IFAD to invest $33 million in smallholder agribusiness partnerships in Sri Lanka
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IFAD to invest $33 million in smallholder agribusiness partnerships in Sri Lanka26 June 2017
Rome, 26 June 2017 – The International Fund for Agricultural Development and Government of Sri Lanka signed a financing agreement today that will help 57,500 poor rural households in Sri Lanka increase their incomes and food security by expanding livelihood and business opportunities in agriculture.
The Smallholder Agribusiness Partnerships Programme, financed through an IFAD loan of US$33.7 million plus $19.4 million from the Government, will help to alleviate rural poverty and undernutrition in the poorest rural areas of the country. The programme is projected to cost $105 million in total and will include financing from the private sector.
The financing agreement was signed by Gilbert F. Houngbo, President of IFAD, and R. H. S. Samaratunga, Sri Lanka’s Secretary to Treasury and the Ministry of Finance and Mass Media.
Though Sri Lanka is considered a lower middle-income country, food and nutrition security is uneven across the country. There is a 15 per cent stunting rate and 22 per cent wasting rate among children under five years old. Population groups most affected by poverty are smallholder farmers, plantation workers, underemployed and landless labourers, young people and women.
"Close to 90 per cent of the country's poor live in rural areas and depend on agriculture for their livelihoods," said Hubert Boirard, IFAD Country Programme Manager for Sri Lanka. "Developing the agribusiness value chain - which encompasses agricultural production, processing, distribution and marketing - will help smallholder farmers to increase their incomes and will improve employment opportunities and household nutrition in rural areas."
Despite a declining share in GDP, the agricultural sector remains the backbone of the Sri Lankan economy and an important source of employment. Large plantations continue to produce tea, rubber and coconut. Smallholder farmers produce rice, maize, and a variety of fruits, and vegetables. For these rural people, there is significant market potential in both export and local markets for their agricultural output. By identifying and catering to specific markets, they can reap higher profits for their agricultural goods. The private sector is demonstrating a willingness to partner with smallholder producers to increase the quantity and quality of their goods, and to identify and respond to market demands.
The new programme will provide a platform for smallholder farmers, particularly women and young people, to access financing and business training and will help them to form partnerships with each other and with the private sector.
IFAD has been working with Sri Lanka since 1978, investing a total $317.2 million in 18 programmes and projects, reaching over 614,832 households.
Press release No.: IFAD/37/2017
IFAD invests in rural people, empowering them to reduce poverty, increase food security, improve nutrition and strengthen resilience. Since 1978, we have provided about US$18.5 billion in grants and low-interest loans to projects that have reached some 464 million people. IFAD is an international financial institution and a specialized United Nations agency based in Rome – the UN’s food and agriculture hub.