Agri, fisheries and tourism to boost Sri Lanka’s prospects

By Cheranka Mendis, July 2nd 2009, Daily Mirror (http://bit.ly/q5sPm)

Sri Lanka's future economic prospects lies with the growth of the island's agricultural sector which accounts for 34% of the population. Chairman of CIC PLC B.R.L. Fernando made this comment at the Sri Lanka Economic Summit yesterday.

"The scope to develop the agricultural sector is great, with 80% of Sri Lanka's population based in rural vicinities and, especially with the availability of land in the Northern and Eastern provinces, despite the high demand for agro-based products, the contribution to the country's GDP by the agricultural sector is only 15%," Mr. Fernando said. He also pointed out that even with the global meltdown increasing the growth capacity of farmers, the Sri Lankan agricultural sector is lagging behind with key challenges such as the high cost of production, price controls and the low turnout of the poultry industry. The low level of incentives offered to farmers also adds to the present woes. The Chairman of CIC also noted that the cost of production in Sri Lanka is the highest in the world, however the productivity level of the industry also places Sri Lanka as the highest in the region, while the country is near self-sufficiency in the paddy sector. Explaining that even though Sri Lanka was becoming self sufficient in the paddy the country could never be a large scale producer due to the fact that the island nation does not produce high quality produce that is on par with international standards. He also said that even if Sri Lanka commenced producing quality rice the country could never be a large producer.

Therefore there is a need for the proper management of water and the careful use of land available. The use of organic fertilizer will not only contribute with quality capacity but also encourage the dairy industry while proper water management is necessary for cultivators and they should keep in mind that for the production of 1 kilo of rice, 4 tons of water is needed. Private sector integration would also boost the potential of the industry, Mr. Fernando asserted. "Price wise it's very attractive as there is a lot of profit to be made and there is a lot of value addition to the sector. Also the technology and skill competency which would enter along with private sector would boost the industry substantially".

Non Cabinet Minister of Ministry of Agriculture Development and Agrarian Services, Hemakumara Nanayakkara said that allocating land in the North and East could be done in consultation with a specific committee. "We have discussed giving out loans at 8-122 interest rates to farmers, but we have not yet taken any initiative to provide loan scheme for private sectors willing to engage in agriculture". "We are also ready to go into discussion with companies who need land for productive purposes".

Providing an immediate market for existing products, sending procurement and sales agents into regions and exploring the possibility of investing in the sorting and packaging industries along with providing a market guarantee for higher value products and communicating clear quality standards to growers were pointed out as immediate opportunities for participating in the recovery process by CEO of J.E Austin Associates, Kevin Murphy. "Also adding informal value to the product and identification and gaining from unique product attributes are also methods that could be implemented". "Generating vouchers, credit, cost sharing for the first few seasons and extending existing supply and distribution network are other initiatives that could be takenup". "On a more novel perspective, ensuring access to ATMs (in the war affected areas), providing land rights to residents and providing demand side vouchers such as 50% discount for 1 year on in areas such as construction material, fertilizer, seeds and agriculture machinery and cows could benefit the said sectors," Mr. Murphy said. The development of the tourism and fisheries were also discussed at the summit. Secretary to the Ministry of Fisheries and Aquatic Resources, G. Piyasena stated that the new initiatives such as lifting the embargoes which has given way for offshore and deep shore fishing has improved productivity. "26,000 tons of fish were generated as excess supply after the Jaffna requirements were filled on Tuesday," said Mr. Piyasena. Limited resources and the lack of technical skills have hindered a steady progress he said. "We only have 28 fish processing companies but the productivity is low and the lack of transportation facilities is an added dilemma". The Sri Lankan tourism sector, which was also addressed at the forum was said to be 15 years behind the growth and development of other countries. Identification of initiatives that needs to be expedited to facilitate rapid economic growth was highlighted.

Despite all the discussions however, future economic prospects seem to be rather bleak for the moment. Proper plans for development of these sectors seem to be all ideas and plans and up to now little or nothing has been done to actually revitalize the discussed sectors. They say that resettlement process, which is hoped to end in approximately 3 months, would gear up all 'plans' of government and other institutions, which would lobby the actual development plans of the future. Hopefully, this would be done without much talk that seems to be going around at the moment.

Pic by Dinuka Liyanwatte