22/08/2010 (The Island) - Minister of Plantations, Mahinda Samarasinghe vowed to assist in the development of the plantations sector by providing beneficial policies. He urged the planters to play fair and assist in the country’s efforts to realise a strong economic growth.

The Minister addressing the 156th Annual General Meeting of the Planters’ Association said that the assistance provided to them by the government was insufficient but is working on a system to further develop the sector.

"The Ministry is working on new policies to benefit the planters in the country," he said adding, "One policy was already approved and would take affect from November 1 this year providing financial assistance of Rs. one billion annually to the sector for the next five years."

"I urge the planters to play fair in a give-and-take manner. The government would assist the sector to develop, but the planters should reinvest a part of the earnings in developing the country’s economy."

Further, he said, palm oil has been identified as a crop that could yield better returns. The government is expecting to develop palm oil cultivation from the current 5,000 hectors to more than 25,000 hectors in the near future.

Coconut oil production has boomed since the introduction of taxes on palm oil imports, yet competition is high. He said that 70 percent of the coconuts in the country are used by householders while some are exported.

"Low coconut oil production in the country has led to high prices and yet, over-taxed palm oils are cheaper. This is due to high household consumption."

He said the palm oil industry would assist the country and the government was working on bringing high quality seeds from Indonesia.

The Minister pointed out that high labour costs in the country have been a significant threat to the plantations sector development, accounting for 65 percent of total manufacturing costs.

He said discussions with the labour minister are on-going in a bid to solving issues benefiting both the planters and workers.

"This is mainly due to low labour availability in the sector as it has been recognized as a low class occupation; the government is working on a system to change this mentality to help the sector develop while bringing in high revenues to the workers, thus providing a win-win situation."

"The sector also needs assistance with replanting, particularly the tea sector. Smallholders are playing a vital role, but they are facing difficulties finding necessary funds to replant crops," the minister said.

"The Treasury is working on a system to provide loan schemes and subsidies to smallholders. Meanwhile, it has also been identified that smallholders cannot pay their loans due to the long time period required for their crops to yield. The ministry is working on an assistance scheme to help smallholders earn while their crops grow."