Need to diversify exports

History records the arrival of foreign traders in Ceylon in search of world famous spices and gems, thus proving that among Sri Lanka’s earliest exports were spices.

Cinnamon, cloves, cardamoms, pepper, nutmeg and mace were spices that Ceylon was famous for enticing world’s leading traders to visit our shores. The picture today is very different. While gems are still an important export from Sri Lanka, spices are no longer among the major export items from Sri Lanka.

An analysis of export statistics of Sri Lanka would indicate that Sri Lanka’s export base is not sufficiently diversified. While terms such as ‘Export or Perish’ were nice slogans, what was needed more was to expand the basket of goods available for export by expanding and diversifying the production base. Although export promotion is of importance, equal emphasis should have been given on diversifying more for export.

The importance given to spices, coffee, cocoa, etc., could be seen from the name given in the past to the department which catered to improving the production and quality of such valuable crops: Department of Minor Export Crops. Crops which had been known as major export crops historically were turned into minor export crops!

The department’s name is now more appropriately known as the Department of Export Agriculture and the department has various programmes to expand the production of these crops. Yet,most of these spices continue to be home garden or small holder crops.

Once famed for quality essential oils from lemon grass, cloves, cinnamon, etc., Sri Lanka’s exports of these products have today become negligible. These are high priced export commodities providing particularly the rural sector with a living.

Sri Lanka was also known for the high quality cocoa which was introduced to the country in the 19th century. Today, the local production cannot even meet increasing local demand. While cocoa is still mainly a small holders’ crop with a few large plantations, Asian countries such as Malaysia and Indonesia are growing large areas with government assistance, because they are aware that the global demand for cocoa keeps on expanding.

An area where Sri Lanka can find a specialised market at attractive prices is in organic cocoa. I Organic cocoa fetches higher prices than conventional cocoa due to the cost of fulfilling organic cocoa production requirements and certification fees paid to certifying bodies.

India and Sri Lanka are countries producing organic cocoa, but whether Sri Lanka has capitalised on the demand for organic cocoa by growing more is not known. The increasing demand for organic cocoa with the increasing demand for chocolate based food items will continue to grow and create a market waiting to be exploited.

Coffee is yet again a quality product exported from Sri Lanka where exports have dwindled.

All the above mentioned products featured in our export basket in the past. A country blessed by Mother Nature abundantly needs to utilise these resources prudently and effectively. Countries which have become major exporters of spices, cocoa, coffee, etc., have earned their place in world markets because their governments gave these products the required recognition and assistance.

Delegating the task to one government department is not enough to bring certain products back in to major export items. The prominence given by governments of the day to other major agricultural products must be given to these products as well.

Before stressing on export promotion, expanding production of these crops must be stressed upon. Small holders must be recognised and encouraged to undertake proper production and harvesting methods. Exporters and exporters associations must be encouraged and recognised for the important role they play in this chain.

The government must take on the national role of creating national awareness of the importance of these products so that these products once again will enter the export basket in substantial quantities.

(Manel de Silva holds an Honours Degree in Political Science from the University of Ceylon, Peradeniya and has engaged in professional training in Commercial Diplomacy at ITC and GATT. She has served as a trade diplomat in several Sri Lankan Missions overseas and was the first female Head of the Department of Commerce as Director General of Commerce.)