After the restoration of peace and a pluralistic civil administration in the Eastern Province, investor confidence is returning and it is likely that GDP will grow in what is potentially one of the most productive areas in the country. With the state investing in key infrastructural projects like roads, electricity and schools, after the liberation of the area from terrorist control and influence, the private sector has also begun to focus on the East. A few key projects, as described below, should act as a spur to further involvement and investment.

Rs. 8000 million for farmer development from Cargills
Cargills Ceylon Limited together with the Ministry of Nation Building and the World Bank will launch a mega Rs. 8000 million project to develop agriculture and livestock sectors with a buy back arrangement. This strategy will ease the problem of market access that is experienced by small and medium time entrepreneurs across the country. Cargills is planning to focus on vegetables, rice, fruits, fish and milk, and with the buy back arrangement to avoid middlemen and thus the escalation of costs.  As a consequence of this unique programme, farmers are paid 20% more than the market price, and this minimum guaranteed price will help farmers plan their cash flows. This will reduce the burden on them and encourage the confident application of good agricultural practices like the use of fertilizer.

Hayleys investment in Agriculture

Hayleys Agro which already had a presence in the Eastern Region will focus on driving advanced technology into the Eastern Region and thereby increasing productivity levels in the agricultural sector.  The company will train farmers in the use of biotechnology to produce high yielding crops such as banana, pineapple, strawberry and related fruits so that it can get the best from the rich soil quality of the Eastern Province. Hayleys is the market leader for products such as crop protection chemicals, insecticides, fungicides, weedicides, vegetable seeds, paddy and seed potatoes, agri equipment including sprayers, tractors and micro irrigation systems. This will help the farmer community by promoting technology so as to get the best returns.

CIC puts 750 million into fruits and dairy products

5000 growers in the Eastern Province will benefit from focused investment in a banana cultivation project by CIC, the Agri-specialist in Sri Lanka. The investment will cover an over 15,000 acre area close to Kantale River. The project will provide employment to 10,000 farmer families and the target is to export 200,000 tons of bananas and other fruits a week. This will mean Rs 4 billion worth of foreign exchange into the country, which will help propel Eastern Province GDP growth to double digits in the years to come.

The company will also establish another joint venture project with the government for a 2200 acre dairy farm project on a 49/51 per cent partnership basis at Mutuwalla in the same province. The investment for the project, which will produce more than 2000 liters of milk a day, will be Rs 250 million. The project will attract 1000 outgrowers in the area and the company will purchase 3000 liters of milk from them.

Apart from milk CIC intends to produce 2000 tons of compost fertilizer and 8000 tons of maize on the farm itself, to ensure diversity for the total investment.

The company has a lot of plans to move into other areas of agriculture, including rice, to penetrate into export markets in the world. It also promotes Agro Tourism and is interested in driving this in the Eastern Province. CIC specializes in soil testing and has a tissue culture laboratory in Dambulla, whilst also operating an Agro Holiday Home in Polonnaruwa. The East is full of potential for all these activities, and along with Cargills and Hayleys, CIC has taken the opportunity to be one of the pioneers in the field.

Economic Affairs Unit, Secretariat for Co – ordinating the Peace Process (SCOPP)