Agriculture is Sri Lanka's main economic activity. Nearly half the Sri Lankan labour force lives and works on farms or plantations. Farming methods vary from the traditional to mechanized, though still tend to be labour intensive, with buffaloes being used to draw ploughs, and sowing and harvesting done by hand. The country's main crops are tea, rubber, rice, spices and coconuts. Other significant exports include sugarcane and tobacco; tropical fruit such as mangoes, papaya, pineapple and plantain; spices such as cardamom, cloves and cinnamon; and vegetables like tomatoes. The ocean around the island is home to varieties of fish; ocean fishing, a smaller industry, is mostly still done with non-motorized crafts.

Manufacturing, a smaller sector, is mostly focussed on processing agricultural goods and producing textiles, leather goods, chemical, plastics and cement. Sri Lanka's natural resources, however, have been an important part of the economy. The country mines gem stones such as emeralds and rubies, and produces the best graphite in the world. Extracting salt from the sea is the oldest industry. New projects will exploit the country's potential for petroleum products and hydroelectric power.

Over one-third of the labour force works in the services, which include the public and private sector. The government provides a number of social programs, from seniors pensions, disability assistance and relief for people affected by floods and monsoons. The government also supports some volunteer organizations engaged in social welfare activities. Samurdhi, a small poverty program, helps the country's neediest families with food, shelter or financial assistance. Retirement age for both men and women is age 55.

Women make up one-third of the labour force, and are guaranteed equal rights under the constitution. Some have entered male-dominated professions and managed to reach managerial levels, though women who work outside the home more often do so as unskilled labour in tea, rubber and coconut plantations.

Ethnic conflict has strained the economy, resulting in large expenditures on defense and lost tourism revenues. Unemployment is high (over 10%), particularly among youth.

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Growing tea is a laborious process. The bushes must be regularly pruned, and the leaves and buds picked by hand. The tea is then dried on hessian mats or troughs, crushed, and fermented. Tea was first brought to Sri Lanka in 1867 when coffee plantations were destroyed by disease.