Development of Agribusiness Enterprises - Asian Productivity ...

extrusion cooked products. This type of product is now being manufactured by a few foodprocessing
industries in Sri Lanka.
Bottling and canning technology for toddy has been introduced and one enterprise is
exporting small quantities to Canada and Europe. Although the cultivation of medicinal
herbs and herbal tea has been practiced from ancient days, the technology for packaging
ready-to-brew herbal tea was introduced only recently.
The manufacture of geo-textiles from coir yarn to help efforts to prevent soil erosion
is another new product that was recently introduced. Technology for producing coir dust
blocks, coir dust logs and coir dust mats has been introduced by the Industrial Development
Board for use as water retainers in soilless cultivation.
The Industrial Technology Institution has developed technology for making instant
hoppers, instant cakes and weaning food. The Industrial Development Board has introduced
technology for producing special rice flour for use in instant string hoppers.
Machinery Development
The National Engineering Research and Development Centre (NERD), the Department
of Agriculture, the Engineering Division of the Industrial Development Board, the Rice
Processing and Research Development Centre, NGOs such as Sarvodaya (which promotes
self-help activities including agribusinesses), the Intermediate Technology Group and the
Agricultural Machinery Manufacturing Association have all developed various types of
machinery for agriculture and agro-industries.
In 1999, the Department of Agriculture introduced a manually-operated lowland paddy
seeder, a rice reaper, a rice seeder, mechanical weeders for upland situations, a grain and
legume processing machine and a fruit harvester. NERD has introduced dryers for drying
genlow and other commodities, and a baking oven, while the Industrial Development Board
has fabricated a popcorn machine, a vegetable cutter, a coir yarn-making machine, a noodlemaking
machine, a press and fitter for cashew apple juice, a coir balling machine and a turbo
cleaner.
CONSTRAINTS ON THE GROWTH OF AGRIBUSINESS ACTIVITIES
Most of the agricultural and processed products from small-scale manufacturers are
marketed through middlemen. This marketing chain has, in most instances, deprived agroprocessors
of the opportunity to purchase safe, quality agro-products at reasonable prices.
Therefore, an effective agricultural extension service is required in order to provide technical
and marketing information to agro-processors. At the same time, agro-processors should be
encouraged to enter into “forward contract agreements”, which will benefit both parties.
Another problem faced by agro-industry is fluctuations of agricultural commodity
prices due to uneven production patterns in the course of the year. For example, in 1999, the
price of tomatoes in the wholesale market varied from SL Rs.7.24 to SL Rs.43.25 per kg. As
a result, agro-processors were unable to cost their products properly. Again, if the forward
contract agreement concept is implemented, this problem can be solved.
The lack of modern technology has seriously affected production cost levels, both in
agriculture and agro-processing. One of the major problems faced by the agribusiness/agroindustry
is the non-availability of the right product varieties at the right time for processing.
For example, Sri Lankan farmers grow tomatoes, chilies, papaya, etc. that are not in demand
by the export market. Major companies have to import tomato pulp from Australia. The
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