Sri Lanka Country Statement to the 27th Session of the Governing Council of The International Fund for Agricultural Development

Mr. Chairman, Ladies & Gentlemen,

Over the years since 1978, Sri Lanka has benefited much from assistance provided by IFAD through 10 project loans with a total commitment of US $112 million. Sri Lanka is very grateful for this useful assistance from IFAD. In fact, Mr. Chairman, Sri Lanka was the first country to benefit from an IFAD loan in 1978. Most of these projects have been completed as of now. The projects were aimed at increasing productivity and alleviating poverty as per the overall Government strategy. In keeping with IFAD’s basic strategy towards agricultural development, these projects also focused on assisting the marginalized groups of the society.

Recently, IFAD took the initiative in preparing a Country Strategic Opportunities Paper (COSOP) which has been the result of a two-year consultative process that included a Country Portfolio Evaluation (CPE) and a series of preparatory studies and surveys. This paper (COSOP) identifies the sectors to be focused on, for IFAD interventions during the period from now up to 2007. My Government concurs with the recommendations made therein to focus on the dry zone, the estate sector, the coastal areas and the hinterland, where poverty still prevails. I note with much appreciation the proposed continuation of support by IFAD to Sri Lanka’s rural development, peace consolidation and conflict prevention efforts through assistance amounting to US$ 60 million during the aforementioned period.

My Government is aware of the challenges arising from globalization, such as the need to be competitive on cost, quality, and increased output, issues most countries are confronted with. We continue to devote our attention to overcoming these challenges with the assistance of IFAD and other organizations.

Mr. Chairman, I wish to place before you some facts pertaining to Sri Lanka. Agriculture continues to be significantly important to our economy, since it provides 21% of the national output and employs 35% of the workforce, with almost 72% of the population involved in agricultural activities of some form or other. Agriculture also provides an important stimulus to other sectors of the economy. Hence, focusing on agriculture presents the best opportunity for reducing poverty island-wide as agriculture is the major potential source of employment for the poor, 90% of whom live in rural areas. Accordingly, my Government is acting on these lines through many programmes to improve the farming community.
As far as poverty levels are considered, approximately 25% of the population or 5 million people live below the poverty line. Hence, poverty reduction programmes have an important role in Government strategies and the ongoing Samurdhi Welfare Programme launched in 1994 focuses on the poor.

Even though the small farmers are the key producers of agricultural output, their productivity levels need improvement and their enterprises need to be made commercially viable. Moreover, they need to be moved away from subsistence level farming. The present announced agricultural policy of the Government of Sri Lanka envisages to improve the agricultural sector productivity, raise farmer incomes, achieve family food security and increase overall agricultural production, in keeping with the local and export demand. IFAD assistance to improve subsistence farmers would be most appropriate as this is an issue well within the mandate of IFAD.

Mr. Chairman, the National Agricultural Policy and Strategy of my Government has identified a number of key issues and challenges facing the sector. The need for improving labour productivity, importance of food security without appreciable increase in local food prices, the need for development of a food processing industry and the changing macro-economic policies and increasing open-ness and globalization, were highlighted as important issues and challenges facing the sector.

A number of programmes for the agriculture sector are to be implemented under the Regaining Sri Lanka initiative, with the accent on increasing productivity, infusion of new technology, improvement of marketing infrastructure and increased private sector participation with the ultimate objective of improving the farming population while providing a surplus and a launching pad for further development of other sectors of the economy, through the agricultural sector. High priority is also being given to bring in the youth of Sri Lanka towards crop production activities through the revitalization of the Young Farmers’ Clubs, which performed an active role in the past in engaging the youth in farming. IFAD support to programmes of this nature would be most welcome.

The Government of Sri Lanka is mindful of the best asset that we have, the “people.” This includes a population with 92% adult literacy rate and with a sound human development index, coupled with the women folk enjoying a relatively favorable status in the society. This fact is taken note of in planning and implementing all activities.

This, Mr. Chairman, is an overview of my Government’s basic approach for the improvement of the agricultural and rural sector and the Government does hope to work closely with the IFAD on these issues. In this regard, I wish to request on behalf of the Government of Sri Lanka, IFAD assistance in mobilizing access to new technology to increase output and also minimize post harvest losses, increase value addition, improve quality of produce and facilitate better marketing. In this endeavour, the youth will play an important role as it is necessary to draw a part of this vital sector of the population also to farming with new and appropriate technology. The final outcome of all this shall be to ensure a better quality of life for our farming community and provide a better environment for the social and economic development for our population at large.

Mr. Chairman, I am also pleased to announce that my Government has granted approval for the payment of US $ 1,001,000 as Sri Lanka’s contribution towards the VI Replenishment of IFAD by three installments respectively in 2004, 2005 and 2006. Arrangements are being made to pay the first installment of US $ 334,000 for the year 2004, as soon as possible.

We look forward to working even closer with IFAD and our development partners in implementing our programmes to uplift the Sri Lankan people. A special word of thanks, on behalf of my Government, must be placed on record, for the dynamic staff of IFAD, especially His Excellency Lennart Bage, the President and the officers handling Sri Lanka.