Sri Lanka - Agricultural sector survey (Vol. 1 of 4) : Summary and main report

DOC-uMiENT OF INTERNATIONAL BANK FOR RECONSTRUCTION ANTD DEVLTOPMEN?T INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use Report No. PA= 134a AGRICULTURAL SECTOR SURVEY THE REPUBLIC OF SRI LANKA (in four volurnes) VOLUME I SUMMARY AND MAIN REPORT February 8, 1973 ASIA PROJECTS DEPARTMENT I This report was prepared for officiai use only by the Banlk Group. It may not be pub'ished, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the Iaccuracy or completeness of the report.  GLOSSARY CU-RRENCY EUfJIVALENTS Par Rate: US$1.00 = Rs 5.95 Rs 1.00 US$ 0.17 FEEC Rate: US$1.00 Rs 9.23 Rs 1.00 = US$0.10 WEIGHT AND tEASURES (British system) 1 long ton 2240 lbs = 1.016 metric tons 1 hundredweight (cwt)= 112 lbs = 50.8 kg 1 bushel (bu) 45 lbs (nf npddv) 1 pint = 0.57 liters 1 ar-r 0 An; h ARRBREVTATTOnN >9E = Ministr} of P1~A. anning, an.d Em-pilo-yment MAL = Ministry of Agriculture and Lands MPI iT s t of . P1an t a tl onTnlus-ies MIPlI = Ministry of Irrigation, Power and Hig'hways IF T - 4Min4stry of Forcign and Internal Trade CWE Cooperative Wholesale Establishment GnCX = Guiaranteed Prico Schieme FDEC = Foreign Exchange Entitlement Certificate  This report is based on findings of an agricultural sector survey mission that visited the Republic of Sri Lanka in October-November 1971. Mission members were: Mission Leader R.P. Christensen Deputy Leader A.K. Stapleton Tree Crop Economist J. Bevan Agricultural Economist B. A. Nekby General Economist B. B. Phradham Commodity Analyst B. Varon Tree Crop Agronomist J. Greenwood (consultant) Agronomist P. Judd (consultant) Fisheries Specialist E. Kvaron (FAO) Livestock Specialist 0. Masterton (FAO) The report does not cover changes in agricultural conditions that have t:aken place since November 1971.   BACKGROUND DATA US$ 1.00 (par rate) .............................. Rs 5.95 USS 1.00 (FEEC rate) . ... . * *,...- Rs 9.23 Rs 1.00 (par rate) .................... . ........ . US$0.168 Rs 1O() (FEEC *ate) ...- US$0.103 Total population (1971) ...................... 19.747 million Rural populationi (1971) . .............................. 10.232 Tflabl.or for::e (19,71) ................................. 4,.500 '1 Employment in agriculture (1971) ...... ................ 1.977 Share of labor force in. agriculture (19.71) .........d .... Jf. 54% Share of'agricuLtural force unemployed (1971) ....... .. 12% Rate of popul"at-Lon grow"L (1^10410) ........................... 2.4 p.a Population density (1971) - total area ... ........... 194 p km2 2 - arable area ........ ..... 33 p IbU Gross diomet-ic prod-uuct kofficial estimates) Total at rcirrent prices (197OI ... ** .............. PR 12, c iii1ofl Rate of grawth at constant prices (1960-70) ...... 4.5% GDP per capita (197n) - total ........ ..................U........ US$155 - :!n --riculture ..........I , ....... TISI nC Annual agricultural output growth rates (1960-70): Total agricultural output ............ ... .......... 3.0% Paddy ................................................. 5.8%0 Coconuts ................... ...................... -0.1% .ea ..... 0.7h Rubber .... ..................... 5.8% Main agricultural exports .......................... Tea, rubber, coconut products Main agricultural imports .......................... Rice, wheat flour, sugar, ftish, dairy products Agricultural exports, share of total exports (1970) ... 95% Food imports, share of total imports (1970) ........... 47% Agricultural trade (US$ million): 1960 1965 1970 Agricultural exports 348 376 302 Food imports 144 172 181 Balance 204 204 121  -2- Land use in 1970: thousand A-ri cul ture4,206.6 L A. L.~~~~~~~~~.'). TLree crops I250 ('.7) Field crops (1,750) (10.9) Forest 8,210 51.3 Other 2,,480 15.5 Total 16,OOp 100.0 Gross acreages f major crops (thousand acres): 1960 1965 1970 Paddy 1,468 1,455 1,876 Coconuts 1.070 1,152 1,152 Tea 582 594 597 Rubber 668 569 569 Production of malor crops: 1960 19.65 19707 Paddy (million bu) 43 36 77 Coconuts (million nuts) 2,183 2,676 2,447 Tea (mil1iw 1b 435 503 (68 Rubber (million lb) 218 261 351 TLivest-npk n,nnhp A8! (thnllRannd hesati 196n 1965 1970 Cattle 1,552 1,904 1,593 Buffalo 813 1,051 736 17 lnQ Sheep 52 35 27 Fertilizer consumption (thousand tons of nutrient): 1965 1970 N 35.8 52.6 r2v5 I.7 1*94 2 5 30.0 29.0  TiiE RKPUBLIC OF SRI LANKA AGRICUULTUKAL SECTOR SURVEY -MAIN REPORT TABLE OF CONTENTS Pa,e No. I. INTRODUCTION .......................................... 1 II. BACKGROUND ............................................ 2 A. The Role of Agriculture in the Economy ........... 2 B. Natural Resources and Land Use .............. 5 C. Structural Organization ..... ............. 8 D. Recent Agricultural Performance ................ .. 11 III. DEVELOPMENT POLICIES AND PLANS ........................ 14 A. Evolution of Development Policies .... ............ 14 B. The Role of the Public. Sector .................... 15 C. The Five Year Development Plan .... ............... 17 IV. DEVELOPMENT STRATEGY AND POLICY ISSUES ....... ......... 24 A. Export Expansion ...... ........................... 25 B. Crop Diversification and Intensification of Land Use ................................. ... 26 C. Capital Formation and Investment .............. ... 29 D. Prices and Subsidies ..... ........................ 31 E. Irrieatfon and Golonizarinn Policy-- ----- - - . --5 F. Farm Services .................................... 40 G. r.and Tenure and Agrarian Reform --- - 42 H. Ilechanization .................................... 44 I. Smallhn1tdrPrn Pn lon -. .46 J. P?rotein Availability ............................. 47 V. PROSPEICTS FOR AGRICULTURE ......... .................... 50 A. * Tree Crops ....................................... 51 R B Field Crops ............................. ,54 C. Livestock ......... ..................... 57 D. ]?isheries -59.............................. Vl INVESTMENT AND PRE?INVESTMENT .QUIoRM...................... 59 A. Th.e Current investment Pro.grms ................... 59 B. Major Investment Requirements ................... . 60 C. Minor Investment Requirements . . 65 D. Long Term Opportunities .......................... 66 E. Preinivrestm-ent Requiremen.ts ..67  MAPS 1. Physical and Administrative Regions 2. Population Distribution 3. Land Utilization 4. Livestock Producing Areas VOYLUMES II ANNEX 1: Natural Resources and Land Use ANNEX 2: Field Crops VOLUME III ANNEX 3: Tree Crops VLUMI.E IV ANNEX 4: Livestnck and Afrint1ursr ANNEX 5: The Fishety Sector A?NNEX 6 Government Po14,e.4 ANNEX 7: Statistical Appendix  THE REPUBLIC OF SRI LANKA AGRICULTURAL SECTOR SURVEY SUMKARY The Role of Agriculture in the Economy Agriculture plays a major role in the economy of Sri Lanka thi:ough its large c,ontributions to GDP, foreign exchange earnings, and government revenue. In 1970, the agricultural sector accounted for 35% of GDP, oves 90% of export earnlings, and 50% of total employment according to official estimates. Valued at world market prices, agricultural products actually account for 44% of iGDP. Much emplovment in manufacturing,! transport and service industries is based on agriculture. The rural population, nearly 80% of the total in 1971. is almost completely dependent upon agriculture for its livelihood. Ariculture's Share of the Economy Percent of Tea Exports as Percent Percent of Percent of Total of Total Export Employment GDP Export Value Value 1960 52.g-- 38.5 93.4 61.7 1965 52.2-L?. 36.7 93.4 63.2 1970 50.2L - 34.7 90.0 56.1 1 1963. 12 1q68. /3 1971. Source:' Dep t. of Cesus and3 atat-st8 s rC * %d of TSa Source: D%Al:. of o^;a and . Statistics