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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Treasury highlights state plantation woes

Treasury highlights state plantation woes

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1Treasury highlights state plantation woes Empty Treasury highlights state plantation woes Tue Jun 05, 2012 11:12 pm

CSE.SAS

CSE.SAS
Global Moderator

Large tracts of land under state-owned plantation companies are sparsely used while low productivity and poor governance continue to impede this sector from realising its true potential. Scientific knowledge available in the country’s research institutes are not being utilised either.

Kurunegala Plantations Ltd., Chilaw Plantations Ltd. and Kalubovitiya Tea Factory Ltd. reported profits of Rs. 254 million, Rs. 121 million and Rs. 82 million respectively in 2011, the Treasury’s latest annual report shows. Elkaduwa Plantations Ltd. reported a loss of Rs. 30.6 million. The number of estates managed by these institutions is 28 on a total land extent of 21,452ha.

"It is noted that the yields in the state managed estates, JEDB and SLSPC are lower than that of the RPCs and the small holdings. In this regard, both JEDB and SLSPC need to be restructure immediately focusing on reducing the cost of production and increasing their yield. The infusion of capital, along with the introduction of technology and new processes will play a pivotal role in turning around the performance of JEDB and SLSPC," the Treasury said.

"The plantation sector faces a number of issues including low level of productivity, high cost of production, low level of investment in plantation crops, declining trends of adaptation of good agricultural practices and stakeholder’s high expectation of government subsidy schemes for the improvement of production. Also it is evident that the scientific knowledge available in research institutions is not linked to extension services. Another major issue encountered is a vast amount of agricultural land is sparsely used, but which otherwise has a large potential.

"The COPE having examined the performance of these SOEs in the plantation sector has found lapses in the governance structure where the decisions taken have resulted in the sub optimal utilization of resources which in turn has negatively affected productivity and there by profitability. COPE highlights many instances of lapses such as eg: JEDB has not submitted Annual Reports since 2006, which has jeopardized transparency and the accountability of the SOEs," the Treasury noted.

"The government ownership of tea and rubber plantations is limited, while having a substantial ownership in coconut plantations. The Sri Lanka State Plantation Corporation (SLSPC) is responsible to manage 9,695 ha while the Janatha Estate Development Board (JEDB) is responsible to manage 11,757 ha.

"Of the total extent of rubber grown in 2011 of 45,875 ha which is 36 percent of the total extent of rubber grown of 126,600 ha was managed by the state sector. However, bearing land of state owned plantations is around 74 percent at 33,945 ha. Total production of Rubber was 158 million Kg in the country of which 0.2 million Kg was produced by JEDB.

"In 2011, Chilaw Plantations Ltd (CPL),Kurunegala Plantations Ltd (KPL), Coconut Cultivation Board and Coconut Research Institute which manages 40 estates altogether, accounts for only 28,797 ha which is 7 percent of the total coconut grown of 394,836 ha. During the year 2011, total coconut sales of KPL and CPL, amounted to 31 million nuts attributing to only about 0.01 percent of the total coconut production in the country at 2,808 million nuts," the Treasury said.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=53675

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