The Island: 13/04/2007" by Apeksha Senadheera
The local handicrafts industry has shown a slight slump in recent times mainly due to the dip in tourism.
According to the National Crafts Council (NCC) Chairman Buddi Keerthisena, handicrafts industry performs simultaneously with the Tourism industry and tourists have been the main buyers of the local handicraft products.
The NCC has taken steps to promote handicrafts among general public and the handicrafts exhibition held recently at the Viharamahadevi Park was an initiative towards that.
"We wanted to test the local demand for handicrafts and it was really good. The exhibitors were able to sell most of their products," said Keerthisena speaking to The Island Financial Review.
Meanwhile, NCC intends to have a number of craft fairs in the future in a bid to provide the handicrafts producers with a good market.
The next handicrafts fair is to be held in the National Arts Gallery form August 18-21, and it is expected to showcase the quality handicrafts produced by rural craftsmen.
"The country has talented craftsmen but they are unable to find the potential market and these exhibitions will be helpful to them," said Keerthisena.
The NCC supports the handicrafts industry by providing infrastructure facilities, raw material, marketing places in order to improve the industry.
Saturday, April 14, 2007
NCC to uplift local handicraft industry
Friday, April 13, 2007
CDR, a pioneer in development research
Daily News: 13/04/2007" Hiran H. Senewiratne
RESEARCH: The Centre for Development Research (CDR) is one of the few institutions that provide opportunities for higher education and development research, for research students in the country, its Director Dr Wilbert Gooneratne said.
The CDR will initially focus on development research in the areas of rural, urban and regional development studies, disaster mitigation and management studies, social and community studies and, studies on key economic sectors. In addition to that they undertake development research work as well.
CDR will also provide consultancy and advisory services, monitoring socio-economic trends and dissemination of knowledge and information and providing facilities for research personnel in the country, he said.
Where the urban and regional development studies are concerned they are mainly concentrating on income disparities and rapid urbanisation issues in the country.
When considering Social and Community Studies they do more research work on social studies.
Further, Disaster Mitigation and Management is one of the most popular fields that they undertake with the happening of major natural and man made disasters in the country. It also conducts general macro economic sector studies for various local and international agencies, he said.
Dr Gooneratne said their Institute is open for professionals from universities to obtain their services on social and economy based research work in the country. CDR mainly undertakes high quality research on economic developments relating to Sri Lanka and in addition to that it also provides consultancy and advisory services. It also promotes research in collaboration with other local and foreign institutes, Dr Gooneratne said.
The institute welcomes young scientists to undertake research activities on Sri Lanka’s key social and economic issues. They also facilitate foreigners to do research as well, he said.
The most important aspect of CDR is that they are closely linked with private business chambers which do research work for them, he said.
They also provide and mobilise talented youth to do research work on various socio and economic activities on Sri Lanka at institutional and outer institutional levels in the country.
According to Gooneratne CDR will also undertake international research programmes on various regions including Asia and Middle-East countries on the same aspects.
CDR has 50 to 60 registered consultants and 12 senior research fellows, who are working closely with their research programmes, he said.
CDR is affiliated to the Royal Institute of Colombo and was formed two years ago to facilitate research activities in the country.
RESEARCH: The Centre for Development Research (CDR) is one of the few institutions that provide opportunities for higher education and development research, for research students in the country, its Director Dr Wilbert Gooneratne said.
The CDR will initially focus on development research in the areas of rural, urban and regional development studies, disaster mitigation and management studies, social and community studies and, studies on key economic sectors. In addition to that they undertake development research work as well.
CDR will also provide consultancy and advisory services, monitoring socio-economic trends and dissemination of knowledge and information and providing facilities for research personnel in the country, he said.
Where the urban and regional development studies are concerned they are mainly concentrating on income disparities and rapid urbanisation issues in the country.
When considering Social and Community Studies they do more research work on social studies.
Further, Disaster Mitigation and Management is one of the most popular fields that they undertake with the happening of major natural and man made disasters in the country. It also conducts general macro economic sector studies for various local and international agencies, he said.
Dr Gooneratne said their Institute is open for professionals from universities to obtain their services on social and economy based research work in the country. CDR mainly undertakes high quality research on economic developments relating to Sri Lanka and in addition to that it also provides consultancy and advisory services. It also promotes research in collaboration with other local and foreign institutes, Dr Gooneratne said.
The institute welcomes young scientists to undertake research activities on Sri Lanka’s key social and economic issues. They also facilitate foreigners to do research as well, he said.
The most important aspect of CDR is that they are closely linked with private business chambers which do research work for them, he said.
They also provide and mobilise talented youth to do research work on various socio and economic activities on Sri Lanka at institutional and outer institutional levels in the country.
According to Gooneratne CDR will also undertake international research programmes on various regions including Asia and Middle-East countries on the same aspects.
CDR has 50 to 60 registered consultants and 12 senior research fellows, who are working closely with their research programmes, he said.
CDR is affiliated to the Royal Institute of Colombo and was formed two years ago to facilitate research activities in the country.
CB warns of ill effects of farmer subsidies
Daily Mirror: 13/04/2007"
The Central Bank has said that agriculture subsidies are not beneficial instead the Government should explore policy initiatives aimed at increasing farmer income.
The Central Bank’s thinking as well as advise is contained in its Annual Report for 2006.
“Policy initiatives aimed at increasing farmer income would be more beneficial than providing subsidies,” the Bank had said.
It pointed out that the continuation of providing subsidies to products with relatively low value additions at market prices such as paddy would not ensure the long-term increase in farmers’ income since such crops have limited capacity to do so. Further such policies may also hinder crop diversification, which is a need of the time.
“Optimal benefits from the limited resources such as land and water could also be better harnessed by encouraging farmers to undertake more profitable high value added crops and animal husbandry rather than by providing them subsidies for crops where the value addition is rather low,” the Central Bank has said.
Though the Annual Report listed subsidies as one of the stimulants for improved agriculture growth in 2006, analysts said that the Bank had raised valid points hence the Government should take serious note.
Central Bank also said a sustainable growth in agriculture requires productivity enhancement, facilitating marketing and related infrastructure facilities, adopting consistent trade policies, providing rural financing and integration of crops and livestock.
A relatively robust performance by the agriculture sector helped the economy to grow to the highest level in three decades last year.
The agriculture sector grew by 4.7% compared with 1.9% in 2005 and its contribution to change in GDP was 11.1% as against 5.8% in 2005. The overall GDP grew by 7.4% in 2006 in comparison to 6% in 2005. However agriculture sector’s share of GDP amounted to only 16.8% as against 17.2% in the previous year.
The Central Bank said that agriculture sector in 2006 continued its recovery benefiting from strengthening partnership between public and private sectors together with favourable weather.
The efforts of increased agriculture productivity adopting new technologies such as usage of rain guards, drip irrigation and poly tunnels etc., switching to optimal usage of land and water resources making available inputs such as seed and fertilizer at subsidized prices, provision of credit facilities for agricultural activities, provision of tax concessions for importation of modern machinery and equipment required for agriculture related activities contributed to this recovery.
Further the livestock sector performed well with increased private sector activities and various incentives and assistance provided by the government including the Dairy Farmer Empowerment Project.
The production of other field crops (OFC) such as maize, big onions and soya beans reported sharp increases in 2006 benefiting from increasing domestic production. Providing post harvest handling links and equipment such as plastic crates and technical advise to farmers and enhancing marketing facilities too supported the increase in agriculture production.
Paddy output in 2006 recorded a new high level of 3.3 million metric tons benefiting from favourable weather and subsidized fertilizer. However farmers continued to face marketing problems as the government led paddy purchasing scheme faced several constraints.
Rubber production registered the highest level after 1996 supported by attractive prices and productivity improvements.
Fish production continued to recover following the set back experienced due to the tsunami. However, a few instances of labour unrest led to the decline of tea production marginally during the year.
Commenting on productivity enhancements, the Bank said it could be strengthened through further development of agricultural research and extension services. A close collaboration between researchers, extension service providers, formal corporate sector and farmers is necessary for the optimal benefit of new innovations.
The need for an aggressive strategy for the dissemination of technical, economic and environmental information was also stressed by the Bank, to better educate farmers.
Minimising post harvest losses, would benefit farmers, intermediaries and consumers. Promoting and providing incentives for value addition would help employment generation in agro processing industries.
The Central Bank has said that agriculture subsidies are not beneficial instead the Government should explore policy initiatives aimed at increasing farmer income.
The Central Bank’s thinking as well as advise is contained in its Annual Report for 2006.
“Policy initiatives aimed at increasing farmer income would be more beneficial than providing subsidies,” the Bank had said.
It pointed out that the continuation of providing subsidies to products with relatively low value additions at market prices such as paddy would not ensure the long-term increase in farmers’ income since such crops have limited capacity to do so. Further such policies may also hinder crop diversification, which is a need of the time.
“Optimal benefits from the limited resources such as land and water could also be better harnessed by encouraging farmers to undertake more profitable high value added crops and animal husbandry rather than by providing them subsidies for crops where the value addition is rather low,” the Central Bank has said.
Though the Annual Report listed subsidies as one of the stimulants for improved agriculture growth in 2006, analysts said that the Bank had raised valid points hence the Government should take serious note.
Central Bank also said a sustainable growth in agriculture requires productivity enhancement, facilitating marketing and related infrastructure facilities, adopting consistent trade policies, providing rural financing and integration of crops and livestock.
A relatively robust performance by the agriculture sector helped the economy to grow to the highest level in three decades last year.
The agriculture sector grew by 4.7% compared with 1.9% in 2005 and its contribution to change in GDP was 11.1% as against 5.8% in 2005. The overall GDP grew by 7.4% in 2006 in comparison to 6% in 2005. However agriculture sector’s share of GDP amounted to only 16.8% as against 17.2% in the previous year.
The Central Bank said that agriculture sector in 2006 continued its recovery benefiting from strengthening partnership between public and private sectors together with favourable weather.
The efforts of increased agriculture productivity adopting new technologies such as usage of rain guards, drip irrigation and poly tunnels etc., switching to optimal usage of land and water resources making available inputs such as seed and fertilizer at subsidized prices, provision of credit facilities for agricultural activities, provision of tax concessions for importation of modern machinery and equipment required for agriculture related activities contributed to this recovery.
Further the livestock sector performed well with increased private sector activities and various incentives and assistance provided by the government including the Dairy Farmer Empowerment Project.
The production of other field crops (OFC) such as maize, big onions and soya beans reported sharp increases in 2006 benefiting from increasing domestic production. Providing post harvest handling links and equipment such as plastic crates and technical advise to farmers and enhancing marketing facilities too supported the increase in agriculture production.
Paddy output in 2006 recorded a new high level of 3.3 million metric tons benefiting from favourable weather and subsidized fertilizer. However farmers continued to face marketing problems as the government led paddy purchasing scheme faced several constraints.
Rubber production registered the highest level after 1996 supported by attractive prices and productivity improvements.
Fish production continued to recover following the set back experienced due to the tsunami. However, a few instances of labour unrest led to the decline of tea production marginally during the year.
Commenting on productivity enhancements, the Bank said it could be strengthened through further development of agricultural research and extension services. A close collaboration between researchers, extension service providers, formal corporate sector and farmers is necessary for the optimal benefit of new innovations.
The need for an aggressive strategy for the dissemination of technical, economic and environmental information was also stressed by the Bank, to better educate farmers.
Minimising post harvest losses, would benefit farmers, intermediaries and consumers. Promoting and providing incentives for value addition would help employment generation in agro processing industries.
Thursday, April 12, 2007
Dependency the cause of poverty
The Island: 12/04/2007" by Lakshmi de Silva
Dependency Syndrome is the latest addition to the list of causes of poverty in Sri Lanka, which is a serious matter to take in to consideration, Chairman Sri Lanka Economic Association Prof. A. D.V. de S. Indraratne said at a recent seminar held in Colombo.
Dependency on the State for everything, free food in the form of food stamps or Samurdhi, free transport, free health and free education, without trying to be self-employed and self reliant and burdening the economy of the country had been a main cause of poverty though no serious note of that has been taken, he said.
"Sri Lanka is no longer classified as a least developed country, or for that matter, a less developed country. It enjoys a per capita income of more than 1,300 US dollars and falls into the category of low middle income country. However, nearly half its population (45.1 per cent) live below the poverty line of 2 US dollars per day and nearly a quarter (23 per cent) is considered poor according to the Consumer Finance and Socio-Economic Survey of 2003/04 published by the Central Bank," he said Prof. Indraratne emphasized that the rural poverty is staggering with more than four fifth of the poor living in the rural sector and there were several reasons for this. One of course was the slow growth, compared to high performing economies of East Asia, China and India, Sri Lanka’s per capita economic growth during the last decade has been 3.4 percent.
Even though this is respectable, and is higher than the growth rate of developing countries, as a whole, it has not been able to make a dent on rural poverty, he said.
The slight decrease of a 3 percentage point achieved in overall poverty between 1990 and 2002, the latest year for which these figures are available was almost entirely in the urban sector, Prof. Indraratne said.
Another reason for the slow poverty reduction and its concentration in the rural sector is the uneven economic growth and its inequitable distribution. While the lowest 20 percent of the population receives only 4 percent of the total national income wide range regional disparities exist between districts and provinces. For Example more than half of the gross national income is contributed by one province alone, namely Western Province with its per capita income being more than twice as much as that of provinces such as Uva, Sabaragamuwa and Eastern.
Still another reason in the failure of successive governments to realize the full potential of the economy, including its rural small and medium sectors as in the case of Sri Lanka’s Asian neighbours, such as Singapore, Thailand, Malaysia and Republic of Korea which were economically behind Sri Lanka before the sixties he said.
Corruption is another major cause of poverty Prof. Indraratne said.
Dependency Syndrome is the latest addition to the list of causes of poverty in Sri Lanka, which is a serious matter to take in to consideration, Chairman Sri Lanka Economic Association Prof. A. D.V. de S. Indraratne said at a recent seminar held in Colombo.
Dependency on the State for everything, free food in the form of food stamps or Samurdhi, free transport, free health and free education, without trying to be self-employed and self reliant and burdening the economy of the country had been a main cause of poverty though no serious note of that has been taken, he said.
"Sri Lanka is no longer classified as a least developed country, or for that matter, a less developed country. It enjoys a per capita income of more than 1,300 US dollars and falls into the category of low middle income country. However, nearly half its population (45.1 per cent) live below the poverty line of 2 US dollars per day and nearly a quarter (23 per cent) is considered poor according to the Consumer Finance and Socio-Economic Survey of 2003/04 published by the Central Bank," he said Prof. Indraratne emphasized that the rural poverty is staggering with more than four fifth of the poor living in the rural sector and there were several reasons for this. One of course was the slow growth, compared to high performing economies of East Asia, China and India, Sri Lanka’s per capita economic growth during the last decade has been 3.4 percent.
Even though this is respectable, and is higher than the growth rate of developing countries, as a whole, it has not been able to make a dent on rural poverty, he said.
The slight decrease of a 3 percentage point achieved in overall poverty between 1990 and 2002, the latest year for which these figures are available was almost entirely in the urban sector, Prof. Indraratne said.
Another reason for the slow poverty reduction and its concentration in the rural sector is the uneven economic growth and its inequitable distribution. While the lowest 20 percent of the population receives only 4 percent of the total national income wide range regional disparities exist between districts and provinces. For Example more than half of the gross national income is contributed by one province alone, namely Western Province with its per capita income being more than twice as much as that of provinces such as Uva, Sabaragamuwa and Eastern.
Still another reason in the failure of successive governments to realize the full potential of the economy, including its rural small and medium sectors as in the case of Sri Lanka’s Asian neighbours, such as Singapore, Thailand, Malaysia and Republic of Korea which were economically behind Sri Lanka before the sixties he said.
Corruption is another major cause of poverty Prof. Indraratne said.
Wednesday, April 11, 2007
Livelihood recovery in tsunami affected areas satisfactory: report
Daily Mirror: 10/04/2007" By Aamna Mahboob and Farveeza Ansar
The Chief Technical Advisor of Income Recovery technical Assistance program, Doekle Wielinga yesterday said that the livelihood of Tsunami affected areas has been recovered to quite a satisfactory level.
He made these observations in launching the “Needs Assessment Survey for Income Recovery” (NASIR) yesterday.
According to him the recovery of lost livelihood is satisfactory in general; an overall 90% recovery rate is shown in the surveyed districts. Among these districts, the highest number of families having the same primary income source as before is reported in the affected families of Colombo district (97%) with the lowest being reported from the Jaffna district (38%). He elaborated that in Kalutara 100% of people have recovered but in Jaffna in due to current situation the recovery rate stood at 55%.
He also said that the strongest recovery has been reported from the fisheries and small business/service sectors which were also seriously affected by the tsunami.
The main objective of this launch is to share knowledge on the economic recovery status of affected communities among the livelihood development agencies.
This is the fourth in the series of the “Needs Assessment Survey for Income recovery conducted in 10 Tsunami affected districts of Sri Lanka during November 2006 covering Ampara, Batticaloa, Colombo, Galle, Hambantota, Jaffna, Kalutara, Matara, Mullaitivu and Trincomalee.
The survey is organized by International Labour Organization (ILO) and the Reconstruction and Development Agency (RADA).
The first assessment (NASIR-1) of the series was conducted in January 2005 as soon after the tsunami to asses the livelihood needs.
And the second assessment (NASIR-2) was carried out in eight affected districts April 2005. In this connection in October 2005 the third survey (NASIR-3) was conducted in nine affected districts and tracked similar indicators of livelihood recovery needs as in previous survey.
Head of Supportive Evaluative Developing livelihood for tsunami affected districts Cynthia Carlon said that the recovery rate of women has significantly increased during 2006 from 65% to 96%. In comparison to men recovery rate it is lower than the women and it is slightly decreasing from 88% to 85%, she concluded.
Director of RADA livelihood Indra Kaushal Rajapaksa said that the survey also reveals that there are still more persons relying on manual labour and on non work sources (government assistance and remittances) than before the tsunami.
He said that families who are out of transitional shelters and are back in houses on their own land are succeeding well economically.
This is reflected through their monthly income (58% of families earning) and the recovery rate for men (lost an income and now working) which is 86%. These families also show the highest employment rate (71%).
“Less people are interested in temporary income and in terms of loans microfinance the demand of loans is very high on of the funds of RADA tries to lobby for special loan scheme, he said.
The Chief Technical Advisor of Income Recovery technical Assistance program, Doekle Wielinga yesterday said that the livelihood of Tsunami affected areas has been recovered to quite a satisfactory level.
He made these observations in launching the “Needs Assessment Survey for Income Recovery” (NASIR) yesterday.
According to him the recovery of lost livelihood is satisfactory in general; an overall 90% recovery rate is shown in the surveyed districts. Among these districts, the highest number of families having the same primary income source as before is reported in the affected families of Colombo district (97%) with the lowest being reported from the Jaffna district (38%). He elaborated that in Kalutara 100% of people have recovered but in Jaffna in due to current situation the recovery rate stood at 55%.
He also said that the strongest recovery has been reported from the fisheries and small business/service sectors which were also seriously affected by the tsunami.
The main objective of this launch is to share knowledge on the economic recovery status of affected communities among the livelihood development agencies.
This is the fourth in the series of the “Needs Assessment Survey for Income recovery conducted in 10 Tsunami affected districts of Sri Lanka during November 2006 covering Ampara, Batticaloa, Colombo, Galle, Hambantota, Jaffna, Kalutara, Matara, Mullaitivu and Trincomalee.
The survey is organized by International Labour Organization (ILO) and the Reconstruction and Development Agency (RADA).
The first assessment (NASIR-1) of the series was conducted in January 2005 as soon after the tsunami to asses the livelihood needs.
And the second assessment (NASIR-2) was carried out in eight affected districts April 2005. In this connection in October 2005 the third survey (NASIR-3) was conducted in nine affected districts and tracked similar indicators of livelihood recovery needs as in previous survey.
Head of Supportive Evaluative Developing livelihood for tsunami affected districts Cynthia Carlon said that the recovery rate of women has significantly increased during 2006 from 65% to 96%. In comparison to men recovery rate it is lower than the women and it is slightly decreasing from 88% to 85%, she concluded.
Director of RADA livelihood Indra Kaushal Rajapaksa said that the survey also reveals that there are still more persons relying on manual labour and on non work sources (government assistance and remittances) than before the tsunami.
He said that families who are out of transitional shelters and are back in houses on their own land are succeeding well economically.
This is reflected through their monthly income (58% of families earning) and the recovery rate for men (lost an income and now working) which is 86%. These families also show the highest employment rate (71%).
“Less people are interested in temporary income and in terms of loans microfinance the demand of loans is very high on of the funds of RADA tries to lobby for special loan scheme, he said.
Monday, April 09, 2007
Sri Lanka on course to meeting its Millenium Development Goals with the exception of halving its poverty levels
Sunday Times: 08/04/2007"
Sri Lanka is on course to meeting its Millenium Development Goals with the exception of halving its poverty levels, according to Richard Vokes, Country Director for the Asian Development Bank (ADB). The Development Forum in Galle earlier this year was abound with discussions on the resilient nature of the country's economy which saw 7% growth in 2006 but Vokes emphasized that the reduction of poverty was still a major challenge.
Vokes, addressing the Key Person's Forum this week jointly organized by the Federation of Chambers of Commerce and Industry in Sri Lanka (FCCISL) and Small & Medium Enterprise Developers (SMED), spoke on rural development and the role of the public and pivate sector.
He attributed the ongoing problem of poverty to lagging rural sector growth, limited productivity growth and low or declining productivity. He said most agricultural growth is limited to the western and central provinces, despite the fact that agriculture contributes 17% of the overall GDP and employs a third of the labour force, approximately 2.3 million Sri Lankans. More private and public sector involvement is needed for rural development as well as more effective and efficient policies. The public sector has a substantial role to play in marketing, extensions, credit programs, fertilizer subsidies and in trade and tariffs.
Agriculture is divided into three main sectors, those being paddy, plantations and agro-industry. Vokes said the paddy sector is 'critical to rural transformation' because what happens there has a direct effect on determining poverty levels. There is also a lot of potential for value added in tea, coconut and rubber but Sri Lanka must work harder on realizing the full potential of value added products.
The agro-industry includes fruit, spices, cashew nuts, herbs, tea and vegetables amongst other commodities and makes up around 50 – 60% of the agricultural GDP and 15% of exports. "There is potential for increased commercialization," Vokes said, adding that recently, the performance in this sector was weak. The prospects for growth and export potential are strong, given that Sri Lanka has the ideal climate and fertile soil. "The agro-industry is important to maintain industrial sector growth," he said. The government has also stated that this is a priority growth area and key to foreign exchange growth.
However, the constraints are numerous and pose serious challenges to development. Vokes said that frequent changes in trade and tariff policies are a hindrance in addition to insufficient labour market regulation, low productivity, lack of skilled labour and an infrastructure which needs much improvement. He cited road development and rural electrification as two areas in need of greater progress, particularly rural electrification which 'opens up opportunities.' Sri Lanka is also weak on research and marketing and as a result, has posted high harvest losses. There is a lack of competition, a lack of market information and a lack of proper storage facilities.
Thailand, which employed contract farming in the 1970's has since taken off, particularly with fruits, vegetables and poultry. In contract farming, an agreement for a fixed price is agreed upon between a company and the farmer and puts in place measures of quality and quantity. The company is responsible for providing the supplies and the farmer is responsible for supplying the land and the labor. The contract farming model is already in place in Sri Lanka but there is potential for it to grow further. Similarly, the supply chain or value added model, an extension of contract farming seeks to raise value added on the entire supply chain.
"The public sector needs to understand the constraints of the private sector and encourage a level playing field," Vokes said. There should be consistent trade policies, effective quality control and certification and the public sector should also encourage PPP's or Public Private Partnerships. Adequate investment must be made in infrastructure, particularly in transport infrastructure and improve packaging in transport.
Sri Lanka is 'world class in many areas' and the private sector has a key role to play. Sri Lanka must work with the World Trade Organization (WTO) to gain access into the first world market and expand its options for commercialization. Vokes said the ADB is providing support for non-traditional crops as well as commercialization, export growth and employment potential.
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Sri Lanka is on course to meeting its Millenium Development Goals with the exception of halving its poverty levels, according to Richard Vokes, Country Director for the Asian Development Bank (ADB). The Development Forum in Galle earlier this year was abound with discussions on the resilient nature of the country's economy which saw 7% growth in 2006 but Vokes emphasized that the reduction of poverty was still a major challenge.
Vokes, addressing the Key Person's Forum this week jointly organized by the Federation of Chambers of Commerce and Industry in Sri Lanka (FCCISL) and Small & Medium Enterprise Developers (SMED), spoke on rural development and the role of the public and pivate sector.
He attributed the ongoing problem of poverty to lagging rural sector growth, limited productivity growth and low or declining productivity. He said most agricultural growth is limited to the western and central provinces, despite the fact that agriculture contributes 17% of the overall GDP and employs a third of the labour force, approximately 2.3 million Sri Lankans. More private and public sector involvement is needed for rural development as well as more effective and efficient policies. The public sector has a substantial role to play in marketing, extensions, credit programs, fertilizer subsidies and in trade and tariffs.
Agriculture is divided into three main sectors, those being paddy, plantations and agro-industry. Vokes said the paddy sector is 'critical to rural transformation' because what happens there has a direct effect on determining poverty levels. There is also a lot of potential for value added in tea, coconut and rubber but Sri Lanka must work harder on realizing the full potential of value added products.
The agro-industry includes fruit, spices, cashew nuts, herbs, tea and vegetables amongst other commodities and makes up around 50 – 60% of the agricultural GDP and 15% of exports. "There is potential for increased commercialization," Vokes said, adding that recently, the performance in this sector was weak. The prospects for growth and export potential are strong, given that Sri Lanka has the ideal climate and fertile soil. "The agro-industry is important to maintain industrial sector growth," he said. The government has also stated that this is a priority growth area and key to foreign exchange growth.
However, the constraints are numerous and pose serious challenges to development. Vokes said that frequent changes in trade and tariff policies are a hindrance in addition to insufficient labour market regulation, low productivity, lack of skilled labour and an infrastructure which needs much improvement. He cited road development and rural electrification as two areas in need of greater progress, particularly rural electrification which 'opens up opportunities.' Sri Lanka is also weak on research and marketing and as a result, has posted high harvest losses. There is a lack of competition, a lack of market information and a lack of proper storage facilities.
Thailand, which employed contract farming in the 1970's has since taken off, particularly with fruits, vegetables and poultry. In contract farming, an agreement for a fixed price is agreed upon between a company and the farmer and puts in place measures of quality and quantity. The company is responsible for providing the supplies and the farmer is responsible for supplying the land and the labor. The contract farming model is already in place in Sri Lanka but there is potential for it to grow further. Similarly, the supply chain or value added model, an extension of contract farming seeks to raise value added on the entire supply chain.
"The public sector needs to understand the constraints of the private sector and encourage a level playing field," Vokes said. There should be consistent trade policies, effective quality control and certification and the public sector should also encourage PPP's or Public Private Partnerships. Adequate investment must be made in infrastructure, particularly in transport infrastructure and improve packaging in transport.
Sri Lanka is 'world class in many areas' and the private sector has a key role to play. Sri Lanka must work with the World Trade Organization (WTO) to gain access into the first world market and expand its options for commercialization. Vokes said the ADB is providing support for non-traditional crops as well as commercialization, export growth and employment potential.