Sri Lanka - Agricultural Commercialization : Improving Farmers’ Incomes in the Poorest Regions

Abstract

The issue of regional differences in
 development has moved to the center of the development
 debate in Sri Lanka, partly after the release of regional
 poverty data. For the past many years, there have been
 significant and increasing differences between the Western
 province and the rest of the country in terms of per capita
 income levels, growth rates of per capita income, poverty
 rates, and the structure of provincial economies. The
 structure of the report is as follows: chapter two looks at
 the poverty/growth/agriculture nexus in the poorest regions
 of Sri Lanka. It presents data on poverty and growth in the
 poorest provinces, especially Uva and Sabaragamuwa, and
 provides an analysis of factors associated with the rural
 poor. Chapter three provides an overview and brief
 discussion of the Government's agricultural policies
 and programs. Chapter four identifies constraints that
 restrict farmers' incomes in the four poorest
 provinces. It presents results from extensive stakeholder
 consultations carried out in these provinces. These results
 are complemented with findings from the 2005 rural
 investment climate assessment to identify some of the
 general constraints in the agriculture sector in Sri Lanka.
 Chapter five presents the findings of an agricultural
 resource audit of small-scale farmers in the poorest regions
 that analyzed production, poverty and market data. The
 chapter identifies income opportunities, in particular for a
 few agricultural products with high income potential for
 poor farmers, whose production could take off with
 appropriate interventions. This chapter also provides a
 value chain analysis of these products and identifies
 product-specific constraints and gaps in the current policy
 portfolio that could potentially limit the Government's
 capacity to support the whole range of needed interventions.
 Drawing on the findings in previous chapters, chapter six
 presents' recommendations. One set of recommendations
 is specific to the three products with high income potential
 and focuses on effective interventions for their production.
 Another set consists of cross-cutting recommendations that
 would further improve performance in the targeted areas but
 also benefit agricultural production more broadly. Chapter
 seven sums up and concludes.