Annual Performance Report

Transcription

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2 Annual Performance Report 2011 Ministry of Plantation Industries No. 55/75, Vauxhall Lane, Colombo 02

3 Content 1. Ministry of Plantation Industries Page 1.1 Introduction Vision Mission Purposes Objectives Scope Development activities carried out during the year Financial Review 4 3. Sectoral Review 3.1 Tea Sector Rubber Sector Oil Palm Sector Foreign Funded Development Projects Smallholder Plantations Entrepreneurship Development Programme Divisional Performance 4.1 Administration Division Accounts Division Internal Audit Division Development Division Planning Division Plantation Management Monitoring Division Tea, Rubber & Coconut Estates (Control of Fragmentation) 25 Annex 1 - Financial Progress in year

4 1. Ministry of Plantation Industries 1.1 Introduction The Ministry of Plantation Industries was first established in year 1971 for development of the plantation crops including tea, rubber, coconut, palmyrah, sugarcane, mulberry and cashew. With the amendment to the functions of Ministries on 29 th January 2007, development of the traditional plantation crops of Sri Lanka such as tea, rubber and coconut was assigned to this Ministry and Janatha Estates Development Board, State Plantation Corporation and state owned Plantation Companies such as Kurunagala, Chilaw and Elkaduwa also came under the purview of this Ministry. Thereafter, as per the amendment to the functions of the Ministries on , in addition to the traditional plantation crops such as tea, rubber and coconut, development activities of sugarcane, and the development of oil palm under the plantation crops which are not assigned to any other Ministry, ware also assigned to this Ministry. Later, on the amendment to the functions on , in addition to tea and rubber, development activities of oil palm under the plantation crops which are not assigned to any other Ministry are also to be carried out by this Ministry. 1.2 Vision Achieving national prosperity through development of the plantation industry 1.3 Mission To enhance the productivity, profitability and sustainability of the plantation industry through ensuring an economically, socially and environmentally viable plantation sector 1.4 Purposes i. To make quantitative increase in the production of tea and rubber cultivations. ii. To improve tea and rubber exports through value addition. iii. To increase the annual amount of foreign exchange from the export of tea and rubber. iv. To enhance the productivity of the plantation sector through the researches carried out for development of the plantation sector.

5 1.5 Objectives i. Enhancement of productivity. ii. Increase of the annual replanting rate. iii. Implementation of research and development programmes. iv. Expansion of cultivation in non-traditional areas. v. Value addition and promotion of brand names 1.6 Scope In line with the Rapid Economic Development Programme under the Mahinda Chinthana Idiri Dekma, the following activities are carried out by the Ministry of Plantation Industries under the National Plantation Industry Policy Framework formulated to achieve the above purposes and establish sustainable development in the plantation sector. i. Implementation of polices, plans and programmes on the plantation sector. ii. Formulation, implementation and operation of National Plantation Industry Policy based programmes and projects. iii. Promotion of the optimum productivity of the lands managed by the Plantation Companies. iv. Training of employees aimed at the efficient management of the estates managed by the Plantation Companies. v. Development and promotion of tea and rubber industries and the matters pertaining to the related research activities. vi. To reap the maximum use from the plantations through multi cropping and compact farming system and increase of production and employment thereby. vii. Issuance of permits in respect of the control of fragmentation of tea, rubber and coconut estates. 1.7 Development activities carried out during the year 2011 i. Taking necessary action to amend the Acts of the institutions coming under the Ministry in conformity to the current and future requirements to facilitate the achievement of aimed development activities. 2

6 ii. Initiation of basic researches and cultivations for development of the rubber industry in Northern and Eastern provinces. iii. Taking necessary measures to ensure a reasonable price for small holders, growers in the plantation sector and consumers. iv. Promotion of methodologies for attraction of the possible highest amount of foreign exchange to the country through value addition of export crops. v. Identification of suitable lands for new planting as per the census on uncultivated lands owned by the plantation Companies. vi. Improvement of the productivity through encouragement for environmental friendly cropping and processing of products. vii. Settlement of issues of the small holders and stakeholders in the plantation sector. viii. Encouragement for researches in tea and rubber plantation sectors. ix. Human Resources Development in the plantation sector 3

7 2. Financial Review (Rs. Million) Institution Capital allocations for year 2011 Recurrent allocations for year 2011 Capital expenditure up to 31 st December 2011 Recurrent expenditure up to 31 st December 2011 Capital performance % Recurrent performance % Ministry Sri Lanka Tea Board Tea Research Institute Tea Small Holdings Development Authority Rubber Development Department Rubber Research Institute Thurusaviya Fund National Institute of Plantation Management SPEnDP Total Allocations are not made by the Treasury for institutions such as Kalubowitiyana Tea Factories Ltd. and Tea Shakthi Fund which are business entities coming under the Ministry. 4

8 3. Sectoral Review 3.1 Tea Sector The vision for the tea sector is to make the Ceylon Tea the premier brand in the global beverage market through enhancement of productivity and production of cultivations of Plantation Companies and small holder sector for sustainable development. Sri Lanka Tea Board, Tea Research Institute, Tea Small Holdings Development Authority, Tea Shakthi Fund and Kalubowitiyana Tea Factories Ltd. are government institutions in the tea sector. In year 2011, the tea cultivation had expanded to the extent of 204,619 hectares of which 120,664 hectares (59%) owned by the tea small holding sector. The average yield of tea per hectare in the year under review was 1,475.6 kg which is a 0.16% decrease when compared with the year The tea production in year 2011 was 327.5mn kg and it is 1% decrease as against the year The slight downturn in the tea cultivation was caused by the unfavorable weather conditions prevailed in the all tea growing districts at the outset of the year 2011 especially in the first two months. As per the elevational tea production in the year under review, it was reported that the low grown tea production was 196.7mn kg (60%) and high grown and medium grown tea productions were 78.2mn kg (24%) and 52.6mn kg (16%) respectively. (Bar Chart 3.1) Bar Chart 3.1: Elevational Tea Production in 2011 (%) 16% Low Grown High Grown Medium Grown 24% 60% 5

9 Accordingly, low grown tea production which was mn kg in year 2010 has shown an increase of 0.5 mn kg (0.25%) in year During the year under review, it was reported that the annual average price of all types of tea at Colombo tea auction was Rs per kg and the annual average export price was Rs per kg. This is a 2% increase in the price as against year Taking into account of mn kg of tea produced in year 2011 as per the main tea producing methodologies, Orthodox tea production contributed 92% of the total tea production (301.9 mn kg.) and CTC and Green tea productions contributed 7% (22.6mn kg.) and 1% (3.0 mn kg) respectively. Tea small holders produced mn kg of tea in year It was 70% of the total tea production. The sectoral tea production in year 2011 is given in Table 3.1. Table 3.1: Sectoral Tea Production in 2011 Sector Production (mn. kg.) Corporate Sector Regional Plantation Companies Tea Shakthi, JEDB,SLSPC & Elkaduwa Tea Small Holding Sector 229 Total The quantity of tea produced by tea small holders in year 2011 has shown a decrease of 0.5% when compared with the production of 230.1mn kg in year The contribution of tea small holders to the total tea production in year 2011 was further significant due to the tea new planting and replanting programmes, infilling programmes, extension and advisory services and training programmes continuously conducted by the Tea Small Holdings Development Authority for the tea small holders, although unfavorable weather conditions prevailed in the first two months of the year under review. The fertilizer subsidy provided to the tea small holders under the National Fertilizer Subsidy Scheme was continued by the Tea Small Holdings Development Authority up to the end of first half of the year under review. The total quantity of tea fertilizer distributed upto May in year 2011 under this Fertilizer Subsidy Scheme that caused for increase in productivity of the tea small holdings sector was 35,436.2 mt and its subsidy value was about 6

10 Rs million. Further, the contribution of the Tea Shakthi Fund was significant in distribution of tea fertilizer among the farmers and the sale of fertilizer through the Tea Shakthi Fund under the Subsidy Scheme in year 2011 was mt. Its subsidy value was Rs.27.3 million. Further, tea replanting was continued in year 2011 as well with a view to increase the tea production, and the total extent replanted with tea by the tea small holder sector and Plantation Companies during the year 2011 was 1851 hectares. The total quantity of tea exports including re-exports in year 2011 was mn kg and the export income was Rs.164,854 mn. It is 1.26% increase when compared with Rs.162,789 mn recorded in year Russia was the main destination of our tea exports in year 2011 and 49.1 mn kg of tea was exported to Russia in the year under review. Iran was the second main destination and the quantity was 30.9 mn kg. The quantities of tea exports to 10 main destinations in year 2011 are given in Table 3.2. The quantity was mn kg and it is about 70% of the total export. Table 3.2: Top 10 countries on the quantity of tea exports in year 2011 Country Russia Iran Syria Iraq UAE Turkey Azerbaijan Japan Kuwait Ukraine Quantity of Exports (Mn.kg) Total The most important activities carried out for development of the entire tea industry during the year under review are given below. 7

11 Taking action to initiate an annual Fund of Rs.1000/- million with the contribution of tea exporters as per the decision made to expand globally the tea promotion and marketing programme for annual increase of foreign exchange earnings from tea exports, at an investment of Rs. 5 billion. Formulation and implementation of policy guidelines for the activities in the tea sector. In this context, preliminary actions were taken for the amendment of Acts and Regulations. Coordination with the stakeholders in the tea sector such as growers, traders, exporters, brokers, manufacturers of finished products and Plantation Companies etc. Appointment of a special Committee for planting material and fertilizer mixtures in the tea sector and taking steps to settle the related issues. Taking necessary action to enact regulations to increase the subsidies granted for tea replanting. Making relevant arrangements to hold the session of FAO/IGG on Tea in January 2012 in Sri Lanka. Providing policy assistance for research activities of the Tea Research Institute. 3.2 Rubber Sector The vision of the rubber sector is to enhance the national production through establishment of quality and productive plantations, and create an environment conducive for the improvement of economic and social status of those who engage in the rubber industry. Necessary steps were further taken to develop the rubber plantation as a quality and productive plantation through the various programmes implemented during the year under review by the Rubber Development 8

12 Department, Rubber Research Institute and Thurusaviya Fund coming under the Ministry of Plantation Industries. The total extent of rubber cultivation in the year 2011 was 127,500 hectares of which 101,600 hectares that is, about 80% was mature (tapping) cultivations. The total rubber production in the year under review was 158,198 mn kg. It is a 3.4% increase when compared with 152,987 mt recorded in year The achievement of such increase in the rubber production in year 2011 even under more unfavorable weather conditions than year 2010, is a success of the rubber sector. In the year 2011, the sheet rubber production was at a high percentage out of the total rubber production and the total production of sheet rubber during the year amounted to 60,699 mt. ( 38%.) Category wise quantities of rubber products in the year 2011 are given in Table 3.3. Table 3.3: Categorization of the rubber products in year 2011 Category Sheet Sole Crepe Scrap Crepe Latex Crepe T.S.R. Centrifuge and Other Production (Mt.) 60,699 3,384 1,332 59,933 7,981 24,869 Percentage of Production (%) 38% 2% 1% 38% 5% 16% 158, % Since the price for natural rubber soared in the international market in year 2011, the private sector was attracted highly to rubber replanting and as a result, it had an increase in the supply of natural rubber in the rubber market was visible the year Accordingly, though the average price for 01kg of Ribbed Smoked Sheets No.01 (RSS 01) was Rs at the Colombo Rubber Auction in January 2011, a decline to Rs.380,63 was recorded by December However, the average auction price for 01kg of Ribbed Smoked Sheets was Rs in the year and the sum of Rs.636 per kg which was the highest price recorded in the year, was recorded in February The farmers who engage in the rubber cultivation as well as the farmers in the 9

13 non traditional areas got encouraged towards to rubber cultivation due to the higher prices for RSS 1 fixed at the Colombo Rubber Auction during the first few months of the year Due to programmes implemented by the Rubber Development Department, Rubber Research Institute and National Institute of Plantation Management in the year, there was a continuous growth in the knowledge of rubber growers on application of fertilizer, fixing of rain guards and technical know-how. The programmes on rubber new planting and replanting were continuously implemented during the year 2011 as well. The total extent of lands cultivated under the rubber replanting programme implemented by the Rubber Development Department at a cost of Rs.359 million in year 2011 under the subsidy programme, is 2,847 hectares of which 1,122 hectares that is, 39% owned by the small holder sector in the traditional areas and 1,725 hectares that is, 61% was in the large estates owned by the Plantation Companies. In addition, the extent replanted with rubber by the Plantation Companies and institutions of the public sector out side the government subsidies was 4,141 hectares. The amount of subsidy provided for rubber replanting programme implemented in the traditional and non traditional areas during the year under review amounted to Rs.211 million and the extent cultivated was 1,534 hectares of which 1,006 hectares (66%) were in the traditional areas and 528 hectares (34%) were in the non traditional areas. Further, 644 hectares in Monaragala District were newly cultivated with rubber in year 2011 under the IFAD. In addition, the Plantation Companies in the large estate sector and the government institutions have newly cultivated with rubber in 838 hectares of their estates in the year Moreover, the rubber fertilizer subsidy programme was implemented up to the second half of the year and the total quantity of fertilizer distributed up to May 2011 was 1,959 mt of which 897 mt of fertilizer (46%) was distributed among the rubber small holders who had mature cultivations, under the fertilizer subsidy and the quantity of fertilizer distributed for the lands with immature cultivations was 1,062 mt. 10

14 The quantity of raw rubber exports in year 2011 was 42,606 mt and it was 27% of the total production in the year. However, 17% drop can be seen in the export of raw rubber in year 2011 when compared with 51,503 mt of raw rubber exports in year 2010 mainly due to the value addition of 111,727 mt of rubber locally in year Accordingly, Rs.95,169 million was earned from the export of value added rubber products during the year under review. It is a 49% increase as against Rs.63,968 million of income earned in the year Category wise rubber exports during the year under review are given in the Table 3.4. Table 3.4: Categorization of rubber exports in year 2011 Category Quantity of Exports (Mt) Export Percentage of the Production 1. Sheet 2. Sole Crepe 3. Latex Crepe 4. T.S.R. 5. Centrifuge and other 13,560 2,471 20,904 3,656 2, % 5.8% 49.1% 8.6% 4.7% Total 42, % The activities carried out in year 2011 for development of the entire rubber industry are given below. Implementation of programmes for fixing of rain guards in the rubber estates owned by the rubber small holders and Regional Plantation Companies under the target of 8000 hectares with the purpose of enhancing the productivity of the rubber cultivations. In this context, implementation of special programmes launched for promotion of the fixing of rain guards in the rubber cultivations, supervision and facilitation were undertaken. Taking preliminary actions to commence a plant nursery at Padiyathalawa in Northern Province to meet the requirement of rubber plants in non traditional areas. Taking special measures to expand rubber cultivation in non traditional areas. 11

15 Coordination with the stakeholders related with the rubber cultivation. Formulation and implementation of policy guidelines required for the rubber sector. Taking actions to enact regulations for the increase of subsidies granted for rubber new planting and replanting. Undertaking basic coordinating activities related with the 3 rd phase of the City Cluster Economic Development Project to be implemented under a grant from the Asian Development Bank. Providing policy assistance required for research activities of the Rubber Research Institute. 3.3 Oil Palm Sector By year 2011, Oil palm has been cultivated in approximately 6,557 hectares under the Plantation Companies (Agalawatta, Watawala, Namunukula, Elpitiya, Kotagala) to which the oil palm cultivation has been expanded and this Ministry has granted approval to import the seeds under the tariff concessions for the Plantation Companies on their requirement for cultivation of oil palm. The recommendation has been made to import of 157,000 seeds required for the Plantation Companies to cultivate during the year Plantation Company Agalawatta Watawala Namunukula Elpitiya Kotagala Table 3.7: Expansion of the Oil Palm Cultivation Extent under mature Extent under immature Total extent , ,844 6,557 12

16 3.4 Foreign Funded Development Projects Smallholder Plantations Entrepreneurship Development Programme The objective of the Smallholder Plantations Entrepreneurship Development Programme is to improve the life style of the project beneficiaries settled under the Hadabima and Mahaweli resettlement in the Mid Country Programme area and the beneficiary farmers who cultivate rubber in Moneragala inter monsoonal and thereby, shoulder to alleviate their poverty and depressions. This programme is implemented by the Programme Coordinator s office in Colombo, Mid-Country Sub-Programme office and Moneragala Sub- Programme office. The total cost of this programme amounts to US$ 28.0 million. The total cost has been financed by the US$ million which is the amount of loan obtained from the IFAD, US$ million which is the contribution of the government of Sri Lanka and US$ million which is the contribution of the participatory financial agencies, and in addition, US$ 1.01 million is to be made by the beneficiaries as labour or material contribution. Under the Mid-Country programme implemented in 08 Divisional Secretaries Divisions of the districts of Kandy, Nuwara Eliya and Kegalle in Mid-Country programme area, the agricultural development in the tea small holdings, rubber and other agricultural development in the Moneragala programme area and development and strengthening of the small scale growers and entrepreneurs under the implementing programmes are being carried out. Sum of US$ million has been allocated for the purpose. 3,700 hectares have been cultivated with rubber at the end of the year 2011 out of the target of 5,000 hectares rubber cultivation in Moneragala district. The remaining 1300 hectares are to be under taken during the years of 2012 and Tea planting has been completed in 56 hectares of the Mid-Country and tea replanting in 145 hectares is undertaken in various phases. Under this programme, the beneficiaries are provided with required plants, fertilizer and planting subsidies on the approved rates. 13

17 The following financial and physical progress has been achieved in the financial year 2011 under this programme. (a) (b) (c) (d) (e) The estimate approved for the year 2011 is Rs.476 million and the expenditure is Rs.372 million. Accordingly, a financial progress of 76% has been achieved. The targeted No. of entrepreneurs societies to be formed under the target of Mid-Country programme is 250. Arrangements had been made to form 60 entrepreneurs societies in the year 2011, and since 50 societies have been formed newly, the total No. of societies formed at the end of the year 2011 is 230. Accordingly, 92% progress has been achieved when compared with 250 societies which is the total target of the Mid-Country programme. The No. of societies for loans and savings formed through these entrepreneurs societies has increased up to 174. The No. of members of the entrepreneurs societies is 7829 of which male members are 4979 (64%) and female members are 2850 (36%). The increase in the number of members during the year 2011 is 23%. Accordingly, 87% progress has been achieved in the number of members of the Mid-Country entrepreneurs societies when compared with the total target. A number of 98 rural rubber development clusters have been formed newly representing 3378 beneficiaries in the Moneragala district. 125 roads with the distance of 20 km have been developed in the Divisional Secretaries Divisions of the Mid-Country Programme area and Rs.57 million has been incurred for the purpose. During the year 2011, 23 roads at the cost of Rs.30 million have been developed in the Moneragala District as well. In the year 2011, tea replanting in 50 hectares has been completed in the Mid-Country Programme area and Rs.8.2 million has been paid as subsidies. Rubber new planting in 676 hectares has been undertaken in Moneragala district and Rs.72.2 million has been paid as rubber planting subsidies during the year. 14

18 (f) Intercropping has been undertaken in the tea cultivations with 22,260 pepper plants, 9500 coffee plants and 9400 arecanut plants. Under this programme, 11,300 mandarin plants, 1500 banana plants, 8500 ginger seedlings, coconut plants and vanilla have also been cultivated in the home gardens in Mid-Country Programme area. Likewise, cocoa as an intercropping of the rubber cultivation has been cultivated in 54 hectares in Moneragala District. (g) (h) (i) (j) (k) 05 community drinking water projects at a cost of Rs.1.44 million have been developed in the Divisional Secretaries Divisions of Ganga Ihala Korale, Bulathkohupitiya and Kothmale in the Mid-Country Programme area. Contributions have been made to establish 45 commercial tea nurseries with a minimum capacity of 10,000 plants in the Mid-Country Programme area. 03 rural level processing centres have been established with the participation of 41 members selected and trained for production of value added goat milk. 164 goats have been distributed among 40 beneficiaries in the Divisional Secretaries Divisions of Ganga Ihala Korale, Doluwa, Uda Palatha Aranayaka, Bulathkohupitiya, for further encouragement of the production of goat milk. Contribution has been made to the development of poultry farming in the Mid-Country Programme area through the distribution of 4950 one month old chicks for backyard poultry farming. 60 units containing 6000 mushroom compost bags have been established for the production of mushroom aiming at the market and it is a special progress that a beneficiaries are able to earn an average monthly income of Rs.25,000 through the sale of their mushroom products. 15

19 4.1 Administration Division 4. Divisional Performance Basic activities such as institutional and administrative affairs of the Ministry of Plantation Industries, human resources management, direction to the local and foreign training courses and personnel development, activities related with public relations, supply management and taking actions in respect of the repairs and maintenance. Making the general public and institutions aware of the important activities carried out by the Ministry and the institutions coming under the Ministry, taking relevant actions in respect of the parliamentary questions, the functions of the Committee on public petitions, the Consultative Committee Meetings and the letters referred for the requirements of other Ministries, institutions and the general public and the requests of the people. Providing facilities required for implementation of the policy decisions made by the Ministry from time to time in line with the timely requirements and preparation of Cabinet Memorandums on the requirements and submission them to the Cabinet of Ministers. The activities relevant to the implementation of productive promotion programmes of the Ministry and the institutions coming under the Ministry are being carried out, and taking necessary actions for the promotion of productivity of the various divisions of the ministry, conducting awareness programmes on the productivity promotion for the staff and direction to the training programmes and performing the activities in respect of the Management Reforms Cells and Quality Circles for implementation of the proposals on reforms submitted by the Ministry of Public Management Reforms. Taking action in respect of the staff management of the institutions such as Sri Lanka Tea Board, Tea Research Institute of Sri Lanka, National Institute of Plantation Management, Kalubowitiyana Tea Factory Ltd, Tea Small Holdings Development Authority, Tea Shakthi Fund, Rubber 16

20 Development Department, Rubber Research Board of Sri Lanka and Thurusaviya Fund coming under the Ministry, taking action in respect of the Schemes of Recruitment and Promotion Schemes, taking necessary action to fill the vacancies in the staffs, staff welfare and human resources management, appointments, promotions, extension of services and retirements. All required coordination activities are carried out for continuation of institutional and administrative affairs of the institutions coming under the Ministry and the appointment of Chairmen and members to the Board of Directors of the said institutions, providing facilities to the main operational activities of the institutions, submission of Annual Reports and Audited Accounts in Parliament are also undertaken. Further, administrative affairs of the foreign funded Smallholder Plantations Entrepreneurship Development Programme are also being carried out. Coordination the activities in respect of the local and foreign trainings, seminars and scholarships of the institutions coming under the Ministry. Direction to local and foreign training courses and scholarships and taking necessary action to obtain approval of the Hon. Minister, Hon. Prime Minister and H.E. the President for the said purpose, coordination the activities in respect of the international seminars and conferences and taking necessary action to approve personal and official foreign leave. 4.2 Accounts Division i. The financial progress for the year 2011 is given in Annex 1. The financial progress is 73% of the net allocation. Since the funds relevant to the total estimated allocation were not released to the institutions coming under the Ministry by the General Treasury, the financial progress could not be achieved at an optimum level. ii. In year 2011, Rs.2.62 million has been provided to the officers of the Ministry as loans and advances within the approved limits of the Advance Account B for Public Officers. 17

21 iii. Since the total amount of imprest requested in releasing the imprest from the Treasury were not received, some purchases could not be made as per the Procurement Plan However, basic essential items could be purchased during the year. iv. Follow-up activities of the report of inventory survey in year 2010 were finalized. The inventory survey activities were completed as at and reports of the Board of Survey have been submitted by v. Answers have been sent for all 11 audit queries made in respect of the activities of the Ministry in year Auditor General s reports for year 2010 of the Smallholder Plantations Entrepreneurship Development Programme which comes under the purview of the Ministry have been submitted to the IFAD for necessary actions. vi. The Appropriation Account 2011 and the Advance Account B for Public Officers have been submitted to the Auditor General on vii.all duties assigned to the Accounts Division could be handled successfully. 4.3 Internal Audit Division I. Internal Audit Inquiries and Special Monitoring Activities (a) Smallholder Plantations Entrepreneurship Development Programme Sub office of Monaragala The distribution of rubber plants in the year 2010 and up to March 2011 by the Monaragala Sub office under the Smallholder Plantations Entrepreneurship Development Programme was audited. Sub office of Kandy Field inspections were conducted and audited the following projects initiated by the Kandy Sub office in December 2010 and January 2011 in the Divisional Secretaries Divisions of Ganga Ihala Korale and Uda Palatha in Kandy District and the Divisional Secretary s Division of Bulathkohupitiya in Kegalle District. 18

22 1. Mushroom farming. 2. Poultry farming. 3. Goat farming. Progress of the above projects is to be inspected in the year 2012 as well. (b) Tea Shakthi Fund A special audit inquiry was conducted in respect of the computer accounts system which was established in the year 2010 under the Tea Shakthi fund and later become defunct. (c) National Institute of Plantation Management Payments and settlements of Advances released by the National Institute of Plantation Management for various purposes in year 2011 and the maintenance of vehicles were audited. (d) Thurusaviya Fund A special audit inquiry was conducted on the expenditure incurred by the Thurusaviya Fund for Dayata Kirula National Exhibition in year 2011 and In addition, audit inquiries were conducted in respect of the other expenses incurred in the year (e) Kalubowitiyana Tea Factory Ltd. On a complaint made in respect of the irregularities occuring in receiving green leaf to the Kalubowitiyana Tea Factory, the process of receiving green leaf was inspected. (f) Tea Small Holdings Development Authority Preliminary inquiry was conducted in respect the complaints made on the informal appointment to the post of Deputy General Manager (Extension) of the Tea Small Holdings Development Authority. 19

23 II. Submission of recommendations on the courses of action to be taken to rectify the shortcomings pointed out in the reports issued by the Auditor General in respect of the Tea Shakthi Fund Recommendations have been made on the courses of action to be taken to study and rectify the shortcomings pointed out in the Auditor General s Reports issued by the Auditor General for the years of 2007, 2008 and 2009 in respect of the Tea Shakthi Fund. III. Holding of Audit and Management Committee Meetings During the year 2011, 04 Audit and Management Committee Meetings with the participation of the Chief Executive Officers, Chief Internal Auditors / Internal Auditors of the all institutions coming under the Ministry, Heads of the Financial Agencies and the Audit Superintendents of the Auditor General s Department were held. The activities of the Internal Audit Divisions of each institution were reviewed at the said meetings and in addition, conducting of Audit and Management Committee Meetings of such institutions and the progress of answering to the audit queries issued by the Auditor General was discussed extensively and the necessary instructions were issued. Following-up of the adoption of the instructions given thereat was also undertaken by this Division. IV. Conducting Inquiries under F.R. 104 Inquires have been conducted under F.R. 104 in respect of 02 vehicle accidents met in the year Development Division The following measures were taken by the Development Division in year 2011 to develop tea and rubber cultivations and also to develop related industries and value added products. i. In terms of the Cabinet Decision dated , further actions were taken to amend the Acts of all institutions coming under the 20

24 Ministry to meet the current needs. The all activities such as convening of the Committee appointed by the Cabinet of Ministers in this regard under the Chairmanship of the Secretary to the Ministry and with the participation of the Ministry of Finance and Planning, Ministry of Economic Development, Ministry of Technology and Researches, Ministry of Industries and Commerce and the representatives of the Central Bank, making observations and recommendations on the amendments to the Acts and facilitation were undertaken. ii. Participation at the Dayata Kirula National Development Exhibition held on February 2011 at Buttala, coordinating all institutions coming under the Ministry. iii. Action was also taken to provide policy guidelines for research and development activities carried out by the institutions and settle the issues arisen in that regard. iv. Special measures were taken to expand the rubber cultivation in non traditional areas. In this context, actions were taken to make policy decisions, execute them and facilitate to expand the rubber cultivation in Moneragala and Ampara Districts, conduct researches for determination of feasibility for rubber cultivation in Northern Province. v. Organization of preliminary activities necessary to the programme for development of access roads in the plantation sector to be implemented in the year 2012 with the collaboration of the Financial Commission and the Provincial council and facilitating the relevant decision making process. vi. Progress review of the all institutions and the foreign funded project coming under the Ministry of Plantation Industries and taking necessary steps to retain the performance at a higher level. vii. Updating of the web-site of the Ministry. viii.coordination with the international organizations on tea and rubber and coordination of the implementation of agreements entered into. 21

25 ix. Management of the impact on the plantation sector caused by the climatic changes. x. Providing the media the information on the development activities of the Ministry. 4.5 Planning Division The following activities were carried out during the year i. Formulation of the Action Plan of the Ministry for the year 2011 and submission it to the Ministry of Finance and Planning and the relevant institutions. ii. Preparation of quarterly progress reports and submission of them on time to the Budget Monitoring Department of the Ministry of Finance and Planning through the and Preparation of quarterly progress reports and submission of them to the relevant institutions including the Audit Divisions. iii. Organization of the Progress Review Meetings chaired by the Hon. Minister and submission of the decisions made thereat to the officers concerned and subsequently, preparation of progress reports and organization of discussions. iv. Submission of new budget proposals and project concept papers for the year 2011, to the National Planning Department. v. Preparation of the Performance Report relevant to the budget discussion of the Ministry of Plantation Industries held on 07 th December 2011 and presenting it in the Parliament. vi. Working together with the Ministry of Plan Implementation regularly in respect of the relevant awareness and reporting under the result based management process. vii. Preparation and submission of reports on the information pertaining to the progress of the plantation sector to the Annual Report 2011 of the Central Bank of Sri Lanka as per the required formats. viii. Coordination of the updating process of the five year Corporate Plan of the institutions for the year ix. Reporting the issues pertaining to the plantation sector from time to time for submission in the meetings of the District Secretaries. 22

26 x. Coordination of the development programmes such as Mahinda Chinthana, Divi Neguma. xi. xii. Coordination of the basic activities required for mapping of the tea and rubber lands using the Geographical Information Technology. Preparation of the Annual Report of the Ministry of Plantation Industries for the year Plantation Management Monitoring Division I In year 1992, 439 large scale estates managed by the Janatha Estates Development Board (JEDB) and Sri Lanka State Plantation Corporation (SLSPC) were vested with 23 Regional Plantation Companies and privatized. The ownership of these estates still remains with the JEDB and SLSPC and the management and the plantations of the estates have been handed over to the Regional Plantation Companies on 53 year basis. The Plantation Management Monitoring Division has been established for the management of these Regional Plantation Companies. II Functions of the Plantation Management Monitoring Division Monitoring of the Regional Plantation Companies and review of the progress. Monitoring of replanting and field development activities. Inspection of the factory modernization and human resources development. Looking into the matters such as prevention of soil erosion, application of fertilizer, conservation of water resources and water catchments and environmental conservation related with the estates. Inspection of the management irregularities in the estates and taking remedial measures for them. Monitoring of the sub-leasing undertaken by the plantation Companies. Making arrangements to release the lands leased out to the Regional Plantation Companies, for the common purposes. Monitoring of the forest management programmes and making necessary recommendations for timber felling on field inspections. 23

27 Collection of the lease rentals to be recovered from the Regional Plantation Companies to the government. Issuance of eviction orders to the unauthorized occupants in order to establish the State Lands Possession. III Performance of the Plantation Management Monitoring Division i. Identification of cultivable but uncultivated lands managed under the Regional Plantation Companies During the year 2011, a survey on cultivable but uncultivated lands owned by 20 Regional Plantation Companies was conducted with the contribution of the Plantation Monitoring Officers and the University students and collaboration of the officials of the Tea Research Institute, Rubber Research Institute and Rubber Development Department. Accordingly, 15,178 hectares have been identified as cultivable but uncultivated lands and the Hon. Minister handed over the relevant report to H.E. the President. Accordingly, a Budget Proposal 2012 was also presented. ii. Recovering of lease rentals from the Regional Plantation Companies The amount of lease rentals estimated to collect during the year was Rs.956 million of which Rs.826 million has been collected. The arrears of lease rentals to be recovered as at were Rs.556 million of which Rs.432 million has been recovered during the year. The amount of lease rentals to be recovered in the year 2011 was Rs.646 million of which Rs.394 million has been collected during the year. Accordingly, it was able to reduce the total arrears of lease rentals from Rs.556 million to Rs.376 million. The Regional Plantation Companies have given consent to pay as installments the outstanding lease rentals as at and accordingly, it is expected to recover all outstanding balances by 30 th June

28 IV Review of Financial Progress of the Regional Plantation Companies Proper studying and analysis of the quarterly and annual accounts statements of the Regional Plantation Companies and thereby, giving instructions to the Companies to rectify where necessary and arrangements have been made to carry out these activities more regularly in the year V. Field inspections and other activities on timber felling Field inspections on timber felling in 71 estates managed under 17 Regional Plantation Companies had been conducted in year 2011 and actions have been taken to release lands for common purposes. Likewise, 8 field inspections were conducted on the cases hearing at the Court in respect of the lands owned by the Plantation Companies. 4.7 Tea, Rubber & Coconut Estates (Control of Fragmentation) Board Although the Tea, Rubber & Coconut Estates (Control of Fragmentation) Act was passed in Parliament in year 1958, provisions were not made available for control of fragmentation of coconut lands. As a result, coconut estate owners and land sale agents undertake the fragmentation and sale of large scale coconut estates without any control, and it caused to decline in the coconut production and coconut based production. Further, various environment and social issues have arisen due to the above situation. Taking into consideration the above facts, the Control of Fragmentation Act No.02 of 1958 was amended by the Control of Fragmentation Act No.20 of Under the provisions of this Act, approval of the Control of Fragmentation Board should be obtained for transfer of the ownership or sub division of the tea and rubber estates more than 20 hectares and coconut lands more than 04 hectares. The Board of Directors reserves the authority to grant approval for fragmentation of these estates. Since approval of the Board should be obtained under the provisions of the Act in transferring of lands as a single unit even not resulting a fragmentation, approval of the Cabinet of Ministers has been obtained in year 2011 to amend the Act of Fragmentation relevant to Section 3, 5 and 8 (1) (b) having considered the requirement to transfer lands without delay and to minimize the difficulties faced by the people. 25

29 Tea, Rubber & Coconut Estates (Control of Fragmentation) Board has held 13 Board Meetings from to and the activities carried out during the said period are summarized below. Details of the applications forwarded to the Tea, Rubber & Coconut Estates (Control of Fragmentation) Board during the year No. of applications received in the year 2011 = 589 Total No. of applications forwarded to the Board of Directors together with the applications brought forward from the last year = 673 No. of applications forwarded to the Board of Directors as single units = 206 No. of applications forwarded to the Board of Directors for transfers within the family and total land demarcations = 467 Acres Roods Perches Total extent of lands approved for transfers within the family and other transfers 2, Total extent of lands approved as single units 11, Total 14,

30 Financial Progress in year 2011 Annex 1 1. Estimate of Expenditure Minister s Office Recu rrent capit al Administration and establishment services Recu rrent capit al Plantation Development programmes Recu rrent capital Plantation Development Institutions Recurren t capital Thurusaviya Fund Recurr ent capital Total 1. Estimated provision 2. Transfers and supplement ary provision under F.R Net provision 4. Expenditure 50,800 9,350 47,490 5,400 29, , , ,000 7,080 5,600 2,129,860 1,077 33, , ,134 51,877 43,329 43,529 4,684 29, , , ,000 7,080 5,600 2,157,994 51,478 40,927 41,328 4,123 29, , , ,534 6,965 4,822 1,567, Percentage of the expenditure 99% % 95% 88% 99% 68% 85% 51% 98% 86% 73% Rs. 000 Financing for the expenditure is given below. Financing of expenditure 11 - Domestic funds 12 - Foreign loans 17 - Domestic funds connected with foreign aids Rs. 000 Expenditure 1,244, ,000 28,133 Total 1,567, Incomes Lease rentals collected from Regional Plantation Companies Income to be received for year 2011 Rs. 000 Income Head Annual Estimate of Income Revised Estimate of Income Income received Percentage of income receipt , , , % Outstanding Incomes as at Rs. 000 Income Head Outstanding income as at Recoveries in year 2011 Percentage of recovering of outstanding incomes , , % 27

31 3. Advance Account B for Public OfficersRs. 000 Maximum limit of the expenditure Limits authorized by the Minimum limit of the receipt Maximum limit of debit balance Appropriation Act 6,600 3,200 28,000 Revised limits in the - 3,164 - year Actual Values as at end of the year 2,619 3,164 15,723 28