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Annual Performance Report
2011
Ministry of Plantation Industries
No. 55/75, Vauxhall Lane, Colombo 02
Content
Page 1. Ministry of Plantation Industries
1.1 Introduction 1
1.2 Vision 1
1.3 Mission 1
1.4 Purposes 1
1.5 Objectives 2
1.6 Scope 2
1.7 Development activities carried out during the year 2011 2
2. Financial Review 4
3. Sectoral Review
3.1 Tea Sector 5
3.2 Rubber Sector 8
3.3 Oil Palm Sector 12
3.4 Foreign Funded Development Projects
3.4.1. Smallholder Plantations Entrepreneurship
Development Programme 13
4. Divisional Performance
4.1 Administration Division 16
4.2 Accounts Division 17
4.3 Internal Audit Division 18
4.4 Development Division 20
4.5 Planning Division 22
4.6 Plantation Management Monitoring Division 23
4.7 Tea, Rubber & Coconut Estates (Control of Fragmentation) 25
Annex 1 - Financial Progress in year 2011 27
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 29th
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 30.04.2010, 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 22.11.2010, 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.
2
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.
3
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
4
2. Financial Review
(Rs. Million)
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.
Institution
Capital
allocations
for year
2011
Recurrent
allocations
for year
2011
Capital
expenditure
up to 31st
December
2011
Recurrent
expenditure
up to 31st
December
2011
Capital
performance
%
Recurrent
performance
%
Ministry
52.21
125.10
47.37
122.26
91
98
Sri Lanka Tea
Board
150.0
200.0
-
122.0
-
61
Tea Research
Institute
150.0
245.0
82.15
233.91
55
95
Tea Small
Holdings
Development
Authority
200.0
225.0
190.47
201.12
95
89
Rubber
Development
Department
100.25
932.86
78.14
611.63
78
66
Rubber Research
Institute
100.0
195.0
31.9
183.1
32
94
Thurusaviya
Fund
5.6
7.08
4.82
6.96
86
98
National
Institute of
Plantation
Management
12.0
15.0
10.01
8.5
83
57
SPEnDP
476.0
-
323.13
-
68
-
Total 1246.06 1945.04 767.99 1489.48 62 77
5
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 2010.
The tea production in year 2011 was 327.5mn kg and it is 1% decrease as
against the year 2010. 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 (%)
60% 24%
16%
Low Grown
High Grown
Medium Grown
6
Accordingly, low grown tea production which was 196.2 mn kg in year 2010
has shown an increase of 0.5 mn kg (0.25%) in year 2011. During the year
under review, it was reported that the annual average price of all types of tea at
Colombo tea auction was Rs.359.89 per kg and the annual average export
price was Rs. 511.08 per kg. This is a 2% increase in the price as against year
2010.
Taking into account of 327.5 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 229.0 mn kg of tea in year 2011. 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
94.2
4.3
Tea Small Holding Sector 229
Total 327.5 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
2010. 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
7
Rs.1506.82 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 844.2 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 322.6
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 2010.
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 213.2 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 Quantity of Exports
(Mn.kg)
Russia
Iran
Syria
Iraq UAE
Turkey
Azerbaijan
Japan
Kuwait
Ukraine
49.1 30.9 28.8 22.6 21.8 19.2 12.0 11.6 9.1 8.1
Total 213.2
The most important activities carried out for development of the entire tea
industry during the year under review are given below.
8
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
9
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 2010. 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 Production
(Mt.)
Percentage of Production
(%)
Sheet
Sole Crepe
Scrap Crepe
Latex Crepe
T.S.R.
Centrifuge and
Other
60,699 3,384
1,332
59,933
7,981
24,869
38% 2%
1% 38%
5% 16%
158,198 100%
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 2011. Accordingly, though the average price for 01kg of
Ribbed Smoked Sheets No.01 (RSS 01) was Rs.592.15 at the Colombo
Rubber Auction in January 2011, a decline to Rs.380,63 was recorded by
December 2011. However, the average auction price for 01kg of Ribbed
Smoked Sheets was Rs.513.05 in the year and the sum of Rs.636 per kg which
was the highest price recorded in the year , was recorded in February 2011.
The farmers who engage in the rubber cultivation as well as the farmers in the
10
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 2011. 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 2011. 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.
11
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 2011. 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 2010.
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 2,015
31.8% 5.8% 49.1% 8.6% 4.7%
Total 42,606
100%
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.
12
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 3rd
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 2011.
Table 3.7: Expansion of the Oil Palm Cultivation
Plantation
Company
Extent under
mature
Extent under
immature
Total extent
Agalawatta
Watawala
Namunukula
Elpitiya
Kotagala
947
1875
1106
785
-
212
799
336
378
119
1159
2674
1442
1163
119
6,557
4713 1,844 6,557
13
3.4 Foreign Funded Development Projects
3.4.1 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$ 22.548 million which is the amount
of loan obtained from the IFAD, US$ 3.763 million which is the contribution of
the government of Sri Lanka and US$ 0.715 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$ 15.03
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 2013.
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.
14
The following financial and physical progress has been achieved in the financial
year 2011 under this programme.
(a) 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.
(b) 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.
(c) A number of 98 rural rubber development clusters have been formed
newly representing 3378 beneficiaries in the Moneragala district.
(d) 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.
(e) 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.
15
(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) 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.
(h) Contributions have been made to establish 45 commercial tea nurseries
with a minimum capacity of 10 ,000 plants in the Mid-Country Programme
area.
(i) 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.
(j) 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.
(k) 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.
16
4. Divisional Performance
4.1 Administration Division
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
17
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.
18
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 2011. 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 31.12.2011
and reports of the Board of Survey have been submitted by 31.03.2012.
v. Answers have been sent for all 11 audit queries made in respect of the
activities of the Ministry in year 2011. 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 28.03.2011.
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.
19
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 2011.
(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.
20
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 2011.
4.4 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 06.10.2010, further actions
were taken to amend the Acts of all institutions coming under the
21
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.
22
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 2011.
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 e-mail 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 - 2011 relevant to the budget
discussion of the Ministry of Plantation Industries held on 07th
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 2011.
ix. Reporting the issues pertaining to the plantation sector from time to time for
submission in the meetings of the District Secretaries.
23
x. Coordination of the development programmes such as Mahinda Chinthana,
Divi Neguma.
xi. Coordination of the basic activities required for mapping of the tea and rubber
lands using the Geographical Information Technology.
xii. Preparation of the Annual Report of the Ministry of Plantation Industries for
the year 2010.
4.6 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.
24
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 - 2011
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 01.01.2011 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 30.11.2009 and
accordingly, it is expected to recover all outstanding balances by 30th
June 2012.
25
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 2012.
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 2005. 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.
26
Tea, Rubber & Coconut Estates (Control of Fragmentation) Board has held 13 Board
Meetings from 01.01.2011 to 31.12.2011 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 2,770 01 17
Total extent of lands approved as single units 11,251 03 17
Total 14,022 00 34
27
Financial Progress in year 2011 Annex 1 1. Estimate of Expenditure
Rs.’000
Financing for the expenditure is given below.
Rs.’000
Financing of expenditure Expenditure
11 - Domestic funds
12 - Foreign loans
17 - Domestic funds connected with foreign aids
1,244,585
295,000
28,133
Total 1,567,718
2. 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
20.02.01.04 638,939 956,395 394,238 41.23%
Outstanding Incomes as at 31.12.2010 Rs.’000
Income Head Outstanding income as
at 31.12.2010
Recoveries in year
2011
Percentage of
recovering of
outstanding incomes
20.02.01.04 555,725 431,708 77.68%
135-1-1
Minister’s
Office
135-1-2
Administration
and
establishment
services
135-2-3
Plantation
Development
programmes
135-2-4
Plantation Development
Institutions
135-2-5
Thurusaviya Fund
Total
Recu
rrent
capit
al
Recu
rrent
capit
al
Recu
rrent
capital Recurren
t
capital Recurr
ent
capital
1. Estimated
provision
50,800 9,350 47,490 5,400 29,490 482,650 880,000 612,000 7,080 5,600 2,129,860
2. Transfers
and
supplement
ary
provision
under
F.R.66
1,077 33,979 -3961 -716 204 -2,449 0 0 0 0 28,134
3. Net
provision
51,877 43,329 43,529 4,684 29,694 480,201 880,000 612,000 7,080 5,600 2,157,994
4.
Expenditure
51,478 40,927 41,328 4,123 29,453 325,453 748,635 314,534 6,965 4,822 1,567,718
5. Percentage
of the
expenditure
99% 94.46%
95% 88% 99% 68% 85% 51% 98% 86% 73%
28
3. Advance Account “B” for Public OfficersRs.’000
Maximum limit of the
expenditure
Minimum limit of the
receipt
Maximum limit of
debit balance
Limits authorized by the
Appropriation Act 6,600 3,200 28,000
Revised limits in the
year
- 3,164 -
Actual Values as at end
of the year
2,619 3,164 15,723
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