The International Fund for Agricultural Development (IFAD) and the Government of Sri Lanka signed a financing agreement last week to launch the Resilience Building and Small Agribusiness Development Project Farmers.
The project aims to tackle the effects of climate change on some 40,000 small farmer families, increasing their resilience and promoting the commercialization of agricultural products.
Improving rural livelihoods, boosting food security and increasing resilience to climate change in the arid area of the country are critical for Sri Lanka to eradicate persistent pockets of poverty across the country. The project’s development goals are in line with national priorities and are critical to achieving the Sustainable Development Goals.
The six-year project will mobilize climate-sensitive investments and work with smallholders to create and scale inclusive value chain climate-resilient agricultural activities.
The project will be developed in six districts of the arid zone, namely Anuradhapura, Vavuniya, Matale, Mannar, Puttalam and Kurenagala. Among the basic products that could be included are goats, dairy products, chili and fruits and vegetables, as well as more specialized crops such as aloe vera and moringa, betting on variety in order to mitigate the risks of climate change .
Sherina Tabassum, IFAD Country Director for Sri Lanka said, “In Sri Lanka, we are seeing heavier and less predictable rains, as well as heat waves and prolonged dry spells. Rural households in the arid zone are greatly affected by these changes in climate. Farmers in these hotspots are highly exposed and vulnerable and need our support. In collaboration with the Government, IFAD will help them build resilience, respond to climate change and create linkages with markets.”
80% of Sri Lanka’s 21.6 million people live in rural areas, which is the largest proportion in South Asia. Most rural households in the arid zone base their livelihoods on irrigated agriculture using small reservoirs.
Small farmers who cultivate with these irrigation systems in rural communities are poorer and more vulnerable to the effects of climate change than farmers in arid zones with access to large irrigation systems. Climate variability and extreme events further affect crop productivity and yield, leading to greater poverty. To make up for the food deficit, small farmers have to buy food to eat,
Producer organizations and river basin associations will learn to manage climate risks. Women, youth, group organizations and social enterprises will also benefit from support in running businesses in an economically profitable and sustainable way.
The total cost of the new project will be USD 42.7 million, with IFAD providing a loan of USD 41.7 million and a grant of USD 1 million. For its part, the Government of Sri Lanka will contribute USD 12.7 million, while project participants will make a contribution of USD 13.2 million. The private sector will contribute USD 1.7 million, while UNDP, WFP and UNOPS also contribute USD 8.8, 2.6 and 0.3 million, respectively.
IFAD has been an important partner in Sri Lanka’s rural development program for decades: its first loan agreement with the Government of Sri Lanka dates back to 1978. Since then, the Fund has supported 19 rural development projects worth US $ 340 million. These interventions have directly benefited 654,832 rural families.