Cinnamon

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The contribution of the cinnamon industry to the Sri Lankan economy and to the Sri Lankan agricultural trade.
The Cinnamon industry makes a considerable contribution towards the export income generated from Agricultural plant products in Sri Lanka. The maturity of cinnamon plantation has resulted in a favorable export demand for Sri Lankan cinnamon products in the foreign market. The major product of the cinnamon plant is quills this brings seventy two percentage of exchange earning. The cinnamon bark products are featherings, chips, ground cinnamon, cinnamon powder, leaf oil and bark oil. Cinnamon is useful in many industries such as food and perfumery industries and also in pharmaceutical and essence industries. 350,000 families in Galle, Matara, Hambantota benefit from the cinnamon industry for their living. Hon. Minister of Finance & Planning, Dr. Sarath Amunugama, M.P, in his budget speech in 2005 stated the importance of the spice as “Sri Lanka produces more than 90 percent genuine cinnamon (Cinnamomum Zeylanicum Blume) in the world. Our exports account for 63 percent of all spice exports in the world. Cheap low quality alternatives have begun to enter the global market leading to increased competition. There is an urgent need for increased investment in research and product development for value addition in cinnamon. Efforts to give “Ceylon Cinnamon” maximum protection under WTO agreement are being intensified. Investments in marketing “Ceylon Cinnamon” are essential to combat this competition. I propose to impose a cess of Rs.2.50/kg. Or 0.5% of the value whichever is higher for the development of this industry. The Government will contribute Rs.10 million to set up a Cinnamon Development Fund”.
Social economic problems faced by the cinnamon industry
The cinnamon industry has lost fifty percentage of the market share over the past ten years because the major markets Mexico and USA are taken over by Cinnamomum cassia. This is due to increase in cost of

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