Chandrasena Wijesinghe, convenor of the Joint Federation of Tea Small Holders, told reporters they will organise protests if the government does not step in with financial support to help small farmers.

"The industry has collapsed and small holders have lost their means of income," he told a news conference Wednesday.

He said prices paid by private tea factory owners to small farmers supplying the green leaf to make black tea had fallen below their production costs.

Many farmers in the southern tea growing districts had given up plucking as the prices fetched by their green leaf were no longer remunerative.

He said small holders were demanding the government use funds from a cess collected from tea exports to support small holders.

Small holders mainly in the southern areas produce over 70 percent of the tea grown in the island.

The crisis started in October when large stocks of low grown teas made by small holders went unsold and prices plunged, following the bursting of the global commodities bubble.

Sri Lankan tea prices had hit record highs earlier this year and producers had expected prices to stay high.

The sudden drop in prices and the difficulty in selling large stocks of tea at the Colombo auctions created cash flow problems, for factory owners and small farmers.

The worse affected were producers of low grown teas, which are in demand in Russia and the Middle East, where demand was affected by the collapse in crude oil prices.

Wijesinghe said small farmers planned to organise demonstrations in tea growing regions to protest against the lack of government support.

Although the state Tea Board had intervened at the auctions twice to buy up unsold stocks with government funds, Wijesinghe said the intervention was not enough to support small farmers.