Sri Lanka signs US$125 Million credit to modernize agriculture

Sri Lanka has signed a US$125 million credit with the World Bank to help the country modernize its agriculture sector.  

Sri Lanka aims to make the sector more efficient and attractive as a modern business, more responsive to consumer demand, and more environmentally sustainable and resilient to climate change. Sri Lanka’s agricultural sector has evolved over the past years.  

A major milestone has been the achievement of rice self-sufficiency – a goal of successive agriculture strategies since independence.  But the share of population employed in agriculture has remained around 30 percent over the past decade, even as the sector’s share in national GDP has declined to 10 percent.  This implied and persistent inequality makes it urgent to rethink the direction of agricultural development and explore new opportunities and strategies on how to sustainably increase rural incomes and promote a modern agriculture sector that meets the needs of the upper-middle-income country that Sri Lanka aspires to be.

Idah Pswarayi-Riddihough, World Bank Country Director for Sri Lanka and the Maldives and R.H.S. Samarathunga, Secretary to the Treasury, Ministry of Finance signed the project on behalf of the World Bank and the Government of Sri Lanka.  

She said, “Sri Lanka’s history is deeply rooted in agriculture and its paddy cultivation tradition.  Past practices can inform the future by preserving and building on the country’s farming traditions.  There is now space to diversify and promote high-value, export-oriented food crops.”  She added, ”This shift is crucial for income growth, poverty reduction, reducing inequality and better nutritional outcomes.  The new approach corresponds directly with World Bank Group’s twin goals.”