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Serving Sri Lanka

This web log is a news and views blog. The primary aim is to provide an avenue for the expression and collection of ideas on sustainable, fair, and just, grassroot level development. Some of the topics that the blog will specifically address are: poverty reduction, rural development, educational issues, social empowerment, post-Tsunami relief and reconstruction, livelihood development, environmental conservation and bio-diversity. 

Saturday, January 07, 2006

Value of economic development thru’ industry nurturing and consultative process

Daily Mirror: 28/12/2005" Redefining the role of banking by Lalith Perera

Mr. John started his career at the Ceylon Tobacco Company (CTC) – Kandy Leaf Division in the early 70’s as a Field Overseer. After working as a trainee Field Overseer in very remote villages like Villachchiya (25 miles off Anuradhapura) and Kahatagasigiliya), he was sent to Hanwella CTC Training Centre – Madugoda for an advanced comprehensive residential training programme on tobacco nursery stage to land preparation, soil conservation and protection of vegetation, replanting, fertilizing, spraying of insecticides, harvesting, curing, grading of tobacco and selling back to the company (CTC buy-back operation) spanning about 9 months. John passed out and was posted first as a Field Instructor.

His responsibilities were to manage tobacco cultivators (called tobacco out growers) about 50-75 numbers of whom were already registered with the company depots in respective areas. About 50% roughly, owned mini and/or large tobacco curing barns. The ultimate purpose of producing tobacco cured leaves was for the manufacture of cigarettes of different varieties by the Ceylon Tobacco Company Production Division in Colombo.

It was a condition that the company called CTC depot was to issue the registered tobacco growers with tobacco seeds; where CTC had their own tobacco nurseries and produced quality varieties of seeds or imported, fertilizer, and offered advice and arranged bank loans through the area local bank. The amount loaned was determined by the extent they cultivated and the forecast extent.

The field instructor’s job functions and responsibilities were to inspect cultivable lands extent, approve suitable sites, plan for soil protection/conservation of land from soil erosion, re-forestation (lands where trees were cut, were re-planted with ipil –ipil) and af-forestation.

Before the tobacco cultivation season starts, field instructors have to draw a comprehensive area cultivation plan which consists of nursery stage, transplanting, weeding, fertilizing and pruning, topping and green leaf harvesting & quantity, planned cured leaf quantity, grading, leaf marketing stage (company buy- back agreement and procedure), soil conservation, reforesting and af-foresting stages.

Under the company agreement (between the CTC and grower-barn owner) is concerned, there were very important stages such as provision of tobacco seeds to start his nursery, fertilizers, and chemicals: insecticides and pesticides, and a tie-up with a local bank to provide cultivation loans to growers who opt for / need such loans. The company – grower agreement and another agreement with the bank were also signed.

This arrangement was done by the company and all CTC registered growers didn’t obtain loans. The provision of all materials were carried out on a planned basis and the bank loans were released purely on condition that grower followed a strict tobacco cultivation procedure.

The field instructors were responsible for each sector/area; to name a few Villachchiya, Kahatagasdegiliya, Madatugama, Mailapane, Rikillagakada and Galkulama, where tobacco plantations were carried out, had to issue a company chit where at each stage the farmer used to go to the CTC depot with a stores facility and collect their materials.

After harvesting green leaf curing stage starts and goes for about 4-5 days. Once the barn is set fire the field staff and the barn owners worked around the clock as if anything goes wrong the entire leaf stock will get burnt. The cured leaf is unloaded and left for cooling sorting/grading starts.

The company guarantees to buy-back cured leaf and recover the cost of fertilizer, seeds and the bank loans. Most upcountry cultivation was carried out on hilly terrain and harvesting, stacking green leaves in the barns in a systematic manner (there were no electrified barns then) and curing by maintaining the different and right temperature levels to ensure golden colour leaves – a quality standard of tobacco being produced by the barn owners which is the No 1 grade.

There were then about 7-8 grades: grade 1,2,3 basically had good pricing and the last grade was sweepings-called THOOL and used in manufacturing of cigars. The difficulty faced by the field officer was that some of the registered tobacco growers obtaining all materials and loans used to sell their cured leaf to outsiders (third parties).

There is one essential part in nurturing and consultative process where cross-selling (in banking). Tobacco operation crop cultivation also use cross-selling by way of ideas, advise, instructions, assistance and further more after the crop is finished when grower makes profits we advise them to open bank accounts, fixed deposits, buy a truck for tobacco transportation, put up an additional mini barn, re-built there tobacco sheds etc and repair there old barns.

This kind well managed and controlled operation the company used achieve 100% crop targets, 100% recovery settlement of loans and growers used to making good profits of their during tobacco cultivation season.

John calls this is a solid example of any banker to familiarize micro, small, medium and large scale (MSM&L) business planning, monitoring and controlling. Also in terms banking terminology this is exactly the right example of Business Nurturing and Consultative Process of Micro, Small, Medium and Large Industries in Sri Lanka.

There is one very important aspect in nurturing and consultative process where cross-selling (in banking). Tobacco crop cultivation also use cross-selling by way of ideas, advise, instructions, assistance and further more after the crop is finished when grower made profits we used advise them to open bank accounts, fixed deposits, buy a truck for tobacco for transportation, put up an additional mini barn, re-built there tobacco sheds etc and repair there old barns.

Mind you, as far back 35 years ago, the Ceylon Tobacco Company (Large Multinational) initiated this nature of excellent MSM&L Agri-based, industry-partnership related, forward integrated and market-economy development program in this country.

The writer could be reached for an open invitation to any bank or financial institution to respond this article attention: Lalith Perera, shalindrip@stlnet.lk

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