By Feizal Samath
COLOMBO, Nov 13 2000 (IPS)

Three years ago, things were looking up for Batuwatagamage Chaminda. The Sri Lankan tea farmer was getting attractive prices for the produce of his one-hectare plot in the southern region of the world’s biggest tea-exporting nation.

But Chaminda is now in trouble as cheap tea imports threaten the livelihood of thousands of small tea farmers like him. Nearly 60 percent of Sri Lankan tea is produced on small farms of between one-fourth and one hectare in size.

Most of these are located in the south of the Indian Ocean island nation. The rest of the production is on large estates, owned by big business houses.

“That really hit us and our families. The crisis is so bad that the local tea factory to which we supplied our tea leaf, has shut down due to mounting losses,” he says.

About 20,000 Sri Lankan tea farmers and tea factory owners are said to have been hit by the influx of foreign tea into the country in the past two years.

The government says it has allowed the import of only a small quality of special, high-grade tea for blending purposes and re-export.

Sri Lankan tea farmers and factory owners say they do not object to the import of high quality tea for blending with local tea. But they complain that the permission is being misused to import large quantities of cheaper grade tea, which is hurting local producers.

The beverage is now being imported from China, Vietnam, Indonesia, India and Papua New Guinea. However, the state-run Tea Board’s officials deny reports of cheap tea imports and insist that only special, high- grade tea is being allowed in for blending purposes.

The worst affected are 36 factories that produce a range of teas known as ‘CTCs’ (cut, twisted and curled). The price of this type crashed in May 1998 from 200 rupees (about 2.5 U.S. dollars) to 80 rupees per kg, and has not recovered since. Several CTC factories have been forced to shut down.

Lokuhewage Jayantha, a 30-year old tea farmer in the village of Mathaka near the southern town of Elpitiya, too has seen his income plunge sharply in recent years.

“When we sold to CTC factories, we got a good price of 25 rupees per kg (0.32 dollars) and over, while we are now selling to other factories for 20 rupees per kg or less. The CTC factories also gave stiff competition to other factories in the area,” he told IPS on telephone from his village.

Local tea industry leader Ratna Gamage says the imports have driven his business to bankruptcy. “Our machines are not working, 19 factories have been closed. We have been bankrupt for the past few years,” says Gamage, chairman of the CTC Tea Factories Association.

Gamage, who is leading a two-year-old campaign by the local tea industry against the cheap tea imports, is now taking the protest outside the country.

The 33-year-old, U.S.-trained economist was Monday due to lead a group of five Sri Lankan tea producers and rice farmers to the United States to stage a hunger protest before the World Bank and International Monetary Fund (IMF).

“We are desperate because the government is not taking action to alleviate our problems,” says Gamage, who also chairs the Association for the Protection of Natural Resources, which represents farmers of all food crops in Sri Lanka.

“We want to protest in front of the World Bank and the IMF offices, as it has to do with imports and globalisation. I hope the protest would affect foreign funding to Sri Lanka and force the government to help us,” the tea producer told IPS.

Gamage and a group of Sri Lankan tea producers were about to hold a similar protest last year outside the World Bank office in Washington, but called it off after assurances from the Sri Lankan government.

President Chandrika Kumaratunga, Deputy Finance Minister Gamini Lakshman Peiris and Central Bank Governor Amarananda Jayawardenem, who were then in Washingon, met the tea producers in the World Bank office and persuaded them to call off the protest.

The tea producers have now been joined by Sri Lanka’s rice farmers who are angry with the government’s decision to allow import of rice. Cheap rice imports are blamed for the steep slide in the market price of the cereal, pushing thousands of small paddy farmers into heavy debt.

Among those accompanying Gamage to Washington is paddy farmer G.G. Haramanis. The 75-year-old rice farmer was in the news in August when he led a group of elderly women, men and Buddhist monks, in a six-day hunger protest in the north-central village of Minneriya.

Their protest was called off after assurances by Prime Minister Ratnasiri Wickremanayake that government agencies would buy paddy at higher prices. However, Haramanis accuses the government of not keeping its word.

This is the first time Haramanis is travelling abroad. “We will rather die in Washington than stop our struggle,” he says.

Tea producer Gamage laments that the government chose to ignore a Supreme Court order in October that banned all tea imports, excluding special high grades. The court ruled on a petition by Gamage.

“If the government is not even listening to the Supreme Court, what do we do?” he asks.

Most of Sri Lankan tea grown in the south of the country, is for the Gulf nations where buyers prefer a particular brand from the country’s southern hilly areas.

In the past two decades, the government has offered incentives and land to southern residents to grow tea. This has led to a shift in production from the large, British-run plantations to small tea farms.

In the late 1980s, the government encouraged investment in CTC factories with soft loans to producers like Gamage, to meet the growing demand for this type of tea in the Middle East.

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