GREEN ECONOMICS

Rough note from a botanist’s diary. That is what one may mistake the list of brand new state ministerial portfolios to be.

There are ministers with responsibility for seventeen types of trees, palms and plants – namely betel, cashew, chilly, cinnamon, clove, coconut, kitul, maize, onion, paddy, palmyra, pepper, potato, rattan, rubber, sugarcane and tea. Their responsibilities aren’t related to the environment; we have a separate Ministry of Environment. Each is responsible for the economic value.    

Agriculture’s contribution to Sri Lanka’s economy has been dipping in the last few decades. Agri sector contribution has dropped from over 50% at independence, 36% in the 1960’s to a little less than 8% now. The sectors annual growth is marginal. Last year it was only 0.6%. Contribution to the economy by agriculture’s sub-sectors, we generally consider important, are also low. Rice contributed only 0.7% of GDP. Vegetables did only 0.6%. Tea and coconut, key commercial crops once, contributed only 0.7% each the same year.

With such numbers, it is great to see the state giving importance to flora that has a sub decimal economic value, even with nearly one out of every three in Sri Lankan workforce depend either directly or indirectly on agriculture. In that backdrop, it would be interesting to consider the economics of these 17 trees, palms and plants. Each has its own story. This is an attempt to explore five selected species of flora. The selections explore ones that may appear trivial. Together they may form an interesting tale.

Areca nut or puvak (Areca Catechu)

Two centuries ago areca nuts were then Ceylon’s fourth largest export, following coffee, coconuts and cinnamon. In 1840 Ceylon exported £12,700 worth of areca nuts – or 4% of all exports. (The other key exports of the same year were coffee £197,400, coconut £29,300, cinnamon £28,800 and – another surprise – arrack £3,200) This was reported by J. W. Bennett of the Ceylon Civil Service in his book ‘Ceylon and its Capabilities’ (1843). From a commercial viewpoint, Bennett writes, the areca palm has been next in value to the coconut. The author highlights two major uses, then. One, as an ingredient of what we call ‘bulat-vita’ (‘Paan’ in India and Bangladesh). In both India and Sri Lanka, the original custom of the royalty chewing areca nut with betel leaf had spread among the masses.

The second is its use for making dyes. The bulk of the exports to Asia may have been for the latter. We’re discussing the market environment 180 years after. Do the same opportunities still exist? Perhaps. Despite being frowned upon by governments chewing betel has, since then, become common in other Asian cultures such as Taiwan, China (some provinces only) and Vietnam. This is in addition to its medicinal applications. The global annual production of areca nuts is nearly 1.5 million Mt, with India contributing more than half. Sri Lanka now is neither a top producer nor a top exporter, but that may change.

Black Pepper or Gam-miris (Piper Nigrum)

Every western breakfast table, even if other meals are ignored, has two shakers, one of which is for pepper. Salt and pepper as table condiment date back to seventeenth-century French cuisine, which considered black pepper to be the only spice that did not dominate the true taste of food. This per se is adequate to estimate the global market size for the spice, said to be originally from nearby Kerala. One source puts it at $4 billion a year.

Others estimate the global annual consumption of black pepper to be somewhere around 0.75 billion to one billion metric tonnes. Sri Lanka produces about 30,000 metric tonnes – a mere 3-4% of estimated global demand. Vietnam is the world largest producer and manufacturer with a 30% market share. Other major producers are Indonesia, India and Brazil. Peppercorns are also one of the world’s most widely traded spices, accounting for 20% of the spice trade.

Are we doing our best? The last agriculture census identified 6 million scattered pepper trees island-wide – around 40,000 hectares of cultivation (average production 5 kg per tree per year). Sri Lankan pepper manufacturers mainly produce black pepper and white pepper from their harvest says an Export Development Board (EDB) blog. They are the products with the least value addition.

Black pepper requires only sun-drying while the white variety requires additional processing to remove fruits outer layer. Pepper oil and pepper sauce are two other opportunities at the global level. Time to focus on these. More the value addition better will be the opportunities.

Clove or Karabu-neti (Syzygium Aromaticum)

We know they originate from an Indonesian island, but don’t know when they were first planted in Sri Lanka. It may have been the Arabs who brought them to Sri Lanka. They traded clove in the Indian Ocean during the Middle Ages until the Portuguese took over in the 15th century. Today the global clove market is largely dominated by Indonesia which produces 75% of the global demand with an aggregate annual production of 180 million Mt. Sri Lanka produces about 3% of demand, and is fourth in the list. Madagascar is second on the list with a 12% share. Tanzania, Comoros and Kenya are relatively small producers, just like us.

Is there a developing story here? Yes. Clove is used widely for many purposes. It’s popular in Asian, African, Mediterranean, and Middle Eastern cuisine, lending flavour to meats, curries, and marinades. It’s used to add aroma and flavour to hot beverages, often combined with other ingredients such as lemon and sugar.

Clove cigarettes are popular in some countries. Clove oil containing a chemical called Eugenol is effective for relieving toothaches and is used widely with toothpaste. It is also used in the manufacture of some mosquito repellents. Clove oil is also used in aromatherapy. Sri Lanka is yet to explore many of these uses. Sri Lankan Clove, according to EDB blog, is notably richer in oil than the clove varieties produced elsewhere in the world. Surely we have a long way to go.

Rubber (Hevea Brasiliensis)

This crop was introduced to the island in 1867. Henarathgoda Botanical Gardens, till recently, had the first tree planted. Its significance was recognized even during the British occupation when stamps depicting the sketch of a rubber trapper with those of Kings George V and George VI were popular. The story of rubber appears here not just for its historical

 

Agriculture’s contribution to Sri Lanka’s economy has been dipping in the last few decades. Agri sector contribution has dropped from over 50% at independence, 36% in the 1960’s to a little less than 8% now.

importance. More interesting is the fact that Sri Lanka appears to have some strategy for this product’s development. $ 4.4 billion is the target. That is where EDB is we want rubber products exports to be in 2024 from its current about $1 billion, according to the Export Development Board. An industry can’t grow four or five fold in four years – despite Sri Lanka’s global reputation for the quality of solid tyres produced from Sri Lankan rubber. So what could be our strategy for natural rubber, in the backdrop of the market domination by synthetic rubber by 2:1? Sri Lanka’s share from all 25 million Mt rubber produced

annually (natural and synthetic) has varied between 100 to 150,000 Mt during the last few years. So even in a good year, we don’t have a 1% market share from the entire market for rubber (including synthetic) or 2% of the natural rubber market.

On the other hand, rubber cultivation, in terms of land use is declining. It has plunged to 137,000 hectares from over 200,000 hectares in the 80’s. With declining production it’s difficult to think raw rubber production can expand. However, rubber products, like tyres, may grow in their contribution to exports.

Asian Palmyra or Panai Maram/Tal (Borassus Flabellifer)

Palmyra to North is what coconut is to the South. That was what we learnt at school. Of the estimated 10 million-plus Palmyra trees in Sri Lanka, around 90% are found in the districts of Jaffna, Mannar and Kilinochchi. The tree is part of Sri Lankan Tamil culture in the North with it’s leaves used for fencing, roofing and handicrafts, timber for construction, fibre for rope; and sap for drinking. Palmyra toddy in the North is as popular as coconut toddy in the South. The story of Palmyra is different from the rest of the stories here as the focus of the former is the local market. Often Palmyra is intermingled with Kitul (Fishtail Palms). Figures for these rarely appear in agriculture statistics.

Another resemblance between the two are the legal restrictions on felling these two trees. This is ostensibly to discourage the act, but in turn, but discourage planting the same too. If we were to see an improvement in cultivation certainly such laws should be appropriately relaxed. Several economic factors underlie the above agriculture crops. Their markets, either local or international are limited. Our own share in such markets is small. In almost all these crops the market share ranges between 1 – 4%. Growing agricultural crops, for export as commodities, without value addition limits potential.

How successful can that approach be? In all categories above shouldn’t we first think about value addition? These are questions the new state ministers must ponder. Not that it would be impossible, but improved production under the same circumstance right now has nothing to offer stakeholders. So while there may appear to be opportunities, we may have to work both harder and smarter to exploit them. But only with if that results in value addition. Without that, things will remain the same.