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Abstract
In the slowly growing global tea market Lanka has not performed as well relative to its
competitors in recent times as it did in the past. Sri Lanka needs to improve the efficiency
of its industry to remain competitive in world tea market.
Improving efficiency and international competitiveness in the Sri Lanka tea industry
requires that the high costs of production, associated with low productivity, be reduced.
Tea producers have the main responsibility for this. However, for improving efficiency
and achieving international competitiveness, it is necessary that government policies for
the tea industry are consistent with correction of market failures. This is not the case at
present, with government policies for the tea industry directed partly to correcting market
failures but more to achieving political goals.