Annual Report 2010 - Ministry of Finance and Planning

Ministry of Finance and Planning Sri Lanka > Annual Report 2010CoconutThe lowest coconut production duringthe last decade, 2,317 million nuts,was recorded in 2010, which is 16.1percent reduction from the productionof 2,762 million nuts compared to2009. The annual requirement of thecountry for consumption, exportsand industries is around 3,000 millionnuts but the coconut industry is notable to meet this requirement underpresent conditions. This situationbecame worse in 2010, which resultedin soaring prices of coconut in thedomestic market. Land fragmentation,Weligama coconut leaf wilt & rotdisease, low fertilizer application,availability of older coconut treeswith low productivity, unavailability ofhigh yielding and productive coconutplants, and weather condition havemade negative impacts on coconutproduction. This position led theGovernment to take appropriateintervention to recover the coconutproduction. In order to mitigate thecomplex effect on the economy andthe political and social life due tohigh prices in coconut, particularlythe living standard of the people, theCabinet of Ministers, in December2010 approved the proposal to provideunmixed fertilizer, Urea and MOP 50 kgbag each, at a subsidized price of Rs.1,000/-.Purchasing ProgrammesPaddySri Lanka is now reaching selfsufficiency in paddy production asexpected for decades. Therefore, it isthe responsibility of the Government toensure the opportunity price of paddyfor farmers during the harvesting timethrough a comprehensive programme inorder to provide an appropriate price tothe farmers while avoiding the suddendrop of purchase price of paddy in themarket.Table 6.10 > Annual Coconut Production 2005 - 2010YearAnnual Production (Mn nuts)2005 2,5152006 2,6842007 2,8052008 2,9092009 2,7622010 2,317Source: Coconut Development Authority, Coconut Research InstituteIn 2010, the annual paddy productionwas recorded to be 4,300,620 Mtand the Government launched anew programme to purchase paddythrough the Paddy Marketing Boardwith the assistance of the State Banksand the respective District Secretaries.The ultimate objective of thisprogramme was to maintain a bufferstock of 200,000 Mt of paddy whichis assumed to be sufficient for nationalconsumption of three weeks. This isin addition to the stocks with theco-operative societies. During Maha2009/10 and Yala 2010, the PaddyMarketing Board was able to store182,000 Mt of paddy in total which isa 91 percent achievement of the settarget. In order to achieve this targetthe Paddy Marketing Board increasedthe number of collection centers up to250. The Treasury in collaboration withthe state financial institutions incurredRs. 5,580 million on purchasing paddyat a Government certified rate of Rs.28/- per kilogram of Nadu and Rs.30/- per kilogram of Samba. As aresult of this programme, the marketprice of rice was stabilized at lessthan Rs. 70/- per kilogram during2010.Sri Lanka is nowreaching selfsufficiency inpaddy productionas expectedfor decades.Therefore, it is theresponsibility ofthe Governmentto ensure theopportunity priceof paddy forfarmers duringthe harvestingtime through acomprehensiveprogramme...301