"Instead money goes to consumption loans, trade, motor vehicle finance," Jayasundera told reporters.

"Probably the banking system finds it easy. But lending to animals, dairy - local dairy - local economic activity is limited.

He was speaking shortly after a launch ceremony for the finance ministry's 2012 annual report.

"I made a request from the Governor (of the Central Bank) himself who was himself at the launching ceremony to look at that as the regulator to see whether we can get 10 - 20 percent of domestic credit goes to the real economy of the country," he said.

"The guy who grows a banana tree needs at least eight months to get a fruit."

But state directed lending can also have negative effects, according to critics of such policies.

Banks also need good and safer borrowers, as they lend money saved by other hard working citizens. Without reliable crop insurance, loaning to agriculture can be risky.

Sri Lanka's large state banks have been bailed out twice in the 1990s, at a cost of about 5 percent of gross domestic product from tax-payers' money to cover losses from politically connected lending.

State directed lending can also stifle cash to fast growing sectors where money is most needed.

Some banking sector officials have said, they do lend to the agricultural sector, especially to purchase tractors and other equipment, which may not be readily visible.

Sri Lanka's agriculture sector remains mired in contradictory interventions.

Analysts say state directed lending should be covered by Treasury guarantees so that the potential burden of such loans is clearly visible to the tax-paying man on the street.

Sri Lanka's farmers - especially those not engaged in export agriculture - have been among the most pampered by state support and among the least productive or cost efficient.

Sri Lanka has pumped billions of dollars into irrigation, given fertilizer subsidies and import protection at the expense of the poorest citizens allowing them to earn rents.

Entire sectors such as potatoes survive on protection and making basic carbohydrates expensive to the poorest sections of the population.

Some sectors of agriculture however also suffer from weak property rights and have been hit by expropriation in the past.

Some farmers, including small rubber farmers who export competing with the best in the world, have been hit by export taxes and have been denied the true international price in a bid to subsidize businesses higher up the value chain at their expense.