POTENTIAL OF ORGANIC TEA PRODUCTION IN SRI LANKA AS A MEASURE OF ENVIRONMENTAL MANAGEMENT IN UP COUNTRY

Abstract

Promotion of organic farming has been widely accepted as a panacea for emergingenvironmental problems such as land degradation and surface water pollution. Being anagricultural country Sri Lanka has large potential for organic industry. Tea itself contributes to13% of export earnings in Sri Lanka. Around 180,000 ha of land is presently under teacultivation. Conventional tea cultivation practice that use a massive amount of syntheticchemicals has raped the natural environment in the lip country and is reported to have affectedthe health of human beings and other living organisms. Considering these adverse effectsorganic tea cultivation has been introduced which uses zero level of inorganic chemicals.However financial profitability of organic tea cultivation has not been proven in the localcontext.

Therefore the objective of this study was to find 0'11 the financial profitability of organic teacultivation in Sri Lanka in comparison to conventional tea cultivation. The study was conductedusing data obtained from Needwood Estate, Haldummulla, Financial analysis was carried out tomeasure the profitability using both primary data through interviews with managerial persons ofestates and secondary data from TRI publications. Availability of institutional framework topromote the organic tea cultivation was also evaluated

Result of this analysis implies that the benefit cost ratio of conventional tea is 2.41 while thebenefit cost ratio of organic tea is 3.13. Hence financial profitability of organic tea cultivation ishigh in compared to conventional tea cultivation. Main reason for the higher profitability oforganic tea is due to higher price offered for organic [Ca.Therefore price sensitivity analysis wasundertaken to investigate the impact of price changes. Results show that the profitability oforganic tea is not so price sensitive and it changes only with a sharp price drop below 23% of thecurrent price.

The study found that the absence of Institutional framework to promote organic tea is one of theproblems for not improving organic tea production in Sri Lanka. Therefore it is recommended toestablish a separate organic product promotion unit within the Ministry of Environment tofacilitate promotion of organic production in the corntry including tea, Ministry of Plantation,Ministry of Agriculture, Ministry of Health and Ministry of Media should play an active role andwork jointly with Ministry of Environment for this. The Ministry of Foreign Affairs andMinistry of Trade should playa major role in exploring international market opportunities fororganic tea, which is the key factor for the successful organic tea industry in Sri Lanka