Stakeholders discuss action plan for spices and allied products industry

By Cheranka Mendis

The existing act in the spices and allied products industry should be amended to encourage individuals to invest in the sector as well as an action plan to increase in productivity and support the industry.

Minister of Minor Export Crop Promotion Reginold Cooray speaking at the AGM of Spices and Allied Products Producers’ and Traders’ Association (SAPPTA) yesterday stated that the Government is aware that steps should be taken to improve the productivity and efficiency of the sector in order for it to play a dynamic role in the future of national income.

Cooray asserted that changes to the Act will be made soon to cater to the present needs and demands of the industry in consultation with SAPPTA. A draft of the amended Act will be handed over to the Association prior to establishing the renewed Act. “We want to work together constitutionally and legally with the Association which represent the stakeholders of the industry to ensure that the steps taken will give the maximum benefit for those engaged in the industry,” Cooray said.

“To attract investors we need two things,” the Minister said. “We need to improve the extension of land and to increase productivity in existing estates.”

As of now every year land extension for spices and allied products is extended by 3000 hectares.  Cinnamon extents have increased from 4471 hectares in 3005 to 30,500 hectares in 2010. As at end May 2012, overall total export production declined by 5.4% and agriculture by 11.8%. Pepper declined by 38%, cloves 42%, citronella 37% and nutmeg by 7% while cinnamon increased by 11%. A key issue at present is that the industry is functioning on ‘traditional, outdated and a feudalistic’ manner making it hard to compete in the international market. New technology that is used by other countries to carry out successful business on the industry must be pursued by local producers and cultivators.

“The Government should take a leading role in this matter. As of now the technology we embrace as new are the outdated versions which hinder our competition in the world market.”

New systems and good management practices should also be introduced to the sector to move away from being ‘just a buying-selling deal industry.’ The existing practices are “not adequate,” he said and is “next to nothing” compared to high standards maintained by other countries engaged in the same industry.

“We must be fast in these transformations. We must be vigilant of the new practices and technology adopted by the world and move accordingly.”

To support this, research and development carried out should be relevant to the demands of the country, the farmers and the entrepreneurs. Specific issues should be focused on and the research should service immediate needs. Cooray announced that a symposium was held with researchers and developers recently on this regard of which a summery is to be published soon. The summery document will be printed and distributed among farmers and those engaged in the trade.

The country should also move away from cottage industry based spices and allied products industry to one where large scale factories are operating in the market. This would give an edge to the products in the world market, he said.

The public and private sectors should work together by following a clear set of rules to benefit both sectors as well, Cooray added.

Speaking of the Government’s support to the industry Cooray noted that Army Camps and Prison Camps have now started cultivating spices in their premises and that under ‘Divi Neguma’ program plants have been distributed among farmers to increase production of spices. Some 260 graduates have been employed this year as extension workers for Provincial Councils to ensure that work in the related field is being carried out to its maximum. Several Spice Clinics have also been held during the year in Alpitiya and Yatinuwara where experts have gone to grassroots levels to solve issues in the field and provide immediate remedies if possible.

Re-elected Chairman of SAPPTA Viren Ruberu addressing the gathering requested the Minister to work towards eliminating the non reciprocity factors of the ISFTA agreement to reap the full potential of the Indian market.

“ISFTA is heavily weighed in favour of India. Bilateral trade between the two countries has grown four times in the last nine years, the trade is worth US$ 5 billion. However our export to India is valued at merely US$ 500 million. Even in this 80% are exported under concessionary tariff regime afforded to India under ISFTA.”

He stated that for certain commodities India has imposed CAP such as a 2500 ton CAP on exports of pepper.

“As a result, Sri Lankan exporters have not exported any pepper to India.”

He noted that going forward cinnamon should be marketed in a similar manner of Ceylon Tea as the industry has acquired a cinnamon logo as Pure Ceylon Cinnamon as well.

“The RCP’s should also be given support to follow their goal of opening up 1000 hectares by seeking international funding for soft loans on concessionary terms for spice production of big players in the market. We need a national action plan.

We need it before Indonesia, Malaysia, India, Vietnam and others overtake us,” Ruberu said.