Sunday Oct 13, 2024
Sunday Oct 13, 2024
Wednesday, 9 October 2024 00:43 - - {{hitsCtrl.values.hits}}
Continued from yesterday
Capacity building on digitalisation and training
Digital literacy: Implement digital literacy programs to train tea growers and workforce on using digital tools and platforms effectively. This will ensure that all stakeholders can benefit from digital transformation.
Adoption and integration: Provide ongoing technical support and resources to help stakeholders adopt and integrate digital technologies into their operations.
Innovation and research
Enhancement: Invest in research and development to explore new digital technologies and innovations that can further enhance the tea value chain.
Piloting: Launch pilot projects to test and demonstrate the benefits of digital technologies in different aspects of the tea value chain.
Priority F: Tea sustainability and climate resilience
Sri Lanka’s tea sector must prioritise tea sustainability and climate resilience to ensure adherence to international business and environmental standards, while preserving the unique quality of Ceylon Tea. This approach is vital for positioning the country at the forefront of global sustainability practices and securing the future of its tea industry.
As climate change accelerates and global market preferences increasingly favour sustainable products, the sector must integrate climate adaptation strategies, sustainable business models, and rigorous environmental practices. By aligning with international standards such as Global GAP (Good Agricultural Practices) and GMP (Good Manufacturing Practices), and meeting the stringent requirements of US and EU markets, Sri Lanka’s tea industry will enhance its global competitiveness. Partnerships with organisations like the Ethical Tea Partnership (ETP), which promotes responsible sourcing, ethical labour, and environmental stewardship, further bolster this effort.
These initiatives are designed not only to protect the distinctive identity of Ceylon Tea but also to ensure long-term resilience and business sustainability in a rapidly changing global landscape. By adhering to internationally recognised environmental standards, Sri Lanka’s tea sector will fortify its reputation as a leader in high-quality, environmentally sustainable tea production.
Ultimately, the adoption of global standards and sustainable practices will allow Sri Lanka to preserve its tea legacy, maintain market access, and meet the evolving demands of modern consumers, all while safeguarding the environment and contributing to the sector’s resilience in the face of climate change.
Key components
Climatic adaptation
Resilient: Develop and promote climate-resilient tea varieties that can endure extreme weather conditions like droughts, floods, and irregular rainfall. This ensures tea production remains stable despite the increasing challenges posed by climate change.
Strategic changes: Implement strategic changes in planting schedules, water management, and soil conservation techniques to mitigate climate-related impacts, ensuring both productivity and sustainability.
Forecasting: Establish early warning systems for weather patterns and potential risks, allowing growers to take proactive steps to safeguard crops and optimise resource use.
Business sustainability
Responsive: Foster the adoption of sustainable farming methods, such as organic cultivation, integrated pest management, and agroforestry. These practices not only improve tea quality but also minimise environmental damage, reducing the carbon footprint of tea production.
Improved efficiency: Promote efficient use of water, energy, and agricultural inputs to cut costs and lower environmental impact, driving both business and environmental sustainability.
Ethical production: Ensure that all aspects of tea production—from cultivation to processing and distribution—adhere to sustainability principles, thus meeting international norms and consumer expectations for ethically produced goods.
Environmental standards and certification
Certification: Encourage tea producers to obtain certifications such as Rainforest Alliance, Fair Trade, and Organic, which are globally recognised for promoting sustainable, ethical, and environmentally sound practices.
Benchmarking: Establish robust systems to monitor compliance with environmental regulations through regular audits and assessments, ensuring ongoing adherence to international sustainability benchmarks.
Conservation: Implement measures to conserve biodiversity in tea-growing areas, such as protecting natural habitats, promoting agroforestry, and minimising the use of harmful chemicals to flora and fauna, aligning the tea industry with global environmental priorities.
Priority G: Tea sector institutional reform
The Government occasionally revisits its stance on public service restructuring, yet Sri Lanka said to be remained significantly behind in reforming the tea sector’s institutional mechanisms. A comprehensive analysis, incorporating multistakeholder participation and drawing on both local and international best practices, is essential to drive this reform forward.
The strategic initiative, which may be named the Tea Sector Institutional Reform, aims to align the restructuring of key tea-related government agencies with the broader national efforts. This reform must focus on enhancing the efficiency, effectiveness, and coordination of institutions across the tea sector, ensuring smoother transitions and a more streamlined, responsive framework. The goal is to create a robust institutional structure that supports the sustainable growth, competitiveness, and modernisation of Sri Lanka’s tea industry4.
Given the likelihood of resistance from established stakeholders, it is crucial to approach restructuring with a clear, evidence-based strategy and a collaborative framework. Early engagement with stakeholders and consensus building will help to minimise disruptions and foster cooperation. The focus should be on improving coordination between agencies, streamlining decision-making processes, and enhancing service delivery to all tea sector participants.
This reform will ensure smooth integration of institutional changes and maintain the sector’s ability to effectively respond to both local and global challenges by aligning with the Government’s broader restructuring initiatives and prioritising financial efficiency.
Key components
Institutional restructuring
Identification: Conduct a comprehensive review of the existing organisational structures, roles, and responsibilities of key Government institutions involved in the tea sector. Identify areas for improvement and restructuring to enhance efficiency and effectiveness.
Capacity building: Develop and implement capacity-building programs to enhance the skills and competencies of government officials and staff. This includes training in modern management practices, regulatory frameworks, and industry-specific knowledge.
Service improvements: Simplify and streamline administrative processes to reduce bureaucracy, improve service delivery, and enhance responsiveness to the needs of the tea sector.
Policy and regulatory reforms
NDGs: Ensure that the policies and regulations governing the tea sector are aligned with national development goals and international best practices. This includes updating outdated policies and introducing new regulations to address emerging challenges and opportunities at least once in 5 (or 10?) years.
Transparent and accountable governance: Strengthen regulatory oversight to ensure compliance with industry standards and promote transparency and accountability practices. This includes regular audits, inspections, and enforcement of regulations.
Stakeholder engagement
Engagement: Establish a collaborative framework for engaging with key stakeholders, including tea growers, processors, exporters, and industry associations. This includes regular consultations, workshops, and joint decision-making processes.
Auditing: Promote transparency and accountability in the operations of government institutions by implementing robust reporting and auditing mechanisms. This will help build trust among stakeholders and improve governance.
Innovation and technology integration
Integration: Integrate digital technologies into the operations of government institutions to improve efficiency, transparency, and service delivery. This includes developing e-government services, digital platforms for stakeholder engagement, and data management systems.
Enhancement via R&D: Invest in research and development, monitoring to explore innovative solutions for enhancing the effectiveness of government institutions in the tea sector. This includes partnerships with academic institutions, industry experts, and international organisations.
Monitoring and supervision:
KPIs: By incorporating comprehensive evaluations and Key Performance Indicators (KPIs) based on international best management models, the institution(s) can achieve effective monitoring and supervision. This approach involves establishing a systematic framework to regularly assess the institution’s performance against predefined benchmarks. KPIs should be clearly defined to measure progress in achieving strategic goals, such as response times, compliance rates, and impact outcomes. This data-driven approach not only provides transparency and accountability but also fosters a culture of continuous improvement, enabling the institution to adapt to changing needs and enhance its overall performance.
Global standards: By adopting global standards such as the Balanced Scorecard, Six Sigma, or Total Quality Management, the institution can ensure that its operations align with best practices in efficiency, effectiveness, and accountability. Periodically conduct evaluations, concentrating on areas like operational efficiency, service delivery, and stakeholder satisfaction.
Better evaluation: The 360-degree feedback method is indeed a better evaluation method, at least to be conducted every three years. It involves collecting feedback from a variety of sources around an individual or institution, including peers, subordinates, supervisors, and sometimes external stakeholders or clients. This comprehensive approach provides a well-rounded perspective on performance, strengths, and areas for improvement. The tea institution(s) can use 360-degree feedback to evaluate the performance of employees, teams, or even the efficacy of specific programs or initiatives. It aids in identifying performance gaps, enhancing leadership skills, and improving overall organisational effectiveness by integrating diverse viewpoints.
Incentivising performances:
A combination of financial and non-financial strategies can effectively motivate officials—a crucial element in enhancing service delivery to achieve KPIs. Developing these incentive mechanisms hinges on establishing a robust performance measurement methodology. Historical evidence, however, suggests that incentive schemes can endure even without achieving specific KPIs. Best practices include performance-based bonuses, which link part of compensation to achieving KPIs; recognition and awards to publicly acknowledge accomplishments; and career advancement opportunities tied to performance. Additionally, offering professional development, ensuring KPIs are clear and realistic, fostering public accountability and transparency, implementing regular feedback mechanisms, and promoting team-based incentives can all contribute to improved performance. Prioritising work-life balance and aligning incentives with public service motivation further enhance effectiveness. Each practice must be tailored to the local context, culture, and existing systems to ensure sustainability and impact.
Priority H: Tea legislation review
The Tea Control Act of Sri Lanka, commonly referred to as the Tea Act, is a cornerstone in the regulation and management of the nation’s tea industry. The act, originally enacted in 19575 (1949?) with several updates later, plays a crucial role in overseeing the cultivation, production, marketing, and export of tea—one of Sri Lanka’s most significant economic contributors. The act plays a crucial role in ensuring the sector’s orderly growth and sustainability, within the business objectives as tea has a deep place in the country’s history and continues to be a primary source of export revenue.
However, with changing global dynamics, there is an urgent need to modernise Sri Lanka’s legal framework governing the tea industry. The primary objective of this modernisation is to update the Tea Act, aligning it with contemporary challenges and opportunities. Key focuses of the proposed revisions include promoting sustainable growth, ensuring gender inclusivity, and enhancing the international competitiveness of Sri Lanka’s tea sector.
Updating the Tea Control Act must involve a comprehensive review of existing regulations, drawing on insights from both local stakeholders and international experts. The updated Tea Act will adopt international best practices, particularly geographical indications (to protect the unique identity of Ceylon Tea) and the integration of digital technologies for improved efficiency and transparency across the supply chain, as well as removing redundant sections.
By incorporating these elements, the revised Tea Act aims to reposition Sri Lanka’s tea industry as a resilient, forward-thinking sector capable of thriving in a dynamic global market. This reform will not only preserve Sri Lanka’s rich tea heritage but also ensure that it continues to evolve, empowering smallholders, enhancing gender equality, and fostering innovation.
Key components
Updating the Tea Act
Multistakeholder consultations: Revise and update the existing Tea Act to reflect current industry practices, technological advancements, and global standards. This includes addressing gaps and outdated provisions that may hinder the sector’s growth.
Engage with a wide range of stakeholders, including tea growers, processors, exporters, and regulatory bodies, to gather input and ensure that the updated legislation meets the needs of all parties involved.
Review and fresh perspectives
International best practices: Leverage the knowledge and experience of local experts who understand the unique challenges and opportunities within the Sri Lankan tea sector. Their insights will be crucial in tailoring the legislation to local conditions. Incorporate perspectives from international experts to ensure that the updated Tea Act aligns with global best practices and standards. This will enhance the competitiveness of Sri Lankan tea in international markets.
Regulatory framework
Compliance and enforcement: Strengthen the regulatory framework to ensure compliance with the updated Tea Act. This includes establishing clear guidelines, monitoring mechanisms, and enforcement procedures.
Institutional framework:
Tea sector institutional reform: It must carefully evaluate the tea sector’s institutional framework to learn from past successes and failures and shape its future. Institutional reforms should align with the digital government agenda, adopt international best practices, and incorporate the private sector’s experience and expertise. A key question is whether the current government-led setup or a public-private partnership (PPP) model would be more effective, especially considering that private and public representation can contribute more to the sector’s growth than traditional bureaucratic systems. Institutional behaviour must be publicly accessible, transparent, accountable, and focused on delivering results that are both effective and efficient. A comprehensive model for achieving this is yet to be developed and will be based on detailed analysis and careful consideration of best practices.
The institutional setup should take into account the integration of Regional Plantation Companies (RPCs) into governance, incorporating the lessons learned from the privatisation process. It’s crucial that stakeholder collaboration goes beyond mere representation to involve real responsibility, empowered through a shared governance mechanism. These issues will be explored in greater detail in a separate section, with a focus on ensuring that the tea sector’s institutional structure is both effective and adaptable for the future.
Fiscal and expenditure framework
Transparency and accountability: Promote transparency and accountability within the tea sector by implementing robust budgeting, reporting and auditing requirements. This will help build trust among stakeholders and improve governance.
Sustainability and inclusivity:
Sustainability: Integrate provisions that promote environmental sustainability, such as sustainable farming practices, waste management, and biodiversity conservation.
Inclusivity: Ensure that the updated legislation includes measures to promote gender inclusivity, such as equal employment opportunities, support for female entrepreneurs, and protection against discrimination.
Implementation and monitoring:
Continuous monitoring: Implement the updated Tea Act and establish monitoring mechanisms to ensure compliance and assess the impact of the new legislation.
Providing subsidies and incentives to various agricultural sectors has been a practice for many decades. In certain situations, such as short-term production issues or market fluctuations caused by external factors, government financial assistance may be justified.
For instance, if the international market for tea were to collapse due to a global economic crisis, the Government should consider implementing a time-bound assistance program.
Short term assistance programs should be periodically reviewed to determine whether continued support or sectoral transition is necessary based on a thorough situation analysis. However, the indefinite continuation of subsidies or Government support in any agricultural sector is counterproductive and inefficient. If a sector is proven to be unsustainable in the long term due to socio-economic, climatic, or scientific factors, the government’s focus should shift to supporting the transition (another form of subsidies based on true financial analysis) to more viable alternatives (i.e. British’s transition from coffee to tea). Subsidies, when funded through tax revenue, can make both the sector (distorting market competition) and the country unsustainable if not managed carefully. It leads to inefficiencies and wasted resources.
If subsidies are utilised by producers without optimising yields, total production can actually decrease due to lower break-even points. For example, a farmer might achieve the same profit by producing 90 kg instead of 100 kg with the help of a subsidy, as the cost of production is reduced. This can lead to complacency, where producers focus more on maintaining profits rather than maximising output, ultimately resulting in lower overall production.
There are instances where subsidies or financial support are provided simply due to popular demand, but this should not be the future approach for a country like Sri Lanka. Moving forward, decisions on subsidies must be based on a clear assessment of long-term viability, ensuring that government resources are allocated in a way that enhances productivity and sustainability rather than perpetuating inefficiencies. (Concluded)
(The author is a Digital Agriculture Strategy Expert, a former top agriculture and policy specialist for the Sri Lankan and US governments, is currently leading a number of agriculture sector policy and digitalisation initiatives locally and internationally. His considerable experience combines policy formulation and the use of digital tools to improve efficiency and sustainability in the agricultural sector.)
Footnotes:
1Subsidies and grants can be considered under specific conditions to invest in activities that have the highest potential, biggest value addition, but higher risk as a start-up
2May be a combination of interest portion of CESS & a seed fund
3censere
4A PPP must be a good addition, but need to be carefully crafted for the successful implementation, i.e LankaPay- https://www.lankapay.net/en
5Some reference found for Tea Act 1949 as at https://www.srilankalaw.lk
