IntroductionKey Sectors For Investment - Agriculture
Overview
There are significant opportunities for investors in the agriculture sector both for the domestic market and for value added exports. The agriculture sector plays a key role in the country’s economic development and its new role has been redefined in the light of the development goals of the nation.
The agriculture sector contributes 12% to the GDP of the country, 25% of total export earnings and 30% of national employment in the year 2010.
The three main traditional export crops from Sri Lanka are Tea, Rubber and Coconut. Since these industries are already well established, the main focus of BOI is in terms of developing other agricultural crops particularly by enhancing domestic value additions. The government looks to specialised investment to improve productivity, level of technology innovation, access to international markets, use of quality seeds and planting materials and improve overall value addition. Some of the opportunities include:
Horticulture: Sri Lanka aims to be recognized as one of the best horticulture produces in the world. In cut flower production there are opportunities for investors who can bring in new hybrid varieties imported from overseas which can be used as mother plants and modernised with tissue culture technology. Similarly opportunities are available to produce fruits and vegetables for the export market such as the Middle East, Japan including by the use of out grower system.
Enhancing of values addition
There are many areas in which value addition can be enhanced in the agro based sector for e.g Sri Lanka has been one of the largest exporters of varity spices. However much of the exports has been in raw commodities form. The government encourages the induction of investors who can enhance the domestic value addition in Sri Lanka so that these items are exported in high value forms.
Fisheries: Sri Lanka has considerable fisheries potential in offshore/deep sea, inland fisheries and aquaculture. The fisheries sector contributes around 1.2 per cent to GDP and employs over 650,000 people directly and indirectly through related activities.
Livestock: The livestock sector consists mainly of the dairy and poultry sub-sectors, which are considered as priority areas for growth, employment generation and increasing income of rural farmers. The livestock sector accounted for about 1 per cent of GDP in 2009. About 670,000 smallholders are engaged in the sector. As of 2009, local milk production covers only 33 percent of the national consumption. Around 63,876 mt of milk and milk products valued at over US$ 296 have been imported in 2009 and it represented 2.1 percent of Sri Lanka’s food imports.
Overall, Sri Lanka has much to offer both local and foreign investors in the Agriculture, Livestock and Fisheries sectors including diverse agro zones for agro based industry and access to a large fishing area.