Drought has cut Sri Lanka's tea production by 50 percent causing havoc to the livelihoods of about 400,000 small holders largely in the south and prompting possible relief from the Government, which has described the situation as " disturbing", officials said here on Wednesday. Tea smallholders numbering close to 400,000 have been affected by this condition, which has resulted in low income for factories that have begun processing every other day due to leaf shortage and daily intake becoming uneconomical. The Government has assured it is closely monitoring the situation and in the next few weeks, if the condition does improve, would resort to giving financial aid to smallholders. The production targets of the country's highest foreign exchange earning crop are also in doubt due to the severe weather. Plantation Industries Minister Mahinda Samarasinghe told reporters the drought's effect on smallholders was "quite disturbing". "There is bound to be a production drop. We are monitoring the situation very carefully and evaluating it on a daily basis. We will do whatever we can to help the smallholders," he said. The drought in the first three months is likely to affect the overall results for the year's production, Sri Lanka's Tea Board Promotions Director Hasitha De Alwis predicted. The industry will have to work hard to maintain momentum from the record teas crop of 340 million kilograms in 2013, which was a 3.6 percent growth from 2012. Alwis reflected that this year's target was to increase production by 1-2 percent to 348 million kilograms. Expectation of this increase was based on good weather condition as well as results of the tea replanting campaign that was carried out during the previous years. "However, we never anticipated this severe drought. Hopefully, if it clears up in the second quarter, we would be able to hit on the 340 million kilograms mark," De Alwis disclosed. Tea in Sri Lanka earned 1.5 billion U.S. dollars in 2013 and is the island's second largest export..