Annual Report 2008 - Ministry of Finance and Planning

1. Macro Economic Perspectives
29
that prevailed in the first half of 2008. Production increased
due to increased demand for natural rubber in the backdrop
of escalating synthetic rubber prices and consequent price
increases. The prices increased by over 30 percent in the
first half of the year, experienced a turnaround in the second
half of the year with the decline in demand for rubber based
products mainly attributable production cuts by large
automobile manufacturers. Coconut production recorded a
marginal increase of 1.4 percent in 2008. In the first half,
coconut production suffered due to the severe drought that
prevailed in 2007 and the pests outbreak in the Southern
Province, but picked up in the second half and recorded an
annual production of 2,909 million nuts.
The paddy production in Maha 2007/2008 and Yala recorded
an increase of 24 percent to record level of 3.87 million metric
tons. The significant development in the paddy production
can be attributed to the extraordinary growth of 51 percent
experienced in the Yala season which normally records
a relatively lower production. The increase in the extent
cultivated mainly in the Eastern province, continuation of
the Government’s fertilizer subsidy scheme amidst high
international fertilizer prices, the more favourable rainfall in
2008 in almost all parts of the country, the substantial shift
in the consumption pattern from wheat flour to rice with the
average monthly wheat flour consumption reducing by 20
percent contributed to the production increases. This was
also supplemented by the 24 percent increase introduced
to Government minimum purchasing price of paddy from
producers, the successful implementation of government
food program “Api Wawamu - Rata Nagamu”., various
agricultural programmes such as “Yaya” and “Saruketha
Yaya” programmes designed to improve the productivity
through best agricultural practices, use of modern technology,
provision of quality seeds by Agriculture Department also
made a positive impact towards improving production.
The production of minor agricultural export crops such
as cocoa, cloves, coffee increased while production of
cinnamon, pepper and betel declined mainly due to lower
global demand. Cinnamon prices reduced by 30-40 percent
Paddy Harvest in the East
per kg with lower demand from Latin American countries
while import restriction by countries such as India and
unfavourable weather affected the pepper production. A
noteworthy development in minor agricultural exports was
recorded in fruit and vegetable exports in 2008. The value of
vegetable exports increased by over 50 percent while fruit
exports grew by 22 percent. Over 36,000 metric tones of
fruit and vegetables were exported in 2008 indicating the
potential of the sector.
Livestock increased by 5.6 percent with increased diary
and poultry responding to the initiatives taken by the
Government to boost such industries. Local milk production
increased to 208 million liters from 202 million liters in 2007.
The egg production grew by 1.4 percent to 1,413 million eggs
while annual meat production which was at 102,000 metric
tonns also increased by 1.4 percent in 2008. The annual fish
production reached the highest ever level of 319 million kgs
in 2008, a 10 percent increase mainly due to increased fishing
in the East coast due to expedited resettlement programmes
carried out for the displaced, and due to the provision of
fishing gear and nets through various community based
livelihood development programmes initiated to empower
the rural poor. Completion of renovation of all fishing
harbours affected by the Tsunami also contributed towards
improved fish production in 2008.
Ministry of Finance and Planning Sri Lanka
Annual Report 2008