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Cablegate: Tfiz01: Sri Lanka Proposes to Sell the U.S. Tea For

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS COLOMBO 000561

SIPDIS

FOR D, A/S ROCCA, USAID/AA/ANE WENDY CHAMBERLIN AND IRAQ
TASK FORCE

SENSITIVE

E.O. 12958: N/A
TAGS: EAID ECON EAGR IZ CE UN
SUBJECT: TFIZ01: SRI LANKA PROPOSES TO SELL THE U.S. TEA FOR
HUMANITARIAN AID TO IRAQ


1. (U) This is an action request, please see para. 8.

2. (U) The government of Sri Lanka (GSL) has proposed
selling the USG about USD 2 million in tea to include in US
humanitarian aid to the people of Iraq. Minister of
Plantation Industries Lakshman Kiriella made the pitch to
the Ambassador on April 2, outlining GSL's rationale for the
proposal. Sri Lanka, he said, has traditionally supplied
tea to Iraq, most recently under the UN's Oil for Food
program. When conflict broke out two weeks ago, Sri Lankan
tea sales to Iraq halted, with a devastating effect on the
local tea industry - particularly on the "low-grown" teas
traditionally sold to Iraq. Large quantities of "low-grown"
went unsold at the March 25 tea auction, prompting the GSL
make this request. Kiriella made the pitch for the U.S. to
make this USD 2 million purchase at the next scheduled tea
auction on April 8.

3. (SBU) Kiriella emphasized that "low-grown" tea is
typically farmed by small landholders (about 260,000 people
working one acre or so each), who are more susceptible to
market disruptions than large plantation companies.
Furthermore, "low-grown" tea is farmed mainly in regions of
Sri Lanka's south where the left-wing JVP party is active.
GSL is particularly worried that a prolonged downturn in
"low-grown" tea sales will increase JVP support in the
region. A large US tea purchase now, Kiriella said, would
help dampen this effect.

4. (U) The Ambassador listened politely, but cautioned
Kiriella that his proposal was not likely to be a winning
one, particularly on short notice.

5. (U) Kiriella added that GSL intends to make its own
humanitarian grant of tea to Iraq. But the amount GSL can
afford to give (about USD 50,000) will neither meet Iraqi
demand nor bring an appreciable benefit to affected farmers.
GSL therefore is requesting US assistance to buy a much
larger amount of tea, about USD 2 million worth.

Comment
-------

6. (SBU) Post is, of course, not recommending that the U.S.
purchase Sri Lankan tea in order to neutralize an upswing in
support for the opposition JVP. Still, it is true that a
large-scale surge in support for the JVP could threaten a
delicate peace process. Post believes the GSL is right to
be concerned about the effect of the war in Iraq on its
economy and, by implication, the nation's prospects for
peace.

7. (U) Post further recognizes that the Department is
consumed with pressing humanitarian concerns in Iraq, and
that consumption of tea is not a matter of life and death
for the people of Iraq. Nonetheless, the GSL proposal does
present an opportunity to offer comfort food to the people
of Iraq, while addressing a critical threat to the Sri
Lankan economy. Post presents the proposal for the
Department's consideration as what would be a very small
part of the overall humanitarian assistance package for
Iraq. If the Department is interested in this
unconventional idea, then it is true that a salutary effect
could be achieved by purchasing the tea at the April 8
auction.

Action Request
--------------

8. (U) Post requests the Department to examine whether a USD
2 million tea purchase from Sri Lanka fits into our overall
humanitarian assistance strategy for Iraq. Please advise.

WILLS

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