Tea Small Holdings Development Authority Annual Report 2010

Transcription

1 Tea Small Holdings Development Authority Annual Report 2010 No: 70, Parliament Road, Pelawatta, Battaramulla. Telephone : Fax : chtshda@gmail.com gmtshda@gmail.com aetshda1@gmail.com

2 VISION Creation of an economically and socially sustainable tea small holdings sector MISSION Increasing productivity and quality of tea smallholdings sector through provision of excellent support services

3 Tea Small Holdings Development Authority Annual Report 2010 Chairman s Review Tea Small Holdings Development Authority took the first step towards an action plan based on a management approach oriented towards development results, parallel to the policy framework of the Ministry of Plantation Industries and state policies during the year 2010 in which we have stepped into the Decade of Prosperity. Accordingly, aiming at the long term result of improving livelihood of tea smallholders, implementing plans prepared by us consisting of strategies identified was started in year We have been able to appreciate the mission of the tea smallholders to realize expectation of the plantation sector once again in year Because, the year 2010 was the year that achieved the highest production recorded of million kilos and tea smallholders had contributed million kilos or 76.2% out of this. It was possible to continue this contribution in view of favorable weather conditions and uninterrupted receipt of the fertilizer subsidy to tea smallholders during Therefore, we can be happy about the future of the effort to achieve our long term objectives. Further, continuous receipt of national fertilizer subsidy in 2010 too to reduce production cost of tea smallholders should be appreciated on behalf of the tea smallholdings sector. Our sole objective should be continuing earning high market prices through rendering priority to quality tea production over quantitative production. For this, it should be possible to perform parallel support services at the field level as planned. Therefore, it will not be difficult to realize expected objectives by simultaneously achieving institutional as well as field expectations. Noel Padmasiri Kariyawasam Chairman

4 Performance indicators of Tea Small Holdings Sector Extent of Tea Small Holdings (Hectares) 119, , ,324 2 Number of Tea Small Holders 386, , ,645 3 Production of Tea Small Holdings (Million Kilos) Share of contribution to National Production Productivity (Kg Made Tea/Hectare) 2,138 1,900 2,168 6 Replanting extent Hectares (Under Incentive Payments) Replanting Rate Crop Rehabilitation Number of Plants (Million) Fertilizer Issue on Credit Scheme (Mt) 1, Tea Small Holder Development Societies No. of Societies No. of Members 1, ,2693 1, ,016 1, , Extension & Advisory Services Individual Visits 38,545 37,268 27,346 Group Programmes 8,668 9,170 7,154 Farmer Particpation 261, , , Operational Expenditure of the Organization (per 1 Rupee of Development Cost) Tea Inspector/Extension Officer: Small Holder Ratio 1:2625 1:2633 1: Price of a Kilo of Green Leaf Rs

5 Contents Page Executive Summary 8-10 Chapter 1 Introduction 1.1 The Organization and Functions Administrative Report 12 Chapter 2 Tea Small Holdings Sector in Sri Lanka Tea Small Holdings Land Extent of Tea Small Holdings Tea Small Holders Number of Tea Small Holdings Land Classification Production of the Tea Small Holdings Sector Production Composition Productivity Investments 22 Chapter 3 Development activities and results Medium term results based targets & achievements Main performance indicators 39 Chapter 4 Production Costs and Prices in the Small Holder Sector Labour Costs Production Cost of a Kilo of Green Leaf Production Margin and Price Tea Replanting Cost Cultivation Cost and Incentive rate (per hectare) 42 Chapter 5 Use of tea fertilizer 43 National fertilizer subsidy scheme 43 Chapter 6 Tea Development Project revolving fund loan scheme 44 Chapter 7 Regional special projects & other activities 45-47

6 Appendices No. Page (1) Approved cadre of the organization (2) Organizational Structure (3) Employment in the organization (4) Production of the Tea Smallholdings Sector ( ) 53 (5) 5 A Issue of cutting & shoots from mother bush extents 54 5 B Performance of Institutional Tea nurseries C Progress of Issue of Permits for Commercial Tea Nurseries (6) 6 A Prices at Colombo Auction based on elevation- ( ) 57 ( ) 6 B Production Cost Estimate for a kilo of Green Leaf 58 (Including subsidy) C Production Cost Estimate for a kilo of Green Leaf 59 (Excluding subsidy) 2010 (7) 7 A Estimate of Cost of Cultivation High / Mid Elevations 60 For a hectare of Tea Replanting B Estimate of Cost of Cultivation Low Elevations 61 For a hectare of Tea Replanting (8) Issue of Fertilizer to Tea Smallholders under the Credit Scheme 62 ( ) (9) Performance of Tea Replanting Subsidy Scheme ( ) 63 (10) Performance of Crop Rehabilitation (Infilling) subsidy scheme 64 ( ) (11) Human Resources Training Programmes (12) Rubber with Tea subsidy Scheme - ( ) 66 (13) Progress on Tea New Planting Subsidy Scheme - ( ) 67 (14) Tea Exports and Foreign Exchange Earnings 68 (15) Contribution by Tea to Gross Domestic Product 69

7 Page Figure No. (1) Share of Small Holdings on Total Tea Lands 15 (2) Production Share Percentages by Type of Management 18 (3) Annual / Monthly Tea Production of Tea Smallholdings Sector 19 (2008/2010) (4) Annual Tea Production trends in Tea Smallholdings Sector 19 (2000/2010) (5) Increase of Tea Replanting Subsidy 25 ( ) (6) Applications for Tea Replanting Subsidy Scheme 26 ( ) (7) Progress of Payments on Tea Replanting Subsidy 28 ( ) (8) Progress of Payments on Crop Rehabilitation Subsidy Scheme 31 ( )

8 Board of Directors 1. Chairman - Mr. Noel Padmasiri Kariyawasam Members of the Board Name Designation Oragnization Tel. No. 1. Dr.S.S.B.D.G.Jayawardena Chairman Tea Research Board Mr.A.M.P.M.B.Atapattu Deputy Director Department of Development Finance (Up to ) Mr.M.Vidanpathirana Chairman Morawakkorale Tea Factory, M.T.P.C.S.Ltd. Kotapola Mrs.Disna Dharmasekera Assistant Secretary Ministry of Plantation Industries Colombo Mr.S.T.Gunathilake Director/Chief Executive Officer Talawakele Plantations (Up to ) Mr.D.M.B.Gunasekera Hon. President Committee Member Uva Regional Organization All Island Federation of Tea Smallholder Societies Mr.K.L.Gunarathna Hon. Secretary Hon. President All Island Federation of Tea Smallholder Societies Kalutara Regional Organization

9 8. Mr.Lalith Hettiaarachchi Chairman Sri Lanka Tea Board (Up to ) Upali P.Kirindigoda Attorney at law, Notary Public, Unofficial Magistrate and Company Secretary 24/5, Pallegunnepana, Kandy (Up to ) Mr.M.F.S.W.Stembo Chief Executive Officer Tea Shakthi Fund, Madiwela Road, Thalawathugoda (From ) Mr.H.D.Hemaratne Director General Sri Lanka Tea Board, Galle Road, Colombo Mrs.Anoma Nandani Assistant Director National Budget Department (From ) Mr.Neville Ratnayake Hon. President Hon. President All Island Federation of Tea Smallholder Societies (From ) Matara Regional Organization Eleven board meetings have been held during the year under review. -2-

10 Executive Staff. Head Office: Chairman General Manager Extension Division: Deputy General Manager (Extension) : Mr. Noel Padmasiri Kariyawasam : Mr.S.D.Nandasena : Mr.K.G.B.Obeysekera Development Division: Assistant General Manager (Development) : Mr.C.J.I.T.Fernando Asst. Community Development Manager Planning & Monitoring Unit Manager (Planning & Monitoring) Assistant Data Processing Manager Finance Division: : Mr.J.M.G.Jayasinghe : Mrs.M.I.M.J.Samarawickrama : Mr.R.A.Waidyaratne Finance Manager : Mrs.D.G.P.Jayanthi Accountant : Mr.P.R.Indika Perera (From ) Assistant Accountant : Mr.B.H.C.A.Batagoda Administration Division: Assistant General Manager (Human Resources & Administration) / Secretary to the Board Assistant Project Manager : Mr.D.P.L.Kodikara (Up to ) Mr.T.H.T.de Silva (From ) Actg. : Mr.T.H.T.De Silva Senior Administrative Officer : Mr.P.A.R.R.Nonis (Up to ) Assistant General Manager (Services) Amitha Pasqual (From ) Administrative Officer Mrs.E.M.D.Amunugama (From ) (Actg) Internal Audit Division: Internal uditor A : r.k.g.narada M -3-

11 Regional Offices Regional Office (Galle) Regional Manager : Mr.W.H.Daramasiri (Up to ) Regional Manager : Mr.A.W.W.Karunaratne (From )(Actg) Assistant Regional Manager (Extension) : Mr. K.A.B.de A. Rajapakshe Administrative Officer : H.Dayananda Assistant Accountant : Mrs.U.L.M.Perera (Acting- From )(Actg) Regional Office (Matara) Regional Manager Assistant Regional Manager (Extension) Administrative Officer Assistant Accountant : Mr.G.G.Bandula : Mr.N.D.F.Abeywickrama : Mr.M.H.A.Karunarathna : Mrs.W.M.W.Pushpakumari (Acting) Regional Office (Kandy) Regional Manager Assistant Accountant Regional Planning Officer Administrative Officer : Mr.S.R.Gunawardena : Mr.A.G.Somasiri : Mr.W.H.P.S.Wijetunge : Mr.P.M.G.Bandaranayake (Actg) Regional Office (Ratnapura) Regional Manager : Mr.U.L.Ariyapala (From )(Actg) Assistant Regional Manager (Extension) : Mr.U.L.Ariyapala (Up to ) Administrative Officer : Mr.D.M.N.K.B.Thanyamwatta (Actg) Assistant Accountant : Mrs.M.A.Piyaseeli (Actg) -4-

12 Regional Office (Uva) Regional Manager : Mr.D.A.P.Premaratne (Up to ) : Mr.H.R.Arunashantha (From ) Actg. Assistant Regional Manager (Extension) : Mr.H.R.Arunashantha (Up to now from May 2010) Administrative Officer Assistant Accountant : Mr.D.M.Gunapala : Mr.W.M.Danaplala (actg) Regional Office (Nuwaraeliya) Regional Manager Assistant Regional Manager (Extension) Accountant Administrative Officer Public Relations Officer : Mr.H.Y.B.Ukuwela (Acting) : Mr.L.H.Ranjith (Acting) : Mr.A.P.N.S.Kaluaarachchi : Mr.E.Jesudasan (Acting) : Mr.A.Dissanayake Regional Office (Kegalle) Regional Manager Administrative Officer : Mr.P.A.W.Nilmalgoda (Acting) : Mr.R.M.Abeyratne Administrative Officer : Mr.P.A.R.R.Nonis (From ) Regional Office (Kalutara) Regional Manager Assistant Regional Manager Administrative Officer : Mr.M.B.Cyril : Mr.P.G.Somasiri (From )(Actg) : Mrs.M.K.K.Somasiri (From )(Actg) Ratnasiri Wickramanayake National Training Centre Manager (Training) : Mr.S.Abeysinghe -5-

13 Office Addresses:- Office Address Administrative District Head Office Regional Office (Galle) Regional Office (Matara) Regional Office (Nuwaraeliya) Regional Office (Kandy) Regional Office (Ratnapura) Regional Office (Bandarawela) Regional Office (Mathugama) Regional Office (Kegalle) Hantana Training Center No.70, Parliament Road Pelawatta, Battaramulla Telephone No. : / 21 No. 81, Lighthouse Street, Fort, Galle Telephone No : No. 31, Kalidasa Road, Matara Telephone No: No. 26, Hill Street, Gampola Telephone No : No. 2/7/1, Gannoruwa Road, Peradeniya, Kandy Telephone No : /28, New Town, Ratnapura Telephone No : New Badulla Road, Bandarawela Telephone No : Dandugodayawatta Road, Iddagoda Mathugama Telephone No : Agriculture Building Kachcheri Road, Kegalle Telephone No : th Mile Post, Middle Division Udawela, Hantana Telephone : Colombo Galle Matara / Hambantota Nuwaraeliya Kandy / Matale Kurunegala Ratnapura / Colombo Badulla / Moneragala Kalutara Kegallle Kandy -6-

14 Extension Centers :- 1. Located Region :- Kandy Administrative District Regional Extension Center Sooriyagoda, Muruthalawa Telephone No : Kandy, Matale Kurunegala Nuwaraeliya (Part) 2. Located Region :- Matara Administrative District Regional Extension Center, Morawaka, Alapaladenya Matara / Hambantota 3. Located Region :- Galle Administrative District Regional Extension Center Walahanduwa Estate, Galle Galle 4. Located Region :- Bandarawela Administrative District Regional Extension Center Bogahamaditta, Haliela Telephone No : Badulla / Nuwaraeliya 5. Located Region :- Nuwaraeliya Administrative District Regional Extension Center Tispane, Nawa Tispane Nuwaraeliya Kandy (Part) 6. Located Region :- Ratnapura Administrative District Regional Extension Center Sannasgama, Ratnapura Telephone No : Ratnapura 7. Located Region :- Kegalle Administrative District Regional Extension Center Hingula Kegalle -7-

15 Executive Summary Extent of Tea Smallholdings Total tea land extent excluding abandoned tea lands according to census of 2005 is Hectares.(Including lands below 20 perches) According to data for the last decade, an extent of about 1045 hectares is being uprooted for replanting and around 823 hectare is being replanted annually with subsidy. On the trend for past three years, 1020 hectares is being uprooted and about 894 hectares is being replanted annually. In addition to replanting under subsidy, farmers are taking action to replanting without subsidy and also new planting annually. Also, attractive market prices for tea, orientation towards alternate crops and intercropping in tea is taking place and this trend could be observed fluctuating annually, depending on favourable and unfavourable results over time. Based on information gathered by Tea Inspector / Extension Officer range level under the Cost Estimate Survey in 2010, 1535 farmers have entered tea cultivation whilst extent added was 315 hectares. Based on the analysis, highest extent entering through tea new planting is from Galle District and this extent is the extent that had come into tea by removing uneconomical other crops. Thus, total estimated extent of tea smallholdings by the end of 2009 is 120,324 hectares. Production of the Tea Small Holdings Sector and Contribution to National Production It had been possible to increase the production of the tea small holdings sector from 183 to million kilos during the lapsed decade. Contribution to national production also had grown from 60% to 76%. However, in comparison to 2009, production of tea smallholdings had increased by million Kg or 14%. Since we had to face international market crises, year 2009 is not much suitable for assessing trends in the tea smallholdings sector, thus assessing in relation to year 2008 is more realistic. Productivity in the Tea Smallholdings Sector In view of the favourable weather conditions and existence of satisfactory levels of fertilizer use under the national fertilizer subsidy scheme, average annual productivity of tea smallholdings sector had increased to 2168 Kg made tea per hectare. Also, though low country and mid country production of the tea smallholdings sector had grown in comparison to year 2008 which is more appropriate for comparison, up country production in year 2010 had declined. Further, though the average productivity of the low country almost always was reported above the average productivity level of the tea smallholdings sector, it is revealed that low country productivity being 2105 kilos in 2010, it is below average productivity level of 2168 similar to This further clarifies the necessity of replanting the tea cultivation established in the decade of 1980 at a higher intensity. -8-

16 Extent of Tea Replanting and Replanting Rate In conformity to national policy, 2% of the existing tea extent has to be annually replanted in order to maintain the tea extent obtaining the maximum yield. Mature tea extent in the tea smallholdings sector by 2010 as per the census data is 116,492 hectares. Also, 21,613 hectares are lands which have already exceeded 25 years. There is a necessity of directing these lands to replanting expeditiously. In view of budgetary physical targets in previous years being reduced based on financial provisions, 847 hectares were replanted in 2010, thus the tea replanting rate had declined to a low value of 0.73%. However 2200 hectares need to be replanted annually according to the national requirement. Crop Rehabilitation Incentives are paid on this cultivation scheme based on pruning as recommended, establishment of soil conservation measures, management of shade along with supplying plants in vacancies in an integrated manner. Though the progress in applications had increased by 11% in comparison to the last year, progress on issue of permits had decreased by 22% as against last year. The number of plants established is million plants. This is a decline of about 2% in comparison to However, this had become a scheme which is not popular among the tea smallholders due to reasons such as inadequacy of subsidy amount received, inaction by the smallholders for crop rehabilitation within the pruning cycle as expected and low enthusiasm by smallholders on long term agricultural activities such as crop rehabilitation. Extension and Advisory Services Under extension and advisory services, 7154 group programmes have been conducted in 2009 by all regional and extension offices. Farmer participation in these programmes was 210,334. This is a progress of 63% against 11,394 targeted. Similarly, farmer participation too was a progress of 87% against the target of 242, soil samples had been checked in 2010 to test soil acidity in tea smallholdings. Tea Small Holder Development Societies The Small Holder Development societies initiated in the year 1989 is a society system which had been legislated societies had been registered by the year 2010 under this society system which consists of 8 regional organizations and an all island federation. A 1.4% growth in the number of societies and a growth in the membership could be observed in 2010 in comparison to year Implementation of national fertilizer subsidy scheme through societies is a strong reason for the development in the society system and society system established by the organization was an easy avenue to implement this programme. All smallholder development societies, regional organizations and all island federation were reorganized during year

17 Operational Costs of the Organization Development cost of the organization in 2010 is Rs million. Operational cost is Rs million. In comparison to year 2009, development cost had increased by Rs.3.53 million according to financial provisions. Operational cost had increased by Rs million. Accordingly, ratio between operational cost and development cost was In comparison to last year, operational cost had not changed. Administrative cost of Rs.76.14million and extension and advisory cost of Rs million is included in the recurrent cost of Rs million. Tea Small Holder to Tea Inspector/Extension Officer Ratio Though the extension officer to farmer ratio should be 1:1000 for an effective extension service, this ratio in the small holdings sector is 1:2643. Accordingly, though it is necessary to increase the number of officers to improve the ratio, it is not possible to do so in view of the cost and funding limitations of the organization and obtaining the assistance of support services such as of Smallholder Development Societies instead is done by the organization. However, to further improve the productivity of tea lands, it is necessary to increase the intensity of agricultural extension activities. Prices of Green Leaf The average prices of green leaf received by tea smallholder by the year end stood at Rs for up country, Rs for mid country and Rs for low country in view of tea market of Sri Lanka reaching a favourable status in The all elevation average was Rs Thus, smallholder production margin had reached a positive value in view of receiving price levels exceeding production cost of a kilo of green leaf. -10-

18 Tea Small Holdings Development Authority Annual Report Introduction 1.1. Organization and Functions Tea Small Holdings Development Authority was established on 1 st February 1977, under the Tea Small Holdings Development Act No. 35 of Act No. 36 of 1991 to legally establish and register the Tea Small Holder Societies, Act No. 21 0f 1997 to establish legal status of societies have been legislated. Also, Act No.34 of 2003 had been legislated adding revisions to original act to increase the composition of the board of directors. Objectives: Development of tea small holdings, increase of production, marketing activities, improvement of productivity and working for the welfare of the tea small holders are the objectives of the organization. Tea lands under 10 acres are considered Tea Small Holdings as per the Tea Control Act. Even though, the organization performs support services relevant to develop all private owned tea lands up to 50 acres under the provisions of the Land Reform Act too, treating them as tea small holdings. Functions of the Authority 1. to promote or to undertake development of tea small holdings or other holdings which do not possess their own means of manufacture; 2. to acquire or to develop tea factories and other facilities required for the manufacture of produce of such tea lands; 3. to promote or to undertake marketing of the produce of such factories or of such tea lands; 4. to take all such steps as may be necessary to provide, or to facilitate or to procure, or to facilitate the provision of or procuring of such facilities and services as may be necessary for the development of such tea lands and for the well being of those who are engaged in the production or the processing of the produce of such lands. In addition, Authority continued to carry out the under noted other functions as well as functions delegated periodically by the Sri Lanka Tea Board, since 1 st January

19 1. Implementation of following incentive schemes for the development of lands under private management. i. Tea Replanting ii Tea New Planting iii Infilling iv Cultivation of Rubber with tea v Cultivation of Coconut with tea 2. Provision of support services such as distribution of fertilizer, planting material, implements and transport facilities. 3. Implementation of extension and advisory services. 4. Implementation of price supervision activities of tea factories processing leaf of tea small holders. 5. Establishment of society leaf collecting centers. Registration of Tea Small Holder Development Societies and establishing regulations of their functions with the intention of expanding support services of the Authority Administrative Activities Organization Structure and Scheme of Recruitment A cadre of 420 was approved by the Management Services Department by its letter No.DMS/E4/08/05/070/2 dated 29/07/2010 as per the staff restructuring proposals approved by that department by its letter No. DMS/E4/08/05/070/2 dated 22/04/2010 for the new organizational structure and scheme of recruitment prepared and submitted by the Authority. Cadre thus approved, approved organizational structure and staff in service by the end of year 2010 are indicated by schedule No.1, Schedule No.2 and schedule No.3 respectively. Scheme of recruitment for thus approved organizational structure was prepared and submitted to the Salaries and Cadre Commission and on advice subsequent to several discussions scheme of recruitment was prepared as advised and submitted for the approval of the Department of Management Services through the Secretary of the Ministry of Plantation Industries, with the necessary copy. -12-

20 Appointments made during the year Following appointments were made during the year after calling for applications as advised by the Ministry of Plantation Industries and approval of the Department of Management Services to fill the vacancies of the Authority. Position Grade Number Assistant General Manager (Services) M-III 01 Accountant E-1 01 Driver PL Results Based Management Approach The organization decided that it is more appropriate to implement the action plan for year 2010 in the corporate plan used to achieve statutory objectives of the organization on management of development results approach. Thus, a concept paper dated 21/08/2008 was submitted to the board of directors and subsequent to approval by the board, workshops for introducing new approach were concluded in years Objectives, targets, strategies, work plan and preparation of monitoring indicators were completed through these workshops and approval of the board of directors was obtained in year Subsequently, all field and office staff was made aware for planning and the first plan under the new approach was implemented in The long term and medium term development results decided in the new approach by the organization were as follows. The annual plan for 2010 was prepared accordingly based on the short term results thus identified. -13-

21 Development Results Long Term Impact Enhancement of living standards of tea small holders. Medium Term Results 1. Increase the yield to Kg made tea / hectare / annum in 06 years to 2700 in low country 1700 in mid country 1500 in Uva 2. Improve leaf standard to 75% at factory level in 5 years. 3. Strengthen 50% of the community based organizations within 06 years 4. Strengthen the organization to function more effectively within a year 5. Direct 10% of the lands towards additional income earning activities within 05 years Policy Decisions (i) It was decided to increase the incentive payment to motivate farmers for replanting in view of the incentive payment granted for replanting being reduced to 12% of the total cost that should be borne for replanting which had increased due to increase of input prices. Accordingly, it was decided to increase the subsidy rate by Rs.50,000/= per hectare as follows from It was decided to increase the subsidy rate for low country which was Rs,190,000/= per hectare to Rs. 240,000/=, and for Up/Mid country which was Rs.200,000/= per hectare to Rs.250,000/=. (ii) It was decided to grant subsidy for tea new planting for a limited land extent in districts which do not have alternate cops and income sources. (iii) Though crop rehabilitation (infilling) is essential for increasing unit productivity, the subsidy rate so far paid was not sufficient on cost situation. Therefore, it was decided to increase the subsidy rate of Rs.10/= per plant to Rs.25/= from (iv) It was decided to reduce the minimum extent for which a permit is issued for replanting incentive scheme from 20 perches to 10 perches to motivate tea smallholders who own minimal tea land extents. (v) It was decided to allow tea replanting without rehabilitation on lands which have been certified for suitability. -14-

22 2.1. Tea Small Holdings 2. Tea Small Holdings Sector in Sri Lanka All tea lands up to 50 acres in extent under private ownership are considered as tea small holdings. The term tea small holding is used in this wide context in this report Land Extent of Tea Small Holdings With the extent of tea small holdings of 132,329 Hectares (including extents under 20 perches), as per the Census of Tea Small Holdings in 2005, total tea extent in Sri Lanka will approximately be 221,968 Hectares. Thus, 59% of the total tea extent in Sri Lanka belongs to the tea smallholdings sector. When compared with details of census of small holdings in 1994/95, tea extent in Sri Lanka had increased from 82,919 to 116,492 Hectares (only lands above 20 perches), i.e. 40% within a decade. Out of the total extent of tea small holdings of 132,329 Hectares (including lands below 20 perches in extent), 7,310 hectares out of this is abandoned tea lands. Out of the balance extent, 118,275 Hectares is mature and immature tea. Total mature and immature tea extent excluding lands under 20 perches is 116,492 hectares. An extent of 315 Ha had been newly added in 2010 to the tea extent as per the TI/EO range baseline survey Thus, total estimated tea extent is 120,324 Ha. Figure No. 1 Contribution of Tea Small Holdings to the Total Tea Extent ** Census Report of Tea Lands in Sri Lanka 1994/ 1995, Sri Lanka Tea Board *** Agricultural Census of Sri Lanka 2002, Department of Census and Statistics -15-

23 2.3. Tea Small Holders The number of small holders engaged in cultivation of tea by the year 2005 is 370,842 (including cultivators of less than 20 perches). 82% out of this are smallholders with single ownership and they own about 76% of the land extent. According to TI/EO range baseline data estimates, 971 farmers have newly entered tea cultivation in Number of Small Holdings The total number of tea small holdings had increased from 206,652 to 350,982 (lands above 20 perches), i.e. 70% within a decade. Out of the number of tea smallholdings in Sri Lanka, 11.6% is less than 20 perches in extent and these cover 1.5% 0f the total tea area. 75% of tea small holdings are lands less than 1 acre in extent whilst 95% belongs to the category of less than 2 acres. Percentage of lands above 10 acres is very small at 0.78%. The number of parcels and distribution of extent according to the census is as follows. Table No. 1 Number of Tea Lands According to District in Sri Lanka 2005 No. of No of Lands/As per extent Ha District Small Hectares <1/2 Less Holdings than 1/2 - < < < < < 10 >10 Colombo Gampaha Kalutara 38,263 7,823 35,793 1, Kandy 30,747 16,058 25,457 3,345 1, Matale 1,408 1,672 1, Nuwaraeliya 17,547 7,205 15,270 1, Galle 90,524 27,427 79,432 8,296 1, Matara 67,613 25,417 58,470 6,835 1, Hambantota 2, , Kurunegala Badulla 29,679 9,020 26,989 1, Moneragala Ratnapura 97,984 30,441 87,070 7,910 1, Kegalle 19,637 6,093 17,333 1, Total 397, , ,292 33,840 7,918 2,286 1, Percentage * Source Census of Tea Lands in Sri Lanka Price escalation of green leaf, increase of incentive payments for tea cultivation, fragmentation of large holdings and cultivation of lands without alternate crops with tea have specially influenced the growth of lands in the tea small holdings sector. -16-

24 2.5. Land Classification *Out of total extent of tea small holdings, 113,190 acres (34.6%) are lands less than one acre in extent whilst 198,707 acres (60.8%) are lands less than two acres in extent. Extent more than ten acres is 59,731 acres (18.3%) Table No. 2 Extent of Tea Small Holdings in Sri Lanka and Classification According to Number of Parcels Acres Less than Less than Less than Less than Less than and Above Land Extent Acres % No. of Parcels 113, ,342 85, ,314 31, ,101 18, ,299 18, ,936 59, , , ,223 Percentage % Source : Census of tea lands in Sri Lanka Production in Tea Small Holdings Sector Tea small holding sector is leading the national tea production in Sri Lanka from year Tea smallholding sector which held a 50% share of national tea production in 1991 had been able to increase the production capacity to a share of 76.2% by the year (Schedule No. 04) The highest national annual tea production is recorded in year It is million kilos. The national tea production in 2009 was million kg and production in 2010 had increased by million kilos or by 13.8% in comparison to that year. Production in the tea smallholdings sector too had grown to million kg and percentage of contribution by the tea smallholdings sector to the national production had grown from 76.03% to 76.2%. (Table No.03) -17-

25 Management Institutions Table No 3 Total Tea Production in Sri Lanka 2009 / 2010 Contribution According to Type of Management Tea Production (Metric Tons) 2009 % 2010 % 01 Tea Small Holdings Sector 221, , Regional Plantation Companies 65, , Janatha Estates Development Board 2, , State Plantations Corporation 04 **Other Total 291, ,426 Source:- Sri Lanka Tea Board ** Tea Shakthi, Tea Small Holders Factories Ltd., Sri Lanka Tea Research Institute, Cooperative (All bought leaf had been included in the production in the small holdings sector according to classification of institutions. Private sector had been considered as small holdings sector in this) Figure 02 Percentage Production Share of Management Institutions - Year 2010 Favourable weather conditions throughout the year except for the months of February and March and high level of fertilizer use under the national fertilizer subsidy scheme had influenced the increase in national annual tea production in the tea smallholdings sector. Tea smallholdings sector had achieved a considerable growth in the year Since the year 2009 was not a year suitable for comparisons on production trends, in comparison to year 2008 where a record production was achieved a 7% growth is observed with regard to production in tea smallholdings sector. -18-

26 Figure 03 Tea Production in the Tea Smallholdings Sector (Annualy/Monthly) -Million Kg 2008 / 2010 Source :- Sri Lanka Tea Board Figure 04 Annual Production Trend of Tea Smallholdings Sector From (Million Kg) Source: Sri Lanka Tea Board 2.7. Production Composition of Tea Small Holdings 96% of the low country production, 69% of the mid country total production and 33% of the up country total production out of national production for 2010 comprised of production by the tea smallholdings sector (Refer table 04). Also, 74% out of production in the private sector belonged to the low country production. Since 2009 was not a suitable year for comparison, in comparison to year 2008, production of smallholder sector in 2010 in the up country had declined by 7%. Production in Mid and Low country had increased by 20.5% and 6.8% respectively. -19-

27 Table No 04 Physical and Production Contribution of Tea Small Holdings Sector Elevation Based 2009 / 2010 Elevation Up Country Mid Country Low Country Physical Contribution National Production Total Small Holdings & Contribution Percentage 5,913 5% 21,403 18% 89,176 77% Year (Mt) Production & Contribution % Total 116, ,129 24% 72, % 56,130 17% 44, % 196,167 59% 173, % 331, ,131 Contribution to Production by Elevation 25,927 10% 25,997 12% 38,888 15% 30,528 14% 187,739 75% 164,839 74% 252, ,364 % Contribution to Total Tea Production 7.82% 8.93% 11.73% 10.48% 56.65% 56.62% 76.20% 76.04% Sources i. Census Report on Tea Lands 2005 Department of Census & Statistics ii. Monthly Statistical Summary Sri Lanka Tea Board 2008 Productivity Kg Made tea/ Hectare/Annum ,168 1,

28 2.8. Productivity in the Tea Small Holdings Sector The main contributory factor for the increase in national tea production in the decade up to 2010 was the growth of production and productivity. Increase in tea small holdings extent, the high level of 88% of V.P.teas, good management of most lands on high market prices, ability to obtain fertilizer at low prices on national fertilizer subsidy and existence of favourable weather conditions have influenced the production increase in the tea small holdings sector. According to production data of the Sri Lanka Tea Board, productivity of the tea small holdings sector in 2009 is 1895 made tea Kilos per hectare. Productivity in 2009 had declined by about 11% due to unexpected decline in total tea production from 2138 kilograms of made tea per hectare in Table No.05 Productivity in the Smallholdings Sector 2010 (Made Tea / Kilos) On Administrative Districts Basis Administrative Tea High Mid Low Elevation Total Productivity District Smallholdings levation Elevation (Made tea Extent (Ha) per Ha) Badulla *2495 Galle Hambantota Kalutara Kandy Kegalle Matale *4185 Matara N Eliya *3776 Ratnapura Total ** Based on extent on 2005 census Estimated Average Productivity / Ha Source Sri Lanka Tea Board * Data not being realistic in view of leaf being purchased beyond administrative district basis ** Mature tea extent -21-

29 2.9. Investments in tea Small Holdings Sector Annual investment amounts in the tea smallholdings sector is shown in table No. 06. An amount of Rs million had been allocated from the consolidated fund which consisted of Rs million as development and institutional capital and Rs million as recurrent cost in the year A total amount of Rs was received by the organization for the year which comprised of Rs million of development and institutional capita and recurrent cost of Rs.208 million. The major part of this money had been invested on replanting. Development of infrastructure facilities of the organization had not been possible in view of the limitation of funds received for capital expenditure. Table No. 06 Tea Production in the Private Sector and Cess Funds Provided Total Production Cess Provided Year Total Tea Production (Mil Kg) Private Sector Share % Other Sectors Amount of Cess to the Private Sector (Smallholdings Sector (Rs.Mil) $ of funds provided / /43.28 * (Actual amount received was - Rs Mil) Source: Sri Lanka Tea Board Allocations have been provided by the Treasury Fund from

30 Operational Review Recurrent cost of Rs million included Rs million of administrative cost and Rs million of extension nd advisory cost. Even though, a risk of operational costs increasing in the long run could be observed in view of provisions for institutional capital, maintenance of resources and human resource development being limited. Table No. 7 Operational Review (From 1995 to 2010) Year Development Cost Rs. 000 Operational Cost Rs. 000 Operational Cost per Rupee of Development Cost ** * *** * ** Operational Cost had been calculated including project cost up to year Operational cost had been calculated on accrual basis. -23-

31 3. Development Activities and Results In the new approach of results based management, the long term impact / result under the expected functions of the organization from 2010 is improvement of livelihood of tea smallholders. Accordingly, implementation of the new objectives, targets, strategies and action plan was started in year Expected medium term development results by the organization are as follows. 01. Increase productivity in 06 years to Made tea/hectare/annum Low Country 2700 Mid Country 1700 Uva Improving leaf quality to 75% at the factory level in 5 years 03. Strengthening 50% of the community based organizations in 06 years 04. Strengthen the organization within one year to function more effectively 05. Directing 10& of the lands towards additional income earning activities within 05 years. Action Plan and Practical Difficulties The expected provision to implement institutional strategies in the annual plan for year 2010 to achieve expected development results under the new approach is Rs 288 million. Even though the provision received by the organization for development activities is Rs million. Therefore many activities expected under the action plan had to be implemented under various constraints. For instance, extents under uprooting from 1382 Ha to 900 Ha, soil rehabilitation 1 from 1304 ha to 770 ha, soil rehabilitation 2 from 1064 ha to 750 ha and tea replanting from 1013 ha to 760 were reduced. Accordingly, the organization had to implement the services planned parallel to the development targets under limitations. The organization established performance based indicators to measure whether it is reaching the expected targets whilst achieving development results. Accordingly, to obtain baseline data to measure effectiveness of activities based on indicators, a socio-economic survey was planned. However, this survey could not be conducted in 2010 due limitation of funds. -24-

32 Results Based Medium Term Targets and Achievements 3.1 Medium Term Results 01 Increasing productivity in 06 years to 2700 Kg in low country, 1700 Kg in mid country and 1500 Kg in Uva, made tea/ha/annum Maintaining tea replanting rate at 2% annually. It is expected to motivate cultivation of approved vegetative propagate tea in low yielding old seedling tea fields to increase productivity an production of tea smallholdings under this incentive. Incentives were paid in following installments for a maximum extent of 1 Ha, at the rate of Rs. 200,000/- per Ha in High/Mid elevations and Rs.190,000/- in the low elevation. Since it was not sufficient to cover only 12% of the total cultivation cost under cost conditions of replanting,, a policy decision was taken to increase the relevant incentive amount. Figure Mo. 05 Increase of Subsidy for Replanting From 1979 Appli catio n for Replanting Though it was targeted to obtain applications from farmers for replanting under results based management approach, only 8634 farmers had applied for replanting. The extent expected to be uprooted under this was 2561 Ha. Out of this, 781 farmers were issued with permits in the year 2010 and the extent targeted to be replanted through this was 1895 Ha. -25-

33 Figure No 06 Applications for Cultivation Subsidies Applying for replanting subsidy scheme had declined by 2% (Table No. 06) in comparison to previous year. High cost of replanting, non tendency for uprooting in view of favourable prices received for green leaf during the year and reluctance of farmers for the necessity of long period of 18 months of soil rehabilitation are the reasons for this. When considering the field activity stages of replanting, uprooting, soil rehabilitation first stage, second stage and tea replanting had increased by 113%, 135%, 1285 and 111% respectively in comparison to the previous year. The reason for exceeding the targets is the necessity of revising physical targets in view of the necessity of revising the budgetary estimates on the advice of the treasury. The institution had paid Rs million during the year for tea replanting. This is a decline of 0.17% in comparison to the previous year. But, financial progress was 116% based on annual provisions since it was necessary to make payments for physical activities completed due to revision of budgetary provision several times. Under the package of providing input material to permit holders to prepare nurseries under the basis of deducting from the subsidy for replanting, plants, shoots of new cultivars, 1.46 million polythene bags, 4042 Kilos of T-65 (Nursery Fertilizer), 225 Tea Cultivation Handbooks, 3313 Kilos of Bazamid, Mt of T-200 fertilizer, Mt of U-625 fertilizer, 1675 Kilos of Dolomite, 68 Kilos of Zinc Sulphate and 1582 Grevillia plants were issued. The total value of input material provided was Rs.5.69 million. -26-

34 Table No 08 Tea Replanting Subsidy Scheme Physical Progress in Year 2009/2010 Low Elevation High/Mid Elevation Activity Year Galle Kalutara Matara Ratnapura Kegalle Kandy Nuwaraeliya Uva 1. Applications Received No. of Permits Issued Extent Covered by the permits 4. Land Preparation Soil Rehabilitation Tea Replanting Amount of Subsidy Paid (Rs. Million) Source: TSHDA Monthly Progress Reports *Total amount paid in 2009 including interest subsidy of Rs million is Rs million Total Annual Target Percentage increase / Decrease in comparison to previous year (2) (13) 20 (6) (18) (3) 9 9 (12) (0.17) (8) -27-

35 Figure No. 07 Annual Progress of Tea Replanting Subsidy Payments Çæ.¼.È. Rs.Mil % 25% % 43% 51% 28% 35% 36% 37% 24% 27% 28% 27% Year ÉÚËÆ Amount ïªéì Äê¼È Paid % ÈæÂì Subsidy ïììà Paid ÇÄê¼È on Cess Ì;å½åÇ Received ïªñš Àòºø漮 * Percentage cannot be indicated in view of revision of cess amount. -28-

36 3.2.1 Crop Rehabilitation Subsidy Scheme Incentive payments are made under the crop rehabilitation subsidy scheme with the objective of increasing unit productivity in v.p tea lands in plucking for infilling whilst practicing pruning, soil conservation methods (Rehabilitation of drain systems/stone terraces) management of shade and practicing other cultural practices in an integrated manner. Lands on which tea cultivation could be maintained successfully for another 10 years are recommended for this subsidy scheme and land being in the stage suitable fr second pruning or age of tea cultivation exceeding 07 years are eligible criteria for subsidy. Under this subsidy scheme incentives are paid in two installments at the rate of Rs.10/- per plant, on the condition that tea cultivation is rehabilitated by infilling in blocks, subject to a maximum of 1,000 plants per acre in up/mid country and 750 plants per acre in low country. It was decided as a policy to increase the subsidy to Rs.25/- per plant since amount so far paid per plant was inadequate in view of increases in cost. Though applying for subsidy had increased by 11% in comparison to year 2009, issue of permits had declined by 22%. Similarly annual target also had decreased by 23% in relation to previous year. Annual targets had to be reduced in view of revision of budgetary estimates and annual progress of number of plants obtaining first installment had declined by 2% in comparison to previous year based on the number of plants targeted (Table No. 09). Number of plants qualifying for the second installment is 59% out of the number of plants receiving first installment in year Financial progress of providing subsidy is Rs million. This is a 72% progress on allocated funds. -29-

37 Figure No 08 Crop Rehabilitation Subsidy Scheme Progress of Payments ( ) * Percentage cannot be indicated due to revision of cess amount. -30-

38 Activity Year 1.No. of Applications Received No. of Permits Issued Number of plants targeted Number of plants 1 st installment paid Number of plants 2 nd installment paid Amount of subsidy Paid (Rs.Million) Source: TSHDA Progress Reports Table No 09 Crop Rehabilitation Subsidy Scheme Physical Performance of Year (Hectares) Low Elevations High/Mid Elevations Galle Kalutara Matara Ratnapura Kegalle Kandy N eliya Uva Total Annual Target Comparison with Previous Year (%) 11 (7) (22) 13 (23) 19 (1.7) (17) 9.6 (42) 10 (31) -31-

39 Supply of Quality Tea Plants Maintenance of Mother Bush Cultivations of New Improved Tea Cultivars Provision of quality planting material to tea smallholders to improve tea production and productivity is another important strategy of the organization. Thus, the organization maintained mother bush extents with quality new improved cultivars and took steps to provide shoots to tea smallholders, commercial tea nursery operators and also institutional tea nurseries. Details of issues of shoots of new improved cultivars from mother bush sites are indicated in Annexure 5 A. Commercial Tea Nurseries It is very important to maintain commercial tea nurseries with quality as nurseries registered with the organization to facilitate availability of quality plants to tea smallholders with the objective of increasing tea production and productivity. Accordingly, 651 commercial tea nurseries were registered by all regional offices as follows and plant capacity of these nurseries was 24.3 million plants. Table No 10 Issue of Permits for Commercial Tea Nurseries and Plant Capacity ( ) Area No. of Permits Issued Plant Capacity (Millions) Matara Ratnapura Kegalle Kandy Galle Nuwaraeliya Uva Kalutara Total

40 Institutional Tea Nurseries Institutional tea nurseries are maintained with the objectives of producing plants of good quality and controlling market prices when tea small holders buy plants. Thus, plants were produced by the 06 nurseries maintained in the year Total number of plants sold was Sale price of a plant by nursery is indicated on schedule No. 5-B Extension and Advisory Training Programmes To provide extension and advisory services to increase production and productivity, 5505 planned extension programmes were conducted in year 2010 and farmers have participated in these as follows. In addition, the service of checking soil acidity (Soil ph) also was provided to farmers. Table 11 No, of Training Programmes (1) and Participation (2) Regional Programmes Total Individ Soil Office Awareness Training Training Training Training Training Pruning Training Training ual Checkin for permit for Input of on Tea on on Skills on Soil on Shade Extensi g Holders Nurseries Commerc Planting Plucking Pruning Training Managem Establish on ial ent ment & Visits Nursery Owners Manage ment Galle Matara Kalutara Kegalle Kandy N Eliya R pura Uva Total Target

41 Medium Term Result 02 Increasing leaf quality to 75% at factory level in 5 years Minimal cost of production and high market prices are prime factors along with high productivity if income levels of smallholders are to be increased. Though it had been possible to cost of production by the ability to procuring fertilizer at low prices through the national fertilizer subsidy scheme, to obtain high prices for green leaf, production of quality green leaf should improve. To improve the leaf quality under the new management approach, it was expected to improve the use of shears and baskets, training of pluckers, promote legal provision making acceptance of only good quality leaf by factories compulsory, conducting awareness programmes for leaf suppliers, conducting factory based extension programmes and making smallholders aware of leaf quality were the programmes envisaged to achieve this result. Accordingly, progress of programmes conducted in year 2010 is as follows. Table 12 Improvement of Leaf Quality Regional Office Programmes 1 No of Programmes Training on use of Training of Awareness Training on Leaf 2 Participation shear & basket Pluckers programmes for Quality Leaf Suppliers Galle Matara Kalutara Kegalle Kandy Nuwaraeliya Ratnapura Uva Total Target In this, to measure whether expected results are being achieved, percentage of good leaf and rejected leaf are being used as two main indicators. Achieving the expected results had become a joint effort by the Authority, Sri Lanka Tea Board, Tea Commissioner s Division and Sri Lanka Tea Research Institute. -34-

42 Medium Term Results - 03 Strengthening 50% of the Community Based Organizations within 06 years Tea Small Holder Development Societies To make Tea Small Holder Development Society system which was started in latter part of 1989 legal organizations, regulations on tea small holding development societies were declared by gazette extraordinary No 878 /15. This was done under the powers vested by the (O O) paragraph of the 2 nd sub clause of the 15 th clause in the act No. 35 of 1975, revised by act No. 36 of 1991 of the National State Assembly. Tea small Holder Development Regional Organizations and All Island Federation of Societies were reorganized during year societies were under registration by the end of 2010 and the details of registered societies and membership are as follows. Table No. 13 Distribution of Tea Small Holder Development Societies 2009/2010 No. of Societies No. of Members Regional Area Ratnapura Uva (Badulla & Moneragala) Nuwaraeliya Kandy & Matale Galle Matara & Hambantota Kegalle Kalutara Total 1,309 1, ,502 Source: TSHDA Progress Reports In comparison to year 2009, an increase of number of societies by 20 or 1.4% and membership by 7.4% can be observed n year Rs million was spent in year 2010 for society development activities. Making suitable legislative changes with regard to activities of tea small holder development societies, effectively improving functioning of 400 societies every three years, changing attitudes of society office bearers, establishing an effective monitoring scheme for societies and establish and implement a revolving fund to develop entrepreneurship in tea small holder development societies were planned to strengthen community based organizations under this. Though it was expected to obtain main performance based indicators and affiliated results through the socio-economic survey due to be implemented in 2010, the survey was not conducted due to revision of budgetary provisions. -35-

43 Medium Term Result 04 Strengthening of organization within one year to function more effectively Expected short term results 4.1 Maintaining cadre vacancies below 5% within one year 4.2 Decentralizing institutional activities to the maximum extent possible within one year 4.3 Making approved organizational structure operational by the inception of year Establishing the Wide Area Network (WAN) within 2 years to link all units of the organization. 4.5 Integration of organizational data base with the national information system within 2 years. 4.6 All audit opinions being unqualified within 02 years 4.7 Introducing and institutionalizing a proper planning process at the beginning of the year 4.8 Improving and introducing monitoring system within 06 months 4.9 Financial, administrative and disciplinary manuals/processes are ready within one year % of the institutional activities are automated and integrated every year % of the staff use computers for work within 02 years 4.12 An accepted staff appraisal scheme is in operation by year Positive attitudes exist in organizational staff for official work 4.14 A performance based evaluation scheme is available and operational by Providing professional training for 5% of the staff annually 4.16 Staff possess required knowledge and skills to perform relevant duties 4.17 Required infrastructure facilities are available within 2 years Physical and financial progress, percentage of deviation from budget and number of audit deficiencies have been identified as main performance indicators by the organization under his. Staff Vacancies Though it was necessary to maintain staff vacancies below 5%, the organization was unable to fill vacancies due to non approval of scheme of recruitment in 2010 due to revisions. Even though organizational structure was approved in the year 2010, scheme of recruitment was under preparation. Information system and Institutional Data Establishment of a Wide Area Network had been identified to link all units of the organization within two years. Accordingly, main server was affixed in the head office and linking with data bas at the head office was completed. Budgetary estimates for linking head office and regional offices through Virtual Private Network was prepared and submitted., -36-

44 Work on development of web site with e-services to link the institutional data base with the national information system is about 90% complete and it is expected to be made operational in the year Under the automation and integration of institutional activities, relevant field had been identified and the use of packages for this was about 25% completed. Assessment of abilities on use of computers for office work by the staff was completed. Planning and Monitoring Activities The formal planning and monitoring process under the development results based management approach was introduced. Information obtained through the census of tea small holdings was so far used for various institutional activities. However it was necessary to again identify some baseline indicator data which are used to measure effectiveness of some activities leading to results and which should be used for preparation of action plans for the future years. Since the socio-economic sample survey which was planned to be conducted in the year 2010 to collect baseline data could not be conducted due to lack of funds, the board of directors advised to conduct it in the next year. However, a programme to register tea smallholdings was conducted in 2010 in Kotapola divisional secretariat division of Matara district as a pilot project to initiate a programme to register tea smallholdings, in view of implementing state projects such as national fertilizer subsidy and the necessity of updating the changes in the sector. It was revealed that there was no disparity in relation to information in the census of tea lands in Staff Appraisal Under the staff appraisal scheme, implementation methodology for performance based evaluation scheme for the field staff was completed within the relevant year. Accordingly, this scheme is due to be used evaluation in 2010 and 2011 onwards. Staff Training Under human resource training programme, staff was participated for external programmes such as Problem Resolution at Sri Lanka Foundation Institute, Institutional Language Training (Tamil Medium) by Official Languages Department, Computer Systems Control Training by Sri Lanka Communication and Technology Agency. Training programmes on Preparation of Training Objective, Training Session Planning and Presentation under results based management, Leadership/ Group Behaviour and Communication Training were conducted at Hantana National Training Centre by the organization. (Schedule No. 11) -37-

45 Medium Term Result 05 Directing 10% of the lands to additional income earning activities within 05 years Directing towards additional income earning activities had been identified for improving livelihood of tea small holders. Thus introducing tea based farm management to 1000 smallholdings annually and establishing forestry in 1000 tea smallholdings are short term results identified under this. The following programmes have been implemented under this. Table 13 Training Programmes Regional Office 1.No.Of Programmes 2.Participation Training on Tea Based Farm Management Training on Establishments of Forestry Galle Matara Kalutara Kegalle Kandy Nuwaraeliya Ratnapura Uva Total Target Percentage of other crops and percentage of livestock management on tea smallholdings had been identified as main performance based indicators and these details were to be identified through socio-economic survey to be conducted in

46 Management for Development Results Major Performance Based Indicators Medium Term Results Major Performance Based indicators Long Term Result I. % of increase of household income Improvement of Livelihood of Tea Smallholders II. % of secondary education in children Provision Financial Progress Base Year Data NA Perforamance Based Indicators Target & Progress 2010 Target Progress 2 1 Increasing Made Tea/Hectare/Annum 1.1. Increase in unit productivity at district level and in 06 years Elevational category level Up to 2700 in Low Country Up to 1700 in Mid Country Up to 1500 I Uva Production increase in Tea Smallholdings (Million Kilos) Sub Total Improving leaf quality by 75% at Factory leve 2.1.Percentage good leaf at factory level % 40% 33% in 05 years 2.2. Refuse tea percentage at factory level **15% 12% N.A Sub Total Strenghthening 50% of the community organizations in 06 years 3.1. Increase in assests value No. of Activities conducted by societies at all levels N.A 3.3. Opinion of membership on effectiveness Sub Total Strengthening the organization to function more effectively within one year 4.1. Percntage of achieving targets Tea Replanting Subsidy Scheme a. Financial 102% 100% 116% b. Physical 92% 98% 111% True and True and * 4.2. No. of Audit Deficencies Fair Fair 4.3. Percentage Deviation from Budget 13% 0% 5.8% N.A 4.4. Opinon of staff on effectiveness of the organization N.A Sub Total Directing 10% of the lands towards additional income earning activities within 05 years 5.1. Percentage of lands with other crops 5.2. Percentage of lands with livestock Sub Total Grand Total % 35% N.A Special Notes :- N.A. - Since Base data is not available it was planned to obtain data through Socio-Economic Survey Based on data of Sri Lanka Tea Borad ** Based on Tea Research Institute recommendations, standard is 3% **** Provisions exceeded * Auditor General's report is due to be received *** Due to budget revisions -39-

47 4. Production Cost and Green Leaf Price in the Tea Small Holdings Sector 4.1 Cost of Labour According to information gathered at field level annually regarding conditions in the tea smallholdings sector, labour scarcity for activities such as plucking, pruning, weed management etc is becoming an acute problem annually. In considering the daily wage rate, it had been revealed that a wage rate exceeding rate stipulated under the Wages Board Ordinance is being paid. Also, instances where disparities in wage levels reported regionally are numerous. Thus, more than the daily wage rate in organized small holder sector had been reported as the price of labour in the unorganized sector sometimes. Also, instances have been reported where payments to workers are made based on the number of kilos plucked and making extra payments when daily average intake is exceeded, paying of a higher daily wage in comparison to plucking for activities such as pruning which are skilled labour activities. 4.2 Production Cost of a Kilo of Green Leaf Average price and estimated cost of production of a kilo of a green leaf, calculated based on elevation prices received at Colombo auctions according to Sri Lanka Tea Board data (Schedule No 6 -A) is noted below. Table -14 Price Received and Production Cost of a Kilo of Green Leaf Year Average Price (RS/Kg) Average Cost of Production (Rs/Kg) To calculate production cost of a kilo of green leaf in 2010, the average yield per hectare* (Low country V.P.Tea) had been considered as 9788 Kg per Ha. (According to production data of Sri Lanka Tea Board) This yield level in 2009 had been estimated at 8589 Kg. -40-

48 According to calculation based on cumulative prices, average price paid for a kilo of green leaf in 2010 had increased by Rs.1.40 or 2.6% in comparison to year Estimated cost of production had increased by about 3.6%. To minimize escalation of production costs, the national fertilizer subsidy scheme had contributed to a great extents and it had been possible to reduce the percentage cost level of fertilizer by about 10%. However, due to increase in productivity during 2010, production margin had turned positive. Green Leaf Prices and Estimated Cost existent in 2007 According to Sri Lanka Tea Board data (Schedule No. 6-A), all elevations average price had increased by Rs or 2.8% in comparison to previous year. Thus, prices had increased for low country teas by Rs 4.96 or 1.28%, up country teas by Rs or 5.1% and mid country teas by Rs or 4.5%. Accordingly, price received for a kilo of green leaf was Rs in high elevations, Rs in mid elevations, Rs in low elevations whilst overall average price for a kilo of green leaf was Rs Estimated cost of production per kilo of tea in the low country (Including prices of fertilizer on national fertilizer subsidy) was Rs (Refer schedule 6-B, 6-C). 4.3 Production Margin and Price Average of production margin based on average productivity of the smallholdings for 2010, average green leaf prices existent during the year and estimated cost of production was Rs This had increased by 0.39% in comparison to year Replanting Cost of Tea Increase in labour cost for replanting due to labour scarcity and high prices of inputs had specially influenced cultivation costs. It is revealed in calculation that 63% of the total cost is incurred as the cost of labour. (Schedule No. 7-A, 7-B) -41-

49 Table 15 Cost Estimate of Tea Replanting per Hectare 2010 (Rs) (From uprooting to Plucking Stage) Activity Uprooting (First Year) Soil Rehabilitation (Second Year) Planting Tea (Third Year) 1 st Year Maintenance (Fourth Year) 2 nd Year Maintenance (Fifth Year) High & Mid Low High & Mid Low 360, , , , , , , , , , , , , , , , , , , ,577 Total 1,516,332 1,452,292 1,704,051 1,625, Rate of Incentive per Hectare and Cultivation Cost It is apparent from the following table that in considering the ratio between cultivation incentive and cultivation cost existent in year 2010, it had been possible to cover about 12% of the total cultivation cost. Table 16 Coat and Incentive Ratios For Replanting per Hectare ( ) % of Cultivation Cultivation Cost (Rs) Subsidy Rate Year Cost High/Mid Elevation Low Elevation High/Mid Elevation Low Elevation High/Mid Elevation Low Elevation % 35% % 28% % 26% % 25% % 29% % 25% % 25% % 21% % 17% * * % 29% % 27% % 25% % 19% % 17% % 23% % 20% % 15% % 19% % 17% % 13% % 13% * From 1998/07/01-42-

50 5. Supply and Use of Tea Fertilizer National Fertilizer Subsidy Scheme The government decided to grant the national fertilizer subsidy from mid of the year 2006, with the intention to mitigate the undesirable effect on the tea smallholdings sector due to increase in prices of fertilizer mixtures as a result of removal of urea subsidy by the government. However, the fertilizer subsidy confined to tea smallholders holding less than 5 acres had been extended to all tea smallholders up to 50 acres in extent from 2008, under Mahinda Chinthana fertilizer subsidy scheme. Accordingly, tea smallholders were able to purchase a 50 Kg bag of recommended tea fertilizer mixtures for tea lands in plucking at a concessionary price of Rs during the year 2009 too. The field programme relevant to this was implemented jointly by the Authority and the All Island Federation of Societies. The powers of supervision of sales points and documentation were entrusted to field staff of the Authority including Regional Managers. The fertilizer prices had been declared by the issue and quantities obtained by the tea smallholders on a district basis (as per table No. 17) were certified by the Authority for subsidy and referred to the National Fertilizer Secretariat. During the year 2009 a quantity of 135,728.86, metric tons of fertilizer had been recommended under fertilizer recommendations for the smallholders and the value of this quantity is Rs.5, million. The total quantity of fertilizer issued during 2010 is 123, Mt and the value is Rs.4, million. Table No. 17 National Fertilizer Subsidy Scheme 2009 / 2010 Regional Office Fertilizer Mixture Fertilizer Quantity Subsidy Amount 2009 Fertilizer Quantity 2010 Subsidy Amount Mt. Rs.Mn Mt. Rs.Mn Galle Matara Ratnapura Kalutara Kegalle VPLC 880 VPLC 1075 STLC 365 UT 752* UT 397* 25, , , , , , , **21, **18, **43, **10, **7, ** ** **1, ** ** Kandy Nuwaraeliya VPUM 910 STUM 400 4, , **3, **10, ** ** VPUM 1020 Uva VPUVA 945 8, **7, ** STUVA 435 VPUVA 1055 Total 135, , **123, **4, * Issued from third quarter 0f 2010 ** Based on information received before recommending total issue of fertilizer and value -43-

51 6. Tea Development Project Revolving Fund Loan Scheme An amount of SDR Million had been allocated by the Tea Development Project under a credit agreement signed between the Asian Development Bank and the Sri Lankan government, for implementation for 6 years. An amount of SDR 15.4.million was reserved for development activities in the small holder sector by the Central Bank of Sri Lanka and this credit scheme was due to be implemented from mid of year This loan amount consisted Rs.1100 Million and Rs 750.Million was provided for field development activities in the tea small holder sector. Facilities of obtaining a 50% interest subsidy not exceeding Rs.hundred thousand per hectare from the cess fund for smallholders who complete tea replanting activities in conformity to technical recommendations within the specified time period. Requests were made by the participating financing institutions through the Central Bank to obtain the interest subsidies due to loan recipients and it was necessary to obtain inspection reports on field progress of the loan recipients prior to payment of interest subsidy. Accordingly, payment of interest subsidy for loan recipients who qualify for interest subsidy based on the field inspection reports from the regional offices is to be completed in year

52 Regional Office Matara Chapter 7 Special Projects in Regions and Other Activities Initiation of Diploma & Certificate Programme on Scientific Tea Manufacture and Quality Management The scientific and practical knowledge and understanding of officers at various levels in tea factories about tea manufacture is a factor directly affecting quality tea manufacture. With the objective of developing this, the approval of the senate and the management board of the university was obtained to conduct the above programme at the Faculty of Agriculture, University of Ruhuna with the leadership of the Tea Development Council of Matara/Hambantota districts. A diploma programme under this is scheduled to be started in It would be possible to improve quality tea manufacture as well as to provide employment to he unemployed through this course. Tea Factory Based Extension & Development Programme This programme was implemented jointly by Authority, Tea Commissioner s Division of the Sri Lanka Tea Board, Tea Factory Owners Association and Federation of Tea Smallholder Development Societies. The programme was operative in 20 tea factories in the year Individual Extension Programme A programme to maintain a handbook for record keeping and giving advice was implemented with 100 selected tea smallholders from a Tea Inspector / Extension Officer range, as a pilot project. To establish results from this programme, a study is to b conducted after 2 years. Regional Office Ratnapura Tea Based Farm Management Action was taken to issue 7585 pepper plants to 61 farmers in 06 Tea Inspector / Extension Officer ranges of Opanayake, Weligepola, Pinnawala, Ellearawa, Rassagala and Imbulpe. Supply of Tea Plants To start nurseries in the operational areas of Belihuloya Ihalagama Landuyaya Tea Small Holder Development Societies in Imbulpe Tea Inspector / Extension Officer range in tn Balangoda Sub Office area, shoots of new cultivars of TRI 3000 and 4000 series was supplied. -45-

53 Regional Office Kandy Establishment of Land Ownership Action was taken to obtain land ownership from the Land Reform Commission for 59 Hectares of land, consisting of permits issues to 499 tea smallholders in the areas of Anthinikanda, Ovatenna, Rockland, Loolkandura, Ambalamana in Walapane, Hewaheta, Werellagama, Ukuwela, Tea Inspector / Extension Officers ranges of Matale, Wattaegama and Hanguranketha Sub Office Areas, Programmes Conducted with Other State Organizations Under the programme for doubling the agricultural production in the Kandy District, 04 awareness workshops for relevant field officers for agricultural development was conducted jointly with the District Secretariat, Agriculture Department, Hadabima Authority, Coconut Cultivation Board, Department of Census and Statistics and Agrarian Services Department. Tea Farm Families Development An awareness programme on tea replanting and infilling was conducted for development of tea farm families development of Udispaththuwa and Werapitiya Tea Smallholder Development Societies at Hatale tea factory in Wattega, Danture. Production of Quality Leaf Special seminars were conducted on the supply of quality leaf for tea smallholders who supply leaf to 04 factories of Ankumbura of Matale, Giragama, Hatale and Yahalatenna of Wattegama, jointly with those factories. Regional Office Kalutara Restarting of Hedigalla Tea Nursery Construction was started to restart the Hedigalla Tea Nursery with a capacity of 150,000 plants on financial provision of Rs.03 million from the Ministry of Economic Development, as a special project. -46-

54 Regional Office Kegalle Smallholder Plantations Entrepreneurship Development Programme (SPEnDP) (IFAD) Tea replanting development and input tea nursery development activities were planned under activities of this programme. 237 beneficiaries were targeted under replanting and permits were issued to 55 persons in 2010 the extent covered by these was 8.67 Ha. Number of beneficiaries who completed soil rehabilitation - 1 was 162 and extent covered under this was 17 hectares. Input material such as Grass fertilizer, Dolomite, Polythene, Bazamid was provided and total cost by the project including armer training and subsidy was Rs.1.34.million. Regional Office Nuwaraeliya Smallholder Plantations Entrepreneurship Development Programme (SPEnDP) (IFAD) Under the above project, development activities of replanting and supply of inputs were implemented in Tea Inspector / Extension Officer ranges of Gampola, Pussellawa, Nillamba, Panvilatenna, Pupuressa, Tispane, Kurunduwatta, Ulapane and Dolosbage. 182 farmers were project beneficiaries under this for year Extent for which permits were issued was 27 hectares. Uprooting in 19 Ha, Soil rehabilitation 1 st stage in 03 Ha, Soil conservation - stage II in 30 Ha had been completed. Planting was completed in 8.5 Ha. For grass cultivation in 07 Ha of 69 farmers under tea replanting, 412 Dolomite bags (50 Kg) and 135 fifty kilo bags of grass fertilizer had been provided. To prepare nurseries, polythene bags, 10 packets of Bazamid 500 g packs, 273 packets of 200 g packs, 445 packets (2 Kg) of T 65 fertilizer and 47 Tea Cultivation handbooks were provided to 48 farmers in year In addition to this, 43 permits have been issued for crop rehabilitation covering 08 hectares. Total cost by the project in 2010 is Rs.7.6 million. -47-

55

56 Schedule No. - 2-i Organizational Structure As per MSD/30 of the Management Services Department Tea Small Holdings Development Authority Organizational Structure - Head Office Chairman General Manager Deputy General Manger (Development) Deputy General Manager (Extension) Internal Auditor Regional Manager Manager (Development) Manager (Extension) Manager (Finance) Manager (H.R. & Admin) Manager (Training) Manager (Planing & Monitoring) Asst Manager (Development) Asst. Manager (Extension) Assistan Manager (Finance) Assistant Manager (Administration) ssistant Manager (Planning & Monitoring) Audit Officer Accounts Officer Administrative Officer Training Officer Management Assistant (Non- Teachnical) Management Assistant (Non- Technical) Management Assistant (Non- Technical) Management Assistant (Non- Technical) Mgt. Assist (Technical & Non-Technical) Management Asistant (Non- Technical) Management Assistant (Technical) Management Assistant (Non- Technical) Primary Level (Skille) Primary Level (Skilled) Primary Level (Skilled) Primary Level (Skilled) Primary Level (Skilled and Unskilled) Primary Level (Skilled / Semi Skilles / Unskilled Primary Level (Skilled) * Hantana Training Center (1) Higher Management 2-1 (2) Higher Management 1-1 (6) Middle Management 1-1 (5) Middle Management 1-1 (4) Junior Management 1-1 (1) Mgt,Asst 2-2 Book Keeper (35)Mgt.Asst. 1-2 Reg Office - 26 Hantana - 02 (10)Primary Level:3 (14) Primary Level:

57 -50-

58 Schedule No. -03 TeaSmall Holdings Development Authority Details of existing Cadre up to 2010/12/31 Position Grade Head Galle Matara Ratnapura Kandy N'Eliya Uva Kalutara Kegalle Hantana Total Office Region Region Region Region Region Region Region Region Trg Center 1 General Manager I Deputy General Manager (Development) II 0 3 Deputy General Manager (Extension) II Internal Auditor III Finance Manager III Asst.General Manager (H.R. & Administration) III Asst General Manager (Development) III Regional Manager III Training Manager III Manager (Planning/Monitoring) III Asst.General Manager ( Services) III Asst. Manager (Administration) IV 0 13 Accountant IV Assr.Regonal Manager (Plg & Development) IV 0 15 Asst.Regional Manager (Extension) IV Senior Administrative Officer IV Asst.Community Development Manager IV Senior Internal Audit Officer IV 0 19 Asst. Data Processing Manager IV Asst Project Manager IV Regional Planning Officer IV / V Administrative Officer IV / V Assistant Accountant V Public Relations Officer V Senior Tea Inspector / Extension Officer VA Supervisory Clerk VA

59 Schedule No. -03 TeaSmall Holdings Development Authority Details of existing Cadre up to 2010/12/31 Position Grade Head Galle Matara Ratnapura Kandy N'Eliya Uva Kalutara Kegalle Hantana Total Office Region Region Region Region Region Region Region Region Trg Center 27 Supervisory Stenotypist VA Supervisory Typist VA 2 2 VA/VI 29 Book Keeper Cashier 0 31 Clerk VI/VII/VIII Computer Operator VI/VII/VIII Steno Typist VI Typist VI Store Keeper VI Personal Assistant to Chairman VI 0 37 Tea Inspector Extension Officer VI/VII Nursery Assistant VIII/VII Maintenance Supervisor VIII Receptionist Telephone Operator VIII 0 41 Driver VII/VIII/IX Cook X Assistant Cook XI Cycle Messenger X Chief Karyala Karya Sahayaka IX Circuit Bungalow Keeper Karyala Karya Sahayaka IX/X Office Labourer XI Sanitary Labourer XI Casual (Computer Operator) Casual (Clerk) Circuit Bungalow Keeper (Contract) Sanitary Labourer (Casual) 1 1 Total

60 Schedule No: 04 Production in the Tea Smallholdings Sector (Million Kilograms) National Production of Tea Production Smallholdings Sector % Contribution to Year Percentage National Production Production Growth (8.98) (21.63) (1.11) (0.06) (0.84) (2.15) (6.1) Source: Sri Lanka Tea Board -53-

61 Schedule No - 5-A Issue of Shoots of New Improved Cultivars from Mother Bush Areas District Location Year Commerc Tea Society & ial Smallholder Others Nurseries % s % % Institutional Nurseries % Production No. % Galle Neluwa & Walahanduwa , , , , Hantana Hantana , , , , Kalutara Vogan , , , , , Kandy Rahathungoda & Sooriyagoda , , , , Kegalle Hingula , , Matara Mawarala , , , , Nuwaraeliya Nelligolla & Tispane , , , , Uva Bandarawela & Haliela , , , Total 98, , , , ,

62 Schedule No: 5 - B Performance of Institutional Tea Nurseries Year 2010 (Rupees) Description Wlahanduwa Vogan Hingula Rahathungoda Tispane Hantana * Nelligolla, Planting Season South West South West South West North East South West South West North East Total No. of Plants Estimated 50, , , , ,000 40, ,913 Estimated Cost 555, ,323, ,093, ,790, ,595, , ,720, Prodcuction Cost per Plant Cost / Plant on Sales Actual Cost Amount 386, , ,771, ,514, ,494, , ,264, % Cuttings Planted No. 50, , , , ,319 38, ,790 % Dead Plants No. 4,901 20,239 21,769 34,830 67,726 8, ,995 % Plants Sold No. 43,750 91, , , ,879 28, ,862 % Income 546, ,145, ,773, ,703, ,760, , ,285, Profit 160, , , , , , , * Nelligolla nursery is closed Source: Progress reports of TSHDA -55-

63 Schedule No: 5 C Progress of Issuing Permits for Commercial Tea Nurseries ( ) Galle Regional Office Number of Permits Issued Kalutara Matara Ratnapura Kegalle Kandy Nuwaraeliya Uva Total Source : Progress Report of TSHDA -56-

64 Schedule No: 6 A Elevation wise Price of Tea at Colombo Auctions Gross Average Price (Price Rs/Kg) Year Up Mid Low All Country Country Country Elevations Average Source: Sri Lanka Tea Board -57-

65 Schedule No. 6 - B Cost of Producton Estimate of a Kilo of Green Leaf 2010 (Low Country) 9788 Kg of Green Leaf / Hectare / Annum ( 2105 Kg of Made Tea) Activity (With Subsidy) Frequaency of Parctice Labour Units Material Cost Total Cost 1 Plucking (20 Kg Per 45 times at 1/2 labour units Person per Day) ii Leaf Transport Weeding At 10 labour units per month Fertilizer mixture & Application i Application of VP-LC/UT-752 At 8 labour units (Up to 4 Applications) ii Dolomite Application At 4 labour units (2 applications/cycle) iii Zinc Application At 5 labour units (2 Applications) Shade Management At 5 labour units (2 occasions) Prunning At labour units (2 year cycle) 6 Mossing At labour units (2 year cycle) 7 Tipping At labour units (2 year cycle) 8 Draining At 36 labour units (2 year cycle) 9 Supplying acancies 16 lab. Units & 375 plants Average prodcution cost per kilo of green leaf (Excluding general charges) General charges 7.00 (General Charges) Transport cost 1.80 Cost of producton * 2 year cycle had been used for the low country * Fertilizer mixturesdosages are in conformity to TRI recommendations and prices are that existed during the year * Price of a VP Tea plant is Rs * Transport cost has been added to material cost * Daily labour wage Rs 375 Daily wage rate for prunning Rs 600 * Dolomite Mt 1 Rs 5000 * Zinc Sulphate Mt 1 Rs * VP/LC Mt 1 (With Subsidy) Rs UT-752 Mt 1 (With Subsidy) Rs

66 Schedule No. 6-C Cost of Producton Estimate of a Kilo of Green Leaf 2010 (Low Country) Activity 9788 Kg of Green Leaf / Hectare / Annum ( 2105 Kg of Made Tea) (Withot Subsidy) Frequaency of Parctice Labour Units Material Cost Total Cost % 1 Plucking (20 Kg Per 45 times at 1/2 labour units Person per Day) ii Leaf Transport Weeding At 10 labour units per month Fertilizer mixture & Application i Application of VP-LC/UT-752At 8 labour units (Up to 4 Applications) ii Dolomite Application At 4 labour units (2 applications/cycle) iii Zinc Application At 5 labour units (2 Applications) Shade Management At 5 labour units (2 occasions) Prunning At labour units (2 year cycle) 6 Mossing At labour units (2 year cycle) 7 Tipping At labour units (2 year cycle) 8 Draining At 36 labour units (2 year cycle) 9 Supplying acancies 16 lab. Units & 375 plants Average cost of production per Kilo of Green Leaf (Without general charges) General Charges 7.00 (General Charges) Transport Cost 1.80 Production Cost * A 2 year cycle had been used for low country * Fertilizer mixturesdosages are in conformity to TRI recommendations and prices are that existed during the year * Price of a VP Tea plant is Rs 15.Price of a VP Tea plant is Rs * Transport cost has been added totransport cost has been added to material cost * Daily labour wage Daily labour wage 375 * Daily wage rate for prunning Daily wage rate for prunning 600 * Dolomite Mt 1 Dolomite Mt * Zinc Sulphate Mt 1 Zinc Sulphate Mt * VP/LC Mt 1 (Without Subsidy) VP/LC Mt 1 (With Subsidy) * UT-752 Mt 1 (Without Subsidy)UT-752 Mt 1 (With Subsidy) *Rs.1.80 and Rs 7.00 have to be added to the cost as transport cost and general charges respectively. -59-

67 Schedule No. 7 - A Replanting Cost Estimate for High and Mid Elevations (From Uprooting to Plucking Stage) Rs/Hectare Daily Wage Rate Rs. 600 Quantity Cost Lab. Unit s Uprooting Soil Rehabilitation Tea Planting First Year Maintenanceecond Year Maintenanc Total Cost First Year Second Year Third Year Fourth Year Fifth Year Materi al Cost Total Cost Lab. Cost Materi al Cost 1 Uprooting old tea and clearing (40 bushesper day in a land with 50% stand) 2 Forking, leveling and removal of roots Preparation of slope, draining and lining Application of dolomite (@ Rs.5.00 per kilo) Planting Gautamala (500 cuttings per day) Fertilizer application for grass (989 Kg at Rs.51 per kilo) Lopping grass (At 1 lab.unit per lopping) Weeding (At 10 lab. Units per round) Planting of shade (740 Accasia & Dadaps at Rs.1.00 per cutting) and 370 Kg of Dolomite 10 Planting high shade (100 Grevillia at Rs.6/-) and 100 Kg Dolomite Removal of Grass Lining, pegging and holing Planting of tea (At Rs.15/- per plant) Management of shade (Twic a year) Blister Blight Control (200 g of Perenox at Rs.93/-, 10 rounds at 280 g per round) 16 Bringing in to plucking Mulching Fertilizer application (T 200 Third year) Fourth Year T 750 Fifth year Supplying vacancies Nematode control (7 g per planting hole) Supply of Curator 21 For pest control & equipment Total ,704, Total Cost Lab. Cost Materi al Cost Total Cost Lab. Cost Materi al Cost Total Cost Lab. Cost Materi al Cost Total Cost Lab. Cost Materi al Cost Total Cost % of Total Cost * Cost estimates are in conformity to TRI recommendations and includes material and transort costs -60-

68 Schedule No. 7 - B Quantity Cost Lab. Unit Replanting Cost Estimate for Low Elevation (From Uprooting to Plucking Stage) Rs/Hectare Daily Wage Rate Rs. 600 Uprooting Soil Rehabilitation Tea Planting First Year Maintenanc econd Year Maintenanc First Year Second Year Third Year Fourth Year Fifth Year Materi al Cost Total Cost Lab. Cost Materi al Cost 1 Uprooting old tea and clearing (40 bushesper day in a land with 50% stand) 2 Forking, leveling and removal of roots Preparation of slope, draining and lining Application of dolomite (@ Rs.5.00 per kilo) Planting Gautamala (500 cuttings per day) Fertilizer application for grass (989 Kg at Rs.51 per kilo) Lopping grass (At 1 lab.unit per lopping) Weeding (At 10 lab. Units per round) Planting of shade (For 300 Accasia & Dadaps at Rs.1.00 per cutting and 370 Kg of Dolomite) 10 Planting high shade (100 Grevillia at Rs.6/-) and 100 Kg Dolomite Removal of Grass Lining, pegging and holing Planting of tea (At Rs.15/- per plant) E Management of shade (Twic a year) Blister Blight Control (200 g of Perenox at Rs.93/-, 10 rounds at 280 g per round) Bringing in to plucking Mulching Fertilizer application (T 200 Third year) Fourth Year E T 750 Fifth year Supplying vacancies Nematode control (7 g per planting hole) Supply of Curator 21 For pest control & equipment Total ,625, Total Cost Lab. Cost Materi al Cost Total Cost Lab. Cost Materi al Cost Total Cost Lab. Cost Materi al Cost Total Cost Lab. Cost Total Cost Materi al Cost Total Cost % of Total Cost * Cost estimates are in conformity to TRI recommendations and includes material and transort costs -61-

69 Schedule No. 08 Issue of Fertilizer to Tea Smallholders under Credit Scheme Metric Tons ( ) Year Credit Scheme Other Cash Sales Total Issues /

70 -63- Schedule No: 09 Progress of Tea Replanting Subsidy Scheme Year Permits Issued Extent Covered by Permits (Ha) Extent Uprooted (Ha) Extent Planted (Ha) Annual Cost (Rs.Mil) Annual Provision (Rs.Mil) Source: Sri Lanka Tea Board

71 Schedule No: 10 Progress of Crop Rehabilitation (Infilling) Subsidy Scheme on Tea Lands No. of No. of Plants No. of Plants Annual Year Plants receiving 1 st receiving 2 nd Total Subsidy Provision Paid Rs.Mil Permitted Installment Installment Rs.Mil * ** ** * ** ** Infilling subsidy scheme through societies Source: Progress reports of the TSHDA -64-

72 Schedule No. 11 Training Programmes in 2010 Training Programme No. of days Number Officers Participating Conducting Institution conducted Participated 1 Leadership / Team Behaviour / Results Based Management Programmes 2 34 Regional Manager/Asst.Reg. Manager Hantana Training Center Implementation at Field Level and Communiction (Presentation Skills) Training Programme Senior Tea Inspector/Extension Officer 2 - Do Do - - Do Do Do - - Do Do Do - - Do Do Do - - Do - 6 Plannng of Training Objectives - Training Sessions under Results Based Management 2 28 Asst. Regional Manager - Do - and Presentations Senior Tea Inspector/Extension Officer - Duties / Responsibilities - Strategies used for implementation of Field Activities - Monitoring / Evaluation Mechanisms for Supervision - Information Analysis and Evaluation Formats - Preparation of Audio / Visual aids 7 Training Objectives - Training Session Planning under Results Based Management 4 80 Senior Tea Inspector/Extension Officer - Do - and Presentations (Power Point) Tea Inspector / Extension Officer 8 Workshop on Conflict Resolution at Work Place 1 Mr.H.Dayananda (Admin.Officer) -65- Sri Lanka Foundation Institute Mr.T.M.N.K.Thanaymwatta (Admin. Officer - Acting) Department of Official Languages Sri Lanka Information & Communication Technology Agency 9 Institutional Language Training - Tamil Clerical Staff of the Head Office 10 Computer Systems Control Training Programme fro State Sector Officials 1 Mr.H.D.Iran Gunaratne

73 Schedule No: 12 Tea with Rubber Subsidy Scheme Year No of Extent Land Planting Annual Annual Permits Covered by Preparation (Ha) Expenditure Provision Issued Permits (Ha) Rs.Mil Rs. Mil (Ha) Source: TSHDA Progress Reports -66-

74 Schedule No : 13 Activity on Tea New Planting Subsidy Scheme Year Permits Issued Extent covered by Permits (Ha) Extent Uprooted (Ha) Extent Planted (Ha) Annual Cost (Rs.Mil) Annual Provision (Rs.Mil) * * The subsidy scheme is not implemented since 2003 Source: TSHDA Progress Reports -67-

75 Schedule No: 14 Tea Exports and Foreign Exchange Earnings Year ** Quantity Exported (Mil Kg) * Export Earnings (Rs.Mil) % Contribution to Total Export Earnings ***315 *** ***294 *** *Including earnings from re-exports ** Including imported teas *** Excluding earnings from re-exports -68-

76 Schedule No : 15 Value Added to Gross Domestic Product by Tea Year % of Value Added Source : Central Bank of Sri Lanka -69-

77 -70-

78 -71-

79 -72-

80 -73-

81 -74-