World Bank approves USD125mn credit to modernize Sri Lanka agriculture

June 30, 2016 (LBO) – The World Bank has approved a 125 million US dollars credit from the International Development Association to assist Sri Lanka in modernizing its agriculture sector.

The project will be implemented through the Ministry of Primary Industries, the Ministry of Agriculture, and five participating provinces, including the Northern, Eastern, Central, North-Central and Uva Provinces.

Sri Lanka’s agricultural sector is at a strategic cross-road. A major milestone has been the achievement of rice self-sufficiency – a long sought-after goal of successive agriculture strategies since independence.

At the same time, however, the share of population employed in agriculture has remained at about 30 percent over the past 10 years, even as the share of the sector in national GDP has continued to decline to 10 percent.

“While preserving and building on Sri Lanka’s farming traditions, there is now also space to shift focus to diversification and the promotion of high-value and export oriented food crops” said Françoise Clottes, World Bank Country Director.

“Moving into the future, this shift in approach is crucial for income growth, poverty reduction and reversing the trend in increasing inequality, as well as better nutritional outcomes in the country.”

The project will support agricultural value chain development to promote commercial and export oriented agriculture, with particular focus on higher value fruits and vegetables.

It provides investments to improve productivity and diversification of current production patterns through modern agriculture technology demonstrations in the project areas, and supports new institutional arrangements in form of farmer organizations and farmer-agribusiness partnerships.

“This project is designed to demonstrate new agricultural practices and institutional arrangements in the project areas to link smallholder farmers into modern agriculture value chains and to create attractive jobs,” said Ulrich Schmitt, Program Leader of the World Bank.

“Innovation and new technology will help improve not only the economic efficiency in the sector, but also enhance resilience to natural disasters and climate change”.

Project beneficiaries include an estimated 30,000 smallholder farm households in the project areas that will benefit directly from the project’s small matching grants program and the agriculture technology demonstrations.

An additional 20,000 farm households will be supported through technical and business training and through the establishment of professional farmer organizations.