IMPACT OF FACTORY MODEL CULTIVATION ON TEA INPUT AND OUTPUT QUALITY: A STUDY IN SELECTED TEA FACTORIES IN RUHUNU REGION, SRI LANKA

The tea industry has long been acknowledged as a major source of livelihood in Sri Lanka with regards as the biggest provider of employment, export earnings and government revenue. Kenya, India, China, Vietnam, Malawi and Indonesia are emerging as competitors for Sri Lankan tea industry in the international market. Ceylon tea still has golden opportunity to compete in the global tea market with respect to high quality tea products. Factory model cultivation is initiated to encourage tea factories to control their tea input quality, in turn improves tea output quality. Based on this premise, this study aims to identify the impact of factory model cultivation on tea input and output quality of tea factories in Sri Lanka. An empirical investigation was conducted on a sample comprising 74 tea factories in Ruhunu region, Sri Lanka. A personally-administered structured questionnaire was used to collect data. The independent sample t-test and the multiple regression analysis were employed to test the hypotheses. The findings offer useful insights not only in terms of understanding the link between tea input quality and output quality of tea production, but also the impact of factory model plantation on controllability of the external suppliers input quality. The study has extended the understanding of the extent of applicability of the factory model cultivation to upgrade input and output quality of tea as well as controlling abilities towards input quality of external suppliers. JEL: O13, Q18, Q1