to Rs 3.5 million, with plans to increase this limit to Rs 10 million. In 2022 and 2023, about Rs 53.4 million and Rs 35.7 million have been disbursed under the program, respectively.

In 2024, 752 producers and 636 exporters related to coconut registered for 1012 products. Moreover, a whitefly control programme was initiated in October 2022 to control the impact of whitefly disease on coconut and king coconut production. Under this programme, 1,051,323 trees were treated, 3046 awareness programmes were conducted and 700 liquid sprayers were distributed among the growers at an expenditure of Rs 85.50 million.

In addition, efforts have been made to create a coconut triangle in the Northern Province, alongside traditional areas. This initiative aims to meet the demand for coconut consumption and export, while also raising living standards in the region. To date, 489,077 coconut trees have been used under this project.

Moreover, thanks to the promotion of Kithul and palm products, both in the domestic and foreign markets, new jobs are being created.

• General Director of Rubber Development Department, CCMuahandiramge;

In 2024, the Rubber Development Department plans to create 115 hectares of new rubber plantations in Monaragala, Ampara and Badulla, areas that are not traditionally used for rubber cultivation. The project has been allocated Rs 18 million and aims to increase local rubber production by 86,825 kg.

In addition, the Rubber Research Institute has launched a project to identify suitable clones for these areas, with an estimated budget of Rs 19.25 million. So far, Rs 17.74 million has been spent, testing 14 existing clones and planning to test 22 more in the future. Eventually, it is expected that about 10 clones will be recommended for temporary use.

From 1 January 2025, rubber and rubber-related products exported to European Union countries must be verified as deforestation-free. Products that fail this verification will not be approved for export. The Department of Rubber Development is responsible for ensuring compliance with the EU Deforestation Regulation (EUDR) and provides the necessary facilities to support this. Given that the European market accounts for over a third of Sri Lanka’s rubber export revenue, compliance with this regulation is crucial.

• Director General of the Cinnamon Development Department, Janaka Lindara;

The Cinnamon Development Department was recently established as part of the Budget 2023 proposal to promote cinnamon cultivation. Its main objective is to promote the Pure Sri Lankan Cinnamon brand internationally. Headquartered near the Galle Pinnaduwa Expressway entrance, it aims to benefit cinnamon exporters, growers and industry stakeholders.

The estimated cost of the first phase of the Cinnamon Gate project is Rs 224,909,704.31 crore, of which Rs 21,857,211.80 crore will be released by May 31, 2024. To increase productivity, the department launched the Pure Sri Lankan Cinnamon project in May 2024, focusing on modern farming methods, post-harvest technology and value-added industries. The project costs Rs 35 crore and aims to benefit about 1,050 direct and 101,000 indirect beneficiaries in key cinnamon-growing districts.

During President Ranil Wickremesinghe’s visit to China in October 2023, an MoU was signed to export Sri Lankan cinnamon to China, opening up a new market and increasing foreign exchange earnings. This new export project, involving selected exporters and farmers, has an estimated cost of Rs 1 million.

• Director, Department of Agricultural Exports (Development), RKW Ranketh Kumbura;

The Department of Export Agriculture has implemented numerous development programs in Ampara District and the Central, Sabaragamuwa, Western, Southern, Uva, Wayamba, North Central and Eastern Provinces. These programs aim to increase production and export capacity, increase foreign exchange earnings and maintain the quality of exported agricultural products.

The initiative involves the cultivation of 15 crops, including cinnamon, pepper, coffee, cocoa, nutmeg, cloves, cardamom, vanilla, turmeric, ginger, areca nut, betel leaf, saffron, citrus and lemongrass. Programs for the development of these crops are ongoing.

In addition, the department provides technical expertise in export crop cultivation through various programmes. These include new crop programmes, small-scale horticulture, productivity promotion, areca nut cultivation, crop value chain development, and turmeric and ginger cultivation. Online training programmes are also offered. Almost 1,500 farmer training programmes have been conducted so far in 2024. (Press broadcast)