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Sunday September 24th, 2023

Sri Lanka food security improves across all provinces by 40 percent: FAO, WFP

The second joint FAO-WFP Crop and Food Security Assessment Mission (CFSAM) report on Sri Lanka was handed over to the Minister of Agriculture, Mahinda Amaraweera, by FAO Representative for Sri Lanka and the Maldives, Vimlendra Sharan and WFP Sri Lanka Representative and Country Director, Abdur Rahim Siddiqui

ECONOMYNEXT – Food security in Sri Lanka is improving across all provinces, a United Nations (UN) report said noting that food insecurity has dropped by nearly 40 percent from July 2022.

A Crop and Food Security Assessment Mission (CFSAM) report jointly carried out in February-March 2023 by the UN’s Food and Agriculture Organisation of the United Nations (FAO) and the World Food Programme (WFP) said an estimated 3.9 million people or 17 percent of the population is in moderate acute food insecurity as at May 2023.

This indicated a nearly 40 percent decrease from June-July 2022 with nearly 10,000 people considered severely acute food-insecure at present, down from 66,000 people last year.

A UN statement said on Monday May 29 that the improvement in food security stems from better food consumption, which could be attributed to reduced food prices and improved incomes among farming communities during the harvesting period when the mission was carried out.

Despite the positive trend, however, food insecurity remains high in certain districts, especially Kilinochchi, Nuwara Eliya, Mannar, Batticaloa, Vavuniya, and Jaffna, according to the report. The highest level of acute food insecurity was found within the tea plantation communities in the Estate sector and among daily wage labourers and households who rely on social assistance programmes, such as Samurdhi, as their main source of income.

Production of cereal, including rice and maize, across the two main cropping seasons in 2022/23 is forecast at 4.1 million tonnes, 14 percent below the past five-year average, mainly due to poor plant nutrition caused by an inadequate supply of fertiliser and unaffordability of essential material inputs. However, the UN statement said, essential fertilisers distributed to smallholder farmers by the government, facilitated by funds received from multilateral and bilateral donor agencies, has significantly impacted production, marking an improvement in the yield with productivity in the recently harvested 2022/23 Maha season, 12% higher than the 2022 Yala season.

FAO Representative to Sri Lanka and the Maldives Vimlendra Sharan was quoted by the statement as saying that the CFSAM report is an eye-opener on the continuing vulnerabilities and challenges that exist within the food systems of Sri Lanka.

“This report and its findings will no doubt serve as a guiding light for policymakers and stakeholders to collectively work towards ensuring food security, strengthening agricultural resilience and mitigating risks faced by farmers and rural communities who have been disproportionately impacted by the economic crisis. FAO remains committed to supporting Sri Lanka in their efforts towards achieving sustainable food systems, food security and zero hunger,” he said.

WFP Sri Lanka’s Representative and Country Director Abdur Rahim Siddiqui said: “After many months of challenges, we are finally witnessing an improvement to the country’s food security. “But there is more to be done. A high number of households — more than 60 percent — are adopting negative measures to put food on the table, including borrowing money and purchasing food on credit. WFP will extend its emergency operation, which commenced last year, to provide food rations and cash assistance to people identified as food insecure.”

The joint FAO/WFP Mission jointly recommends providing immediate support to farmers, particularly by releasing available fertiliser stocks to enhance production and productivity in the ongoing Yala season and make urgent policy decisions to import fertilisers in time for the 2023/24 Maha cultivation season.  The report also recommends any move for reducing or removing fertiliser subsidy to be in a gradual and phased manner, giving adequate time to the farming community to adapt.

Other recommendations include the establishment of a “Fertiliser Task Force” to streamline fertiliser procurement and distributions as well as to strengthen adaptive research on climate smart agriculture and sustainable farming practices to improve fertiliser use efficiency. Further, to minimise the impact on the livestock and fisheries sectors, the mission recommends providing adequate support to increase fodder and feed crop production.

Further recommendations include continuing food and/or cash assistance to facilitate access to food among households most vulnerable to food insecurity. In the long-term, increased livelihood support to food-insecure households and resilience-building initiatives are also recommended to prevent them from compromising on productivity and their capacity to cope with future shocks. (Colombo/May29/2023)

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Sri Lanka India industrial zone around Trinco, maritime links mooted

ECONOMYNEXT – Sri Lanka’s Ports Minister Nimal Siripala de Silva had highlighted the desire of both the Governments to work closely to develop the industrial zone at Trincomalee, after accepting an invitation to participate in a maritime summit.

The Global Maritime India Summit (GMIS) will be held in India from October 17-19, 2023 at Mumbai where Sri Lanka has been invited at a partner country.

At a curtain raiser event on September 22, India’s High Commissioner in Colombo, Gopal Baglay had said both countries were working on enhancing sea connectivity according to a vision document launched during a recent visit of the President of Sri Lanka to India.

Minister de Silva will lead a delegation from Sri Lanka to the summit.

Secretary to the Ministry of Ports, Shipping and Waterways, Government of India, T K Ramachandran said the Global Maritime India Summit aims strengthen the Indian maritime economy by promoting global and regional partnerships and facilitating investments.

The event will give an opportunity to the Government of Sri Lanka to attracting greater investment from India in development of its maritime infrastructure, Ramachandran said.

It will also facilitate greater business to business interactions. (Colombo/Sept24/2023)

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Sri Lanka brings back import para tariff on milk

ECONOMYNEXT – Sri Lanka has brought back an import para tariff called the Ports and Airports Levy, to several grades of milk powder.

Milk powder has been removed from a list of PAL exemptions, making them liable for a 10 percent tax.

The PAL para tariffs are also a contentious issue in terms of export competitiveness, and the government has previously given undertakings that they will be eliminated.

Trade freedoms of the poor figure in an IMF/World bank reform program with the governments.

Milk is a protein rich food, in a country where children of poor families are facing stunting and malnutrition.

Economic nationalism is seen at high levels in food, with several businessmen are pushing for trade protection, amid an overall autarkist (self-sufficiency) ideology, going directly against policies followed in East Asia, which the same as hold up as examples.

Sri Lanka keeps dairy product prices up ostensibly to bring profits to a domestic dairy company and farmers.

Sri Lanka also keeps maize prices up, ostensibly to give profits to farmers and collectors. (Colombo/Sept22/2023)

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Sri Lanka govt warns liquor manufacturers: pay defaulted tax or lose licence

ECONOMYNEXT – Sri Lanka government which is struggling to raise the state revenue despite   higher taxes, has warned liquor manufacturers to pay defaulted taxes or lose their licence.

The government is now getting tough with past tax defaulters amid concerns over falling short of this year’s revenue target agreed with the International Monetary Fun (IMF).

“Liquor manufacturing firms owe us 660 crore rupees (6.6 billion rupees),” Siyambalapitiya told  reporters on Thursday (21).

“Most of this or around a third is the only excise tax amount to be paid. The rest is penalty. If a liquor manufacturer does not pay on time, we impose a penalty of 3 percent per month This means 36 percent (penalty) per annum,” he said.

“We have given them deadline to repay the basic excise taxes. If they don’t pay, we will cancel their licence.”

President Ranil Wickremesinghe’s government committed an ambitious revenue target among many other reforms to the International Monetary Fund (IMF) in return to a $3 billion loan package.

However, the revenue could face a short fall of 100 billion rupees, State Finance Minister Ranjith Siyambalapitiya has said.

A new Central Bank Act also has legally prevented the government of printing money at its discretion as  in the past.  (Colombo/September 24/2023)

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