Sri Lanka has a Small domestic market and resource base force, the economy highly depend on foreign trade, export and import. In 2008 export and import represented 25% and38% of the GDP respectively. Therefore, development of the economy is mostly depending on foreign trade, particularly exports. In 2008 our total export is US $ 8,137 million. Main export products are Tea, Rubber and Rubber products, Coconut and Coconut based products, Fruits and Vegetables, Spices, main export markets are U.S.A, U.K, Italy, India, Belgium, Germany, United Arab Emirates, Russian Federation, France and Japan.
Understanding importance of development of exports, to achieve the country’s economic development objectives, institutional infrastructure for development of exports has been established during the last two decades. At present it consists of number of institutions, some are sector specific and others are general. Sri Lanka Export Development Board is the premier national TPO. Sector specific institutions are Sri Lanka Tea Board, Coconut Marketing Board, and Department of Export Agriculture. In addition to that Chambers and Exporters’ Associations are also doing Trade Promotion activities.
Sri Lanka exports wide range of agricultural products such as fruits, nuts, vegetables, cereals, spices, medicinal herbs, floricultural products etc. In world scenario most agricultural products, raw materials are supplied by developing countries while processing and packaging industries are owned by developed countries. By this these countries could obtain higher profit. To get this achievement they have two economic advantages which the producing countries do not have. They are technological advantages and marketing advantages.
This has become a big challenge for many developing countries like Sri Lanka, as agriculture is the basis of sustainable economic development. Sri Lanka has to face this challenge due to lack of technological and marketing advantages. Due to high cost of machineries Sri Lanka is far away from modern technology. On the other hand we are not able to reach quality standards which are accepted by global market with our poor quality processing facilities.
When considering Sri Lankan Export agricultural crop sector, it is a very important sector in national income generation process. Through this crop products country invade lot of foreign markets (especially European countries) finding income. In here Sri Lankan products have to face two consider mainly,
• How to compete with other producing countries like India, Vietnam etc.
• How to penetrate consumer mind attractively
Quality certification and value addition are the potential opportunities to overcome these two problems. Through the quality certification foreign consumers tend to buy our products without hesitate. And also to maintain best quality for our products, quality certification is must. And also recent market trends towards the many value added commodities. There for have a great potential to tap global market through the value addition. Thus through the value addition and quality certification Sri Lankan export crop products can intercept considerable portion from the increasing demand in foreign markets defeating other competing countries.
Quality certification
Quality assurance, or QA for short, is the set of planned and systematic actions necessary to provide appropriate confidence that a product will satisfy the requirements for quality.
Quality assurance applies to all forms of products and services. These protocols introduced the rules: "fit for purpose" and "do it right the first time". It includes the regulation of the quality of raw materials, assemblies, products and components; services related to production; and management, production, and inspection processes to survive in the competitive market, and for which it is essential to satisfy the customer by providing products with zero defects.
This also leads to increased productivity, reduced quality cost and eventually increased sales and market profits.
Benefits of quality certification
• Internationally recognized scheme which incorporates a facility to identify international market.
• Provide consumers an assurance of safety, quality and reliability.
• Provide consumer confidence that products meet and continue to meet the relevant standards
Available quality certifications
1. Good Manufacturing Practices Certification (GMP)
SLSI operates a GMP Certification Scheme to the food industry and services based on the Sri Lanka Standard on Code of practice for general principles of food hygiene. In case where a Sri Lanka Standard on code of practice for the industry or service concerned is available, that specific standard is also considered for granting certification in addition to SLS standards. Regular post certification inspections will be arranged by the SLSI to assess the effectiveness of GM practices.
2. ISO 14001: 2004
(EMS – Environmental Management System)
ISO 14001 Environmental Management System certification is a part of the overall management system which includes organisational structure, planning activities, responsibilities, procedures, processes & resources for developing, implementing, achieving, reviewing & maintaining the environmental policy.The ISO 14000 Environmental Management Standards exist to help organisations minimise how their operations negatively affect the environment (cause adverse changes to air, water or land) and comply with applicable laws and regulations.ISO 14001 is the international specification for an environmental management system (EMS). It specifies requirements for establishing an environmental policy, determining environmental aspects and impacts of products/activities/services, planning environmental objectives and measurable targets, implementation and operation of programmes to meet objectives and targets, checking and corrective action, and management review.
3. ISO 9001: 2000
Quality Management System
ISO 9000 is a family of standards for quality management systems. ISO 9000 is maintained by ISO, the International Organization for Standardization and is administered by accreditation and certification bodies. Some of the requirements in ISO 9001 (which is one of the standards in the ISO 9000 family) include,
• a set of procedures that cover all key processes in the business
• monitoring processes to ensure they are effective
• keeping adequate records
• checking output for defects, with appropriate and corrective action where necessary
• regularly reviewing individual processes and the quality system itself for effectiveness
• facilitating continual improvement.
4. HACCP(Hazard Analysis at Critical Control Point)
The governments & association of industries in most developed countries has approved industry strand, which require strict management control for buying products as row form. Because of that when export the EAC products this certificate is most impotent so EAC products export as row form. HACCP quality certification evaluate the agro chemical usage such as pesticide, insecticide, weedicide & minimize the trace element level which adversely effect to human. Further they consider the proper harvesting, processing, packaging, storage, level of extraneous materials. If the EAC product has this certificate it has the high demand in global market.
5. SPS(Sanitary and Phytosaitory Standard)
This standard refers the quality of the processing of Export Agricultural Crops and the acceptable strand in packaging. Further it refers the minimum or no usage of agro chemical. If the EAC product has this SPS certificate it has the good demand in global market.
6. Sri Lanka Standards (SLS)
Sri Lanka Standards Institution (SLSI) is the National Standards Body of Sri Lanka, established under the Bureau of Ceylon Standards Act No. 38 of 1964. The institution provides training on standardization and quality management for personnel in the industry with a view to impart the knowledge required for producing good quality products and services. The standards prepared by SLSI are mostly for products and processes. They describe the officially recognized levels of quality, safety requirements, durability, and performance requirements of products and services that are appropriate for the Sri Lanka market. After the certification by SLSI grant to use the SLS mark on the product label.
Value addition
"Value added" means adding value to a raw product by taking it to, at least, the next stage of production.Value addition is an most important area in the development of the export agriculture industry due to the potential of employment generation and increasing forign exchange earning.
The value addition helps to decrease the post harvest losses in EAC. When the production of value added products from the row forms the losses are minimum due to the long storage ability of that product.In addition the value addition helps to increase the demand in global market.Further value added products can be sold higher price than row form.To take advantage of value-added opportunities, one must know and understand customers. What consumer segments might want your product? What are the benefits desired by these potential customers? What criteria are they looking for when purchasing?.
Any business enterprise can be thought of as a value chain. Each activity that is performed should add value to the product. To do this, one must meticulously control the activities at each step in the value chain: procurement of inputs; converting inputs into products; marketing and sales; supply chain logistics; and customer service activities. A new value-added business should focus on the product's uniqueness. The uniqueness of your product or service is what ultimately attracts customers.
however, the sector is facing the following issues and challenges in this area
1) The main issue is the regular supply of export agriculture products in the country. The amount is also small so that the advantage of economy of scale is lost for investors in value addition.
2) New technology for value addition is seriously lacking in the country.
3) Cost of production is high.
In addition to that, by considering available competition in the global market, further processing is needed to produce value added products to tap the optimal potential in global market.Government intervention to solve this problem is very much needed. Because value addition plays an important role in the global market
Some of Sri Lankan Value-Added Export Agricultural Products
Vanilla
• Vanilla flavored tea,
• Vanilla paste,
• Vanilla sugar,
• Vanilla bee honey,
• Organic vanilla beans,
• Vanilla virgin coconut oil
Cocoa
• Cocoa butter
• Cocoa powder
• Cocoa liquor
Cinnamon
• Cinnamon bark oil
• Cinnamon leaf oil
• Cinnamon root oil
Tea
• Flavored tea
• Tea bags
• Tea liquor
• Tea gift boxes
Coconut
• Desiccated coconut
• Coconut cream
• Virgin coconut oil
References
• www.lankaemb-egypt.com/SriLanka/products.htm
• www.srilankabusiness.com/trade_info/srilankaproduct/coconut.htm
• www.lankanewspapers.com/news/2009/5/43852.html
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