Ceylon became independent on 4 February 1948. At first, the impact of this momentous event on the tea industry was negligible. Difficulties arose concerning the citizenship of Indian workers living on the plantations, but this did not greatly affect output. Indeed, Ceylon had, by 1962, become the biggest tea exporter in the world. Beyond the estate boundaries, however, a whirlwind of social change was gathering strength. The first decade and a half of independence were turbulent, and by the time they were over, the country was a very different place from the one it had been before.
In 1970, a new government was voted into office on a platform that was both nationalist and socialist. It lost no time in implementing the changes it had promised. On 22 April 1972, a new Republican constitution was signed into law, and the old Dominion of Ceylon became the new Democratic Socialist Republic of Sri Lanka. The change of name created problems for the country’s biggest international ‘brand’; over considerable opposition from nationalists in and out of government, the industry decided to stick with the old name, Ceylon Tea, for marketing purposes. The decision was to prove sound, and remains in force to this day.
Four months after the creation of the new Republic, the government introduced a land reform law that limited privately-owned (though not corporate) landholdings to fifty acres, or just over twenty hectares. Proprietors affected by this were mainly Sri Lankan, but the government had already made its intentions toward the plantation companies clear. It took another three years to fix the modalities, but on 16 October 1975 the long-expected Land Reform (Amendment) Act was signed into law by Speaker Stanley Tillekeratne, using the same pen with which he had earlier signed the Constitution. The entire plantation industry of Sri Lanka, comprising a total of some 415,000 acres (168,000ha.) of mostly cultivated land and associated assets, became the property of the State. In Colombo, many of the largest mercantile firms had been estate-owning companies and agency houses; they closed down or struggled on, supported by what had formerly been subsidiary lines of business. Panic spread through the business sector: this was a revolution, nothing less.
The government managed and operated its new assets through several bodies: with respect to tea, the most important of these were the State Plantation Corporation and the Janatha (‘People’s) Estate Development Board. Sri Lankan superintendents and managers were recruited to replace the British ones who had returned home, and though much of the ‘trade’ remained in private hands, change nonetheless swept the industry. The Sri Lanka Tea Board, a State-run successor to the Tea Propaganda Board and certain other privately-run industry bodies, was also formed at this time.
The Sri Lankan government retained its monopoly on tea production and export for sixteen years. The most significant development during that period was the growth of a vast new market for Ceylon Tea in the newly affluent markets of the Middle East. From Iraq to Oman, Iran to Turkey, the demand for Sri Lanka’s most famous product expanded prodigiously. This was answered by a parallel expansion in tea production, especially in the low-grown regions of Ruhuna and Sabaragamuwa, which produce a strong, full-bodied, dark-liquored tea that appeals to Middle Eastern tastes.
Also during this period, the industry produced its first tea bags, and by 1983, a limited degree of mechanization had been introduced in the form of CTC (‘cut, twist, curl’) machines at some factories. Export duties and ad valorem taxes on tea sales, introduced during the 1960s when the plantations were still privately owned, were abolished. However, growing administrative difficulties, labour problems and financial losses finally resulted in large-scale privatization (under a different government) in 1992-93. Although the State retained title to the plantation lands, management contracts under long leases were offered to the private sector. Another change occurring during this period was the rise of the tea smallholder. Cultivators living in tea-growing areas began to cultivate small ‘plantations’ on their own land, plucking the tea themselves and carrying it to nearby factories for sale and processing. This smallholder sector has received considerable encouragement and support from the state and is today responsible for a very large proportion of the island’s produce.
All these changes instituted a new era for Ceylon Tea, which continues to this day.
In 1996, Sri Lanka’s tea production exceeded 250,000 metric tons for the first time. Export figures vary year on year, presently averaging around 300,000 metric tons. With its reputation for quality sustained and reinforced, and with serious new attention being paid to sustainability and care for the environment, the future of Ceylon Tea looks bright.