Thursday, August 11, 2016

How can we develop Agriculture when the Private Sector Plantation Companies are in a State of Limbo?

As if the “Golden Share” that the Govt. holds is not enough, to tie the Companies up in bureaucratic red tape, where they have to get Govt. permission, that is LONG in forthcoming to put a nail in a wall! How on earth can we actually develop our plantation sector to modernize to survive, when they ONLY have 25 more years on their leases to run.

It must be remembered that the lands were ALL TAKEN OVER BY THE GOVT. an act that has now been proven to have been disastrous for the economy, as it has both resulted in fragmentation of land and resulted in high costs to Govt. of losses, but for those that were privatized on LONG LEASES, the companies were straddles with Golden Share rules of the Govt. that resulted in unfair and unproductive labor terms, that further eroded competitiveness, and kept labor more indentured than ever, due to the strictures laid out for their maintenance.

Upon privatization, various modes of management were used to deprive the hapless shareholders, especially the minority shareholders of the estate companies, by setting up Management Companies that bought over 51% of the Plantation Companies, and levied an unconscionable management charge, that resulted in a losses, that prevented investment in infrastructure for he future, and effective was nothing more than a recipe for squeezing them dry.

The stakeholders have been forgotten. The most vulnerable stakeholders are the workers in the estates who have been led by their Union Leaders on a path of self destruction, where productivity is not rewarded, and in fact discouraged, leading Sri Lankan workers in estates to be the most unproductive. The problem is it is difficult to compare with the new markets such as Vietnam, where the tea productivity is so much that, their profit per kg is higher even if their price is half that of Sri Lanka tea, and due to productivity of their mechanically harvested flat estates, their production volumes are rising with no discernible increase in employee numbers.

There are other factors, the education level, deterring youth from going into this vocation. The other is NOT eliminating unproductive fields for other uses, due to the Golden Share strictures. A future entry will make suggestions for improvement.

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