Sri Lankan Spices Can Double Per Capita Incomes in 5 Years

13th December 2009, www.sundaytimes.lk

Sri Lanka’s Treasury Secretary predicts that Sri Lanka can increase per capita incomes to US$ 4,000 – US$ 5,000, over the next five years, by value adding thrust industries like Sri Lankan spices.

“The per capita income is now around US$ 2,200. Five years ago this was around US$ 1,000. So in five years we have doubled our per capita income. My prediction is, that within the next five years we will cross the US$ 4,000 – US$ 5,000 per capital income mark,” said the Secretary to the Treasury, Dr P B Jayasundara, speaking at the AGM of the Spice Council on Tuesday.

The agriculture sector like spices is expected to benefit directly from the end of war and the expanses of lands released for agricultural purposes in the north and east. “The President’s development strategy has brought new space to agriculture. A substantial area for agriculture disappeared because of 30 years of war. We did not have the production space in the north and the east. The country now has a substantial area of land and sea brought into the production process,” said Dr Jayasundara.

On top of opening up more land area for agriculture and other industries, the government’s development plans are also expected to boost private sector growth by enhancing connectivity. “The next 10 years will be a period of infrastructure, to link the provinces to allow us to move to more rapid development. The government vision is to establish Sri Lanka as a really solid middle income county by 2010,” said Dr Jayasundara.

However, the agriculture sector was told to go for a “mindset change” to contribute to post-war per capita growth. “In agriculture it is mostly a trading mindset still. The message now is ‘let’s stop sending anything out in primary product form,” said Dr Jayasundara.

At this point most of Sri Lanka’s spices leave the country in primary form. However, Sri Lankan spices are noted for their potential in pharmaceutical and other value added areas. The Treasury Secretary said value added agricultural exports have the potential to improve the trade balance by increasing export incomes and reducing agricultural and food imports.

Spicing up exports

Meanwhile, the Spice Council is to declare 2010 the year of Value Addition in the Spice Industry of Sri Lanka, to drum up awareness and support for the sector. Sri Lanka’s spice traders say they are now looking for government support to increase production of Sri Lankan spices and to add value to exports.
“Today we spend around Rs 2.2 billion on importing chilli. As much as 70% of the chilli consumed, is imported. But we can very easily grow it here. So we are going to ask the government for support to grow 1,000 acres of chilli in 10 areas of the country, including the north and east. We have already started one project in Trincomalee,” said the Chairman of the Spice Council, D A Perera.

The spice traders are also hoping to expand output of other spices like cinnamon and pepper and to add value to these products. The traders say there is global demand but Sri Lanka has not been able to supply the demand.

“Sri Lanka produces the word’s best pepper. The active ingredient in pepper is called ‘piperine.’ In pepper from other countries, like India, the piperine content is around 6%. Sri Lankan pepper has 12% piperine content. This is why we have the best pepper in the world, but we only produce around 2.5% of world pepper output,” explained Mr Perera.

The spice traders are hoping to negotiate a deal with the government to get assistance to add value to spices like pepper. The traders are also asking for support to expand cultivation into the north and east of Sri Lanka and for technological innovations.

Image: Dr. P.B. Jayasundera speaking at the event.