I. ROLE OF TEA IN DEVELOPMENT IN SRI LANKA
D. Degree to which environmental issues are reflected in sector policy
5. Policy on aid and assistance programmes for plantation sector reform
The government policy on plantation sector reform, particularly in relation to the tea sector, is to improve productivity vertically rather than horizontally. In other words, the strategy is to improve the productivity of existing tea plantation land rather than increase the extent of land under cultivation. It is also intended to enhance labour productivity through improved welfare and other measures.
To enable that objective to be achieved, a Plantation Sector Reform Project is being implemented with financial assistance from the Asian Development Bank (ADB) amounting to US$ 60 million. The objective of the project is to provide long-term loans and grants to privatized plantation companies so that they can improve environmental conditions in their project areas, increase productivity of the land and maintain the competitive advantage of the tree crop industry. Implementation of the five-year project began in 1996. It is also expected to be co-financed by the Overseas Economic Cooperation Fund (OECF) of Japan.
Specific measures have been adopted for improving environmental conditions on the plantations. Those measures, which have a direct bearing on increasing the productivity of the sector, are discussed in chapter IV.