IFAD to launch Smallholder Agribusiness and Resilience Project

By Paneetha Ameresekere | Published: 2:00 AM Jun 18 2021

By Paneetha Ameresekere

UN’s Rome based International Fund for Agricultural Development (IFAD) together with the Government of Sri Lanka last week signed a financial agreement to launch the Smallholder Agribusiness and Resilience Project (SARP), IFAD said on Tuesday (15). With total funding of USD 42.7 million, IFAD is providing a USD 41.7 million loan and a USD 1 million grant for the new project.

 In addition, the Sri Lankan Government is providing USD 12.7 million, with a further USD 13.2 million contributed by project participants themselves. The private sector will provide USD 1.7 million, while UNDP, WFP and UN Office for Project Services (UNOPS) are also contributing USD 8.8 million, USD2.6 million and USD 0.3 million, respectively. 

The project aims to address the impacts of climate change on about 40,000 smallholder families, building their resilience and promoting agriculture commercialisation. The six-year project will mobilise climate-sensitive investments and work with smallholder producers to build and expand agricultural activities that are climate resilient and part of inclusive value chains. 

The project will operate in six districts in the dry zone, namely Anuradhapura, Vavuniya, Matale, Mannar, Puttalam and Kurenegala Districts. Potential commodities include dairy, chillies and fruits and vegetables, as well as more specialised crops like aloe vera and moringa – a wide range to mitigate the risks of climate change. Producer organisations and watershed associations will learn to manage climate risks. 

Women, youth, group organisations and social enterprises will also benefit from support in managing enterprises in a financially profitable and sustainable way. Improving rural livelihoods, boosting food security and building climate resilience in the country’s Dry Zone, are key to enabling Sri Lanka to eradicate persistent pockets of poverty across the country, IFAD said. ‘We’re increasingly seeing heavier and less predictable rains, hot spells and extended dry periods in Sri Lanka. 

Rural households in the Dry Zone are acutely affected by these changes in climate,’ said Sherina Tabassum, IFAD Country Director for Sri Lanka. “Farmers in these ‘hot spots’ are highly exposed and vulnerable and need our support. Working with the Government of Sri Lanka, IFAD will help them build resilience, respond to climate change and link them to markets,” she added. Eighty per cent of Sri Lanka’s 21.6 million people live in rural areas, the largest share in South Asia. 

Most rural households in the Dry Zone depend on small tank-based irrigated farming for their livelihoods. Smallholder farmers cultivating under these village irrigation systems are poorer and more vulnerable to the impacts of climate change than Dry Zone farmers with access to major irrigation. 

Climate variability and extreme events further hit productivity and crop yields, dragging them deeper into poverty. To make up for food deficits, smallholders have to buy food to eat which leads to more debt and further hinders their ability to cope with climate risks. IFAD has been a partner for Sri Lanka’s rural development agenda for decades – its, first-ever loan agreement was with the GoSL was made in 1978. Since then, IFAD has supported 19 rural development projects worth $340 million. These interventions have directly benefited 654,832 rural families.

By Paneetha Ameresekere | Published: 2:00 AM Jun 18 2021

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