SRI LANAKAN’S COMPLAIN ABOUT HIGH COST OF LIVING

Today many Sri Lankans complain about the high “cost of living”. In this regard, everyone seems to think, “cost of living” is all about the “cost of services and commodities” that people incur in “living”. Well, in a way that is true. However, I would like to stretch that definition and understanding a little further, and argue that “cost of living” is more about the ability and financial strength that people process at a given time to meet those living costs. After all even if prices of commodities and services were rising, if our wages and incomes were also correspondingly rising to levels, which are, enough to meet those rising costs not be too adversely felt.

In most developed countries, the people’s average wages are sufficient to provide for food and drink in a fraction of around 20%, for housing about 25% for clothing 10% for education 10% for leisure and travel 10% for savings 15% and for other special interests. However, in Sri Lanka, the average lower middle class Sri Lankans spends almost 80 – 90% of their earnings on food, drink, and shelter, which leaves very little for them to spend on other essentials and to save for a rainy day.

In my view this issues cannot be dealt with by tinkering about with the selling prices of a few essential commodities or services only. The response should be a multi – pronged and integrated one. At the same time, it should be noted that the only long – term solution is the increasing of opportunities to people to enhance their income levels, and to boost their productivity levels. So it is clear that our economic activity should be clearly focused on these objectives at all times.

On the issue of attempting to deal with the rising cost of living we must now try to think of fresh initiatives instead of only traversing the same old beaten track of attempting to reduce commodity prices. To a certain extreme granting of selected subsidies and income support schemes for the poorest of the poor. In our country, we have a large percentage of very "poor people" and I believe that strategies that provide the poorest sections are strengthened to face the economic challenges of a liberalized economy. But we should not forget that producers too are consumers within a national economy. Therefore, we must remember that when producers are well off and economically stronger, the economic cycle gets healthier and consequently everyone will benefit in the long and medium term.

TEA INDUSTRY IN SRI LANKA

The tea plant was introduced into Sri Lanka (then Ceylon) in the year 1824 and more actively planted in 1839 it became established with a 19 acre field in the year 1867 by James Taylor who had the plantations in the Kandy District and did the manufacture of the leaves in the veranda of his of log cabin.

The planting expanded to 40 hectares and considered commercial product from then the land in tea expanded and by the year 1900 tea from Sri Lanka occupied a very special place and tea as a beverage occupied a place in western countries. By this time the extent of tea was 121,410 hectares continuing to increase and by the year 2000 it had reached to 195,000 hectares and kept on increasing.

Considering cost of production it became necessary to increase yields rather than increasing land extents only. Towards this end studies and experiments were conducted from 1930 and a disease resistant and high yielding clone was developed to be actively market in the year 1941. From then onwards replanting commenced with government subsidy to increase crop and thereby increase total quantity to be marketed.
Along with this development to increase the profitability of this industry the made product came to be known as the “Cleanest tea in the world.” in the year 1997 by ISO and, was accepted world over. by this marketing became more convenient.
The economy improved due to price segment and yield segment. In the 21st century tea became Sri Lanka’s number 1 foreign exchange earner competing with Tourism and Gem Industry. The industry has grown during the last few decades and contributing to country’s foreign exchange now faces greater competition from many of the new comers world over producing tea, however the competition is mainly met by the high Quality tea produced by the country.
The tea industry must be considered the largest employment-generating unit along with all its infrastructure components from growing to exporting. It is very clear that the industry plays a key role in its economy and indications are this can grow and hold for decades.
The world now looks at tea as a “Food”, it is therefore necessary that clean, healthier tea be produced. The sooner we get into claming that the Sri Lankan tea is produced to the highest standard of food processing and tending more towards "Organic Tea" will earn a good demand and Sri Lanka with its known Quality will be a leader in the world were our tea will be looked ati n the shelves of the supper markets. This is a further contribution towards the improvement of our economy.
The world is now looking not merely at Tea as “Black Tea” known for many years. It now looks for variations with improved technology in the manufacture. Sri Lanka has now moved into this field very actively to meet this. Some of the areas, in which this development has to take place, can be “Value Addition” in the form of Tea Bags, Packeted Tea, Instant Tea, Green Tea, Ready To Drink, Hot and Cold Soluble Tea, Flavored Tea, and "Organic Tea".
The Tea industry can look forward to a bright period when approached correctly with the various factors indicated above and not being pessimistic.
Cost of production can be a burden but can be controlled, having traced the history of tea I am confident that the future growth can be good provided Sri Lanka produces the best Quality tea meeting worlds standard as a “Food Drink”