Agriculture Sector Modernization Project
The World Bank funded Agriculture Sector Modernization Project is aligned with the Country Partnership Strategy (CPS) 2013-2016 (Report 66286-LK, May 22, 2012). The project seeks to contribute to two CPS focus areas, namely: “Supporting structural shifts in the economy” and “Improved living standards and social inclusion” through: (a) improving agricultural productivity and competitiveness to strengthen the links between rural and urban areas and facilitate Sri Lanka’s structural transformation; (b) providing and strengthening rural livelihood sources, employment opportunities in agriculture and along agriculture value chains, as well as market access for the poor, bottom 40 percent, and vulnerable people, thereby improving income sources and livelihood security in lagging rural areas; and (c) contributing to improved flood and drought management, through project’s linkages to the water and irrigation sectors and a climate-smart agriculture approach. The project is alsoto promote diversification, value addition and increased competitiveness in the agriculture sector.
The development objectives of Agriculture Sector Modernization Project for Sri Lanka are to support increasing agriculture productivity, improving market access, and enhancing value addition of smallholder farmers and agribusinesses in the project areas.
This project has three components.
(01) The first component, Agriculture Value Chain Development, seeks to promote commercial and export-oriented agriculture; attract and leverage investments from farmer producer organizations and agribusinesses for high value agriculture production and value addition; and provide the enabling environment, incentives, and access to finance for such investments through matching grants, technical assistance support, linkages to the commercial banking sector, and a Partial Credit Guarantee (PCG) facility. It has three sub components as follows: (i) investment preparation support; (ii) matching grants to farmer producer organizations and agribusinesses; and (iii) partial credit guarantee.
(02) The second component, Productivity Enhancement and Diversification Demonstrations, aims at supporting smallholder farmers to produce competitive and marketable commodities, improve their ability to respond to market requirements, and move towards increased commercialization. It has four sub components as follows: (i) farmer training and capacity building; (ii) modern agriculture technology parks; (iii) production and market infrastructure; and (IV) analytical and policy advisory support.
(03)The third component, Project Management, Monitoring and Evaluation, will support the Project Management Units (PMUs) of Ministry of Primary Industries (MOPI) and Ministry of Agriculture (MOA) and the Provincial Project Management Units (PPMUs) in the participating provinces in project management and coordination, technical supervision, financial management, procurement, social and environmental safeguards, and monitoring and evaluation.