Local agri sector gets fresh boost from additional EU funding

• Funds to be administered by World Bank
• Five districts will receive support for agri cluster expansion
• Over 25,000 additional beneficiaries to receive support via new grant

Sri Lanka’s agriculture sector is slated to receive fresh impetus with the Ministry of Finance and the World Bank (WB) having signed a new grant from the European Union (EU).

The grant that will support the Agriculture Sector Modernisation Project (ASMP) is part of EU’s EUR 25 million support to the US$ 125 million project.

The funds will be administered by WB and will support the expansion of agriculture clusters in five districts: Kandy (Central Province), Badulla (Uva Province), Ampara (Eastern Province), and Killinochchi and Vavuniya (Northern Province).

According to the WB, the new grant will assist Sri Lanka prepare for recovery from COVID-19 as it will help contribute to export revenues and assist in creating high quality jobs in agro-processing.

It added that the increased investment will also assist in expanding opportunities for inclusive livelihood support in rural areas, and provide essential food items.

Furthermore, the extra funding from the EU is expected to support a total of 25,000 additional beneficiaries, including 6,000 direct members of farmer producer organizations.

WB Country Director for Maldives, Nepal and Sri Lanka Faris H. Hadad-Zervos, commenting on the new grant, stressed that the country’s agriculture sector will continue to underpin rural livelihoods and enable the country to rise to future challenges.

“Agriculture is important for Sri Lanka’s economy, and we continue to work with all our partners to promote inclusive and resilient growth, through increasing agricultural productivity, farmer incomes and creating jobs in the sector,” he said in a statement to the media.

Meanwhile, EU Ambassador to Sri Lanka and the Maldives Denis Chaibi pointed out that by contributing to the agriculture sector modernisation programme, the EU aims to support smallholder farmers, promote new farming solutions to boost productivity and create more jobs.

The Agriculture Sector Modernisation Project, since its inception in 2016 has supported the government’s efforts to increase agriculture productivity, boost value addition of smallholder farmers and agribusinesses and to improve their access to markets.

The project also supports agricultural diversification and technology improvements. The project has so far benefitted more than 48,000 smallholder farmers across the country and has created more than 1500 new jobs through investments in agribusiness organisations. 

The current World Bank portfolio in Sri Lanka consists of 19 ongoing projects, with a total commitment value of US$ 2.33 billion in a variety of sectors including transport, urban, agriculture, water, education, and health.

The EU has provided over EUR 1 billion in grants so far to Sri Lanka to support and accompany local efforts for recovery and reform processes in a wide range of areas including poverty reduction, democratic governance, local development, agriculture, water or health.