Mr Chairman,
Mr President of IFAD,
Distinguished Members of the Governing Council,
Ladies and Gentlemen,

Let me, Mr Chairman, in the first instance congratulate you on your election as Chairperson of this meeting. I am confident that under your leadership and guidance the deliberations of this meeting will be successful.

It is indeed my pleasure to speak on behalf of the Government of Sri Lanka at the 25th Meeting of the Governing Council of the International Fund for Agricultural Development and present Lri Lanka's perspective of its agricultural development agenda.

Sri Lanka has been the recipient of generous development assistance, which IFAD has been providing overtime. Sri Lanka has benefitted immensely by the support to the Integrated Rural Development Programs in Kurunegala, Anuradhapura, Badulla and more recently to Matale, where the Regional Economic Advancement Program has been quite successful. For this assistance on behalf of the Government and people of Sri Lanka, I thank you very much.

Mr Chairman, we are meeting at a turbulent time in the history when the economic underpinnings of the developing and developed world are being challenged. The economic performances of a number of countries have been poor compared to previous years. Sri Lanka has for the first time registered an overall negative growth for 2001, as have been reflected by a number of other Asian economies. This has been mainly due to the political and economic instability in most parts of the world.

The outcome of the globalization process is being questioned, making developing countries such as Sri Lanka meet a number of different economic challenges. Some of them are not between the more developed and less developed countries, rather between the developing countries themselves. This is primarily due to the fact that all of us need to be competitive on cost, quality and increase productivity.

Having said this let me now address the issues facing Sri Lanka.

Agriculture still continues to be the mainstay of the economy in Sri Lanka with almost 72% involved in agricultural activities and the sector providing about 28% of employment. The real output in agriculture is estimated to have increased by 2.5% in 1998, but has declined since, primarily on account of unfavourable weather.

Mr Chairman, my government today is looking afresh at the agricultural sector and its approach to Rural Development. With the creation of the new Ministry of Agriculture and Livestock, Sri Lanka is embarking on a new approach to rural development and poverty alleviation. The entire approach to poverty alleviation and rural development is now being changed with emphasis on empowering the farmers and developing avenues to improve their well being. Meaningful steps have been taken in this regard to organize small farmers to units that can help themselves particularly through the "Samurdhi" programme. Sri Lanka has also prepared a draft Poverty Reduction Strategy. This strategy document will ensure better co-ordination of government and donor efforts to achieve a speedy reduction of poverty at all levels by creating opportunities for pro-poor growth, empowerment of rural and affected communities, investing in social infrastructure and assuring pro-poor reform in Governance. Within this broad framework, agriculture will continue to play a critical role as the basis of revitalizing rural development and a spring board to broad-based development rooted on infrastructure, industry and service sector expansion.

Specific policies are developed to uplift the livestock sector with special programs for both poultry and dairy development. Livestock had ever considered as a potential source of supplementary income, particularly for small farmers with limited land holdings. Several ongoing livestock development programs will be redirected at poor farmers, including those to develop and disseminate improved breeds, programs for disease control, improved feed and pasture and dairy development in the plantations with private initiative.

Mr Chairman, three major problems farmers experience in Sri Lanka are the high cost of production, low productivity and low quality standards of the products, which are exactly the reverse of what should be there for the farmers to be able to compete. Farmers are well aware of the need to change and are willing to change, realizing the fact that possession of improved technology can change their income levels. Sri Lanka is making all attempts to provide the farmers with new high yielding improved varieties of crops, quality seed and management practices in a sustainable manner that will use natural resources, taking full account of the impact of these decisions on household food security, farm incomes, employment and environment.

This is enabled by concentrating the Research and Development efforts on a few specific number of crops, enhancing post harvest value added programs and reducing cost of production. It is here that we would welcome assistance from IFAD primarily to obtain new production technologies. I propose that the international community ensure the availability of technology, experts and equipment required by the developing countries through programs to increase sustainable productivity and quality.

My Government is committed to developing a market-oriented pricing and incentives environment for the agricultural sector. A fresh look at the well-being of the farmer with economic prices for their produce to guarantee reasonable income is also the basis of this programme. For this purpose, Sri Lanka is developing a tariff structure that will ensure this process.

Direct involvement in the commodity markets will be gradually reduced, and by 2005 agricultural trade policy will become more stable and transparent for the main food commodities.

Mr Chairman, Ladies and Gentlemen, these are the highlights of my Government's basic approach for the improvement of agricultural and rural sector and we look forward to work closely with IFAD on these issues. It is in this connection that I request IFAD's assistance in helping is to mobilize access to new technologies that will not only help increase output, but also look into the issues of minimizes post harvest loses, increasing value addition, improving quality and better marketing. Together I am sure, we can ensure a better quality of life for our farming community and provide a better environment for social and economic development for the population of Sri Lanka.

Mr Chairman, members of the Governing Council of IFAD, Ladies and Gentlemen, once again let me wish the deliberations of this meeting a success.

Thank you.