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Saturday May 18th, 2024

UN calls for urgent change in water-stressed Sri Lanka’s agrifood systems

ECONOMYNEXT – A collective of United Nations food agencies have highlighted an urgent need for Sri Lanka to transform its agrifood systems due to the island nation being a highly water stressed country that also ranks high on the Global Climate Risk Index.

The Food and Agriculture Organisation (FAO), the International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP) at an event held in Colombo to mark the World Food Day called for urgent action towards sustainable and climate-resilient agriculture in Sri Lanka.

In a 2021 report by FAO and UN Water, Sri Lanka was classified as ‘highly water stressed’ with a 90.8-percent indicator, reflecting the significant pressure from human activities on its freshwater resources and their sustainability, a statement from the FAO said.

Total freshwater withdrawal in Sri Lanka, the organisation said, is estimated at 12.95 billion cubic metres annually with about 82 percent of the total withdrawal used for paddy irrigation alone and a little over five percent used to irrigate other crops. Sri Lanka also ranks consistently high on the Global Climate Risk Index, particularly in terms of climate risks associated with impact on water resources.

Considering this the UN food agencies (FAO, IFAD, and WFP) highlighted the urgent need for Sri Lanka to “transform its agrifood systems”.

The event, held on Tuesday October 17, also highlighted the “modern approaches supported by the agencies with potential for national scale-up towards sustainable and climate-resilient agriculture,” the statement said.

Minister of Agriculture Mahinda Amaraweera speaking at the event reaffirmed Sri Lanka’s “unwavering dedication to achieving food security for all”. According to the FAO statement, Amaraweera had emphasised the importance of agriculture and food security as national priorities and stressed the government’s commitment to bolstering the agricultural sector to withstand future climate-induced challenges.

UN Resident Coordinator Marc-André Franche who also spoke at the event said: “In the face of increasing water stress and climate vulnerabilities, sustainable and climate-resilient practices are not just an option; they are a necessity. The United Nations continues to work together with Sri Lanka to fortify its water and food systems and is committed to ensuring a future where everyone has access to sufficient and nutritious food, and where no one goes hungry.”

FAO Representative for Sri Lanka and the Maldives Vimlendra Sharan said: “FAO is committed to working with the government to ensure that Sri Lanka’s agriculture and fisheries sectors are climate-resilient to ensure food security in Sri Lanka for generations to come. We are working with farmers and fishers across the island to reduce waste, pollution, and climate vulnerabilities,” he said.

Sherina Tabassum, IFAD’s Country Director for Sri Lanka and the Maldives noted that climate change has made availability of water for agriculture precarious. Small-scale farmers sometimes do not have enough water, and other times too much, she said.

“That makes irrigation systems increasingly important, so small-scale farmers can continue to produce food with uninterrupted water supply. IFAD works with the government and farming communities to enable farmers to access innovative technologies such as solar-powered tanks as well as to rehabilitate traditional methods like tank cascade systems, so that farmers can cultivate around the year, helping them move from low-productivity subsistence farming to irrigated agriculture that feeds the country,” she said.

“Food security has been in the spotlight in the recent past, but too often we forget that there is no food security without water security,” said Gerard Rebello, Deputy Country Director and Officer in Charge at WFP, Sri Lanka.

“WFP, together with our partners, is supporting the government to make food systems more sustainable and resilient to extreme weather conditions, with emphasis on improving the livelihoods of smallholder farmers, so that food travels uninterrupted from farm to table all year long,” he said.

FAO, IFAD and WFP together with the United Nations system in Sri Lanka are on the ground actively promoting sustainable and climate-resilient approaches towards food security in Sri Lanka, the statement said. (Colombo/Oct19/2023)

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Sri Lanka suffers over $138mn foreign outflow from govt bonds in 2024 after rate cuts

ECONOMYNEXT – Foreign investors have dumped 41.6 billion-rupee ($138.6 million) worth of Sri Lanka government securities in the first 20 weeks of 2024, the central bank data showed, after reduction in the key policy interest rates.

The foreign holding in Sri Lanka’s treasury bills and treasury bonds fell to 75.9 billion rupees on the week ended on Friday (17), May 2024, from 117.4 billion rupees on the week ended on December 29.

The central bank rate has reduced the key policy rates by 50 basis points so far in 2024, extending the rates cut by 700 basis points since June last year.

The rupee appreciated 9.1 percent in the first four months, but the gain failed to attract foreign investors amid a dragged debt restructuring negotiation with external private creditors.

Currency dealers said lackluster demand for dollars due to dampened imports with heavy controls, boom in both tourism revenue and remittances have helped to increase the dollar liquidity in the market, leading to the appreciation of the local currency.

The dealers said foreign investors can earn capital gain if they had bought government securities before the appreciation and now the offshore investors might be selling their bonds.

“They are also discouraged by policy rate cut because that will reduce their returns from the rupee bond investments,” a currency dealer said.

The yield in 12-month T-bills has fallen 336 basis points in the first four months of this year, the central bank data showed.

The central bank also reduced the Statutory Reserve Ratio (SRR) of commercial banks by 200 basis points in August last year to boost liquidity in the market with an aim to reduce market interest rates.

Under tough International Monetary Fund (IMF) conditions for its $3 billion loan program, the central bank raised key monetary policy rates in 2022 and last year to bring down inflation which hit over 70 percent in 2022. The inflation has fallen to the lower single digit now.

The rupee has appreciated to around 300 against the US dollar this week from around 330 level early in November. The local currency was at 365 rupees against the US dollar in early 2022. Depreciation causes capital loss for foreign investors. (Colombo/May 18/2024)

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Sri Lanka’s ‘Sancharaka Udawa’ tourist fair seeks to involve universities

ECONOMYNEXT – Sri Lanka’s ‘Sancharaka Udawa’ tourism fair kicked off this week to promote interaction between industry stakeholders and relevant Government bodies, including the Tourist Police, and also universities.

“Several universities, including Colombo, Uva Wellasa, Kelaniya, Sabaragamuwa and Rajarata were given free stalls to facilitate student interaction with industry professionals,” Chairman of the Sancharaka Udawa Organising Committee, Charith De De Alwis said in a statement.

The event takes place today (18) at the BMICH and houses stalls for hoteliers, tour and transport services, with a goal of attracting 10,000 visitors.

Organized by the Sri Lanka Association of Inbound Tour Operators (SLAITO) and the Sri Lanka Tourism Promotion Bureau (SLTPB), the 11th edition of Sancharaka Udawa offers a platform for both B2B and B2C sectors.

“Sancharaka Udawa houses over 170 exhibitors and a footfall of more than 10,000 visitors,” De Alwis said.

This year’s edition will include participants from outbound tourism sectors to facilitate capacity building. The event provides networking opportunities for industry newcomers and veterans.

“The networking platform offers opportunity for small and medium-sized service providers integrating them into the broader tourism landscape. The anticipated outcome is a substantial increase in bookings particularly for regional small-scale tourism service providers.” (Colombo/May18/2024)

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Sri Lanka’s CEB sells LTL shares to West Coast IPP for Rs26bn

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Electricity Board has sold shares of an affiliate to West Coast Power Company Limited, an independent power producer giving profits of 25.9 billion rupees in the March 2024 quarter, interim accounts showed.

The sale has been carried out as a transfer.

“Twenty-eight percent (28-pct) of share ownership of CEB within LTL Holding’s equity capital has been transferred to West Coast Power Company Ltd for a total consideration of Rs 26 billion as part of a partial settlement of outstanding dues…” the March interim accounts said.

“This transaction resulted in a net gain of Rs25.9 billion rupees which has been recognized and reflected in the ‘Gain from Share Disposal’ in the individual financial statement in CEB.”

LTL Holdings is a former transformer making unit of the CEB set up with ABB where the foreign holding was sold to its management.

The firm has since set up several IPPs.

West Coast Power operates a 300MW combined cycle IPP in Kerawalapitiya promoted by LTL group liked firms in which both the Treasury and Employees Provident Fund also have shares.

Its operational and maintenance contract is with Lakdhanavi, another private IPP. The firm has been paying dividends.

The capital gain from the transfer of shares helped the CEB post profits to 84 billion rupees for the March 2024 quarter.

CEB reported gross profits of 62.7 billion rupees from energy sales and 30.6 billion rupees in other income and gains in the March 2024 quarter. Other income was only 3.1 billion rupees in last year. (Colombo/May18/2024)

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