Annual Report 2010 - Ministry of Finance and Planning

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Ministry of Finance and Planning Sri Lanka > Annual Report 2010to provide Thriposha to all deservingmothers who are 1.1 million of populationaccording to the budget proposalof 2011. The allocation for ThriposhaProgramme was increased from Rs. 1,100million to Rs. 1,500 million by the Budget2011.Furthermore, soya bean is used toproduce poultry feed in the formof Soya Bean Meal. At the momentthis meal is imported incurring aconsiderable cost. Therefore, if thismeal can be developed internallythe demand for soya beans can beimproved while developing the Soyabean meal production locally.Other ProgrammesFacilitatedMaizeThe annual requirement of maize is228,000 Mt of which 200,000 Mt isconsumed by the livestock sectorwhile 28,000 Mt is used for humanconsumption. A greater share ofhuman consumption is utilized for“Thriposha” production. Since the“Thriposha” programme was expandedto cater all the deserving mothers, thedemand for maize is rising. Import ofmaize is 27,200 Mt for 2009 and 9,571Mt for 2010 showing a decreasingtrend. By 2015 it is targeted to reachthe production level of 270,320 Mtwhile decreasing imports gradually.Poultry IndustrySpecial attention was given to boostthe poultry industry and regulate theprice of poultry products in order tomaintain the supply of chicken andeggs without any shortage whilemaking available whole chicken at aprice of Rs. 320/- per kilogram duringthe festive seasons of December,2010 and April, 2011. Production andrequirement of poultry products in2009 and 2010 illustrate the shortage(Table 6.11) where Governmentintervened stabilizing the market. Atpresent the industry has grown tomeet the local demand entirely with alittle surplus.Table 6.11 > Production and Requirement of Chicken and Eggs2009 - 2010Item/ ProductChicken (Mt‘000)Eggs (Mn)YearQuantityProducedSource: Department of Animal Production and Health.The Government was able to increasethe production of chicken during 2010up to 104,500 Mt which was 99,280 Mtin 2009. Egg production was increasedup to 1,200 million in 2010, whichwas 1,091 million in 2009. The priceof chicken and eggs were stabilizedduring the festive season of December2010 by closely managing the supplyand market price fluctuations. Poultryindustry was included under AgroLivestock Development Loan Schemefrom which the poultry industrialistsreceive financial assistance inexpanding their industry.Financial AssistanceSchemesAgro Livestock Development LoanScheme (ALDL)Ensuring self-sufficiency in milkby 2020 and retaining the foreignexchange outflow used for importsof milk powder within the countryis a prominent area identified bythe “Mahinda Chintana” policyframework. In line with this policy, itwas announced in the 2008 budgetproposals, the development of dairyindustry by providing credit facilitiesat concessionary interest rates for theestablishment of small and mediummilk processing centers, importationof milking cows and development ofanimal husbandry, which pave theway for the implementation of AgroLivestock Development Loan Scheme(ALDL) from 2008. Small farmerborrowers engaged in dairy and agroRequirement2009 99.28 111.382010 104.50 112.002009 1,091.00 1,042.002010 1,200.00 1,550.00products, with 6 percent interestsubsidy, and the private investors whopurchase liquid milk directly from thesmall farmers, with 2 percent interestsubsidy, are eligible to the loanscheme. The scope of the schemewas broadened by including theactivities of establishment of coolingfacilities and block ice manufacturingplants in 2009 and activities relatedto poultry farming in 2010.The bulk of the benefits has beengained by the small farmers underthis loan scheme. About 3,418small farmers obtained loans to thevalue of Rs. 417 million during 2010increasing the total number of smallfarmer borrowers to 8,851 which is97 percent of the total borrowers.The loan disbursement under smallfarmer borrowers is Rs. 933 millionwhich is 67 percent of total loandisbursement by December 2010. Anamount of Rs. 63 million has beenreleased to Participatory FinancialInstitutions as interest subsidyby the Government by December2010 under this programme. Dairyfarmers of the milk producingprovinces were able to gainmore benefits compared to otherprovinces as shown in Table 6.12.303
6 | DEVELOPMENT FINANCETable 6.12 > Performance of Agro Livestock Development Loan Scheme, 2008 - 2010Small Farmer BorrowersInvestors in Private SectorProvinceNo. of Loans Granted2010Total up toDec. 2010Amount Released(Rs. Mn)2010Total up toDec. 2010No. of Loans Granted2010Total up toDec. 2010Amount Released(Rs. Mn)2010Total upto Dec.2010Western 351 745 40.79 92.44 3 15 12.5 374.94Central 1,216 2136 150.87 221.64 2 28 1.05 34.9Eastern 213 728 33.01 95.67 8 71 6.65 14.28North Central 190 806 24.44 83.76 1 14 3.5 5.12North Western 894 2,613 84.57 233.19 0 73 0 9.37Northern 67 405 12.4 44.09 0 1 0 10Sabaragamuwa 114 323 13.46 38.69 0 16 0 3.11Southern 151 395 27.6 57.07 1 9 0.55 5.28Uva 222 700 30.1 66.79 1 24 0.4 2.86Total 3,418 8,851 417.24 933.34 16 251 24.65 459.86Source: Department of Regional Development, Central Bank of Sri LankaNew Comprehensive Rural CreditScheme (NCRCS)In order to enhance the agricultureproduction and to uplift cultivation,New Comprehensive Rural CreditScheme (NCRCS - Sarusara), wascontinued in 2010 in collaborationwith the Central Bank of Sri Lankaby providing an interest subsidy, forthe farmers to cultivate paddy andother subsidiary crops. Productionof seeds and planting material on acommercial scale and purchase ofagricultural produce by private tradersand companies under Forward SalesContract (FSC) system are the othereligible activities under this scheme.During 2010, the Treasury grantedRs. 516.8 million of interest subsidyto Participatory Financial Institutions(PFIs) for loans advanced by them outof their own funds under this scheme.The Government provided the interestsubsidy at 6 percent per annum forcultivation loans and 2 percent perannum for purchasing loans to thePFIs.The maximum limit for the cultivationloans granted under NCRCS fordifferent crops varies from Rs.8,000/- to Rs. 140,000/- per acre,where as the loans are granted forland areas ranging from 0.125 to 10.0acres. The maximum loan amountfor seed farming, nurseries andplanting materials is Rs. 5 million.A maximum loan amount of Rs. 50million is provided for the purchase ofagricultural commodities under FSCs.However, the maximum loan limitfor buyers with good track recordsextends up to Rs. 300 million underpurchasing loans.Under post war conditions, theawakening of the agriculture sectorhas made a direct impact on thisscheme with high demand forcultivation loans. When compared with2009, the total amount released undercultivation loans in 2010 has increasedby 22.7 percent. Subsequently, thetotal cultivated land area and totalnumber of beneficiaries have increasedby 18.2 percent and 15.5 percent,respectively (Table 6.13).During 2010, Rs. 3,584 million wasdisbursed among 72,014 farmersunder cultivation loans and Rs. 7,238million was disbursed among 1,031paddy collectors under purchasingloans. 64,412 farmers were benefitedthrough FSCs under purchasing loansgranted in this year. The highestnumber, i.e. 15,921 of cultivation loanshas been granted in PolonnaruwaDistrict followed by Anuradhapuraand Hambantota Districts providing15,904 and 10,321 loans respectively. Interms of the amount disbursed undercultivation loans, Polonnaruwa Districtleads providing Rs. 728 million followed304
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Ministry ofFinance and Planning(as
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Heads ofDepartments under thePurvie
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ContentsChapter 1 Development Persp
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Chapter 5 Foreign Financing 243Over
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Ministry of Finance and Planning Sr
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SRI LANKA AT A GLANCE - 2005 & 2010
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BRIEFINGSBriefings“Much remains t
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1 | DEVELOPMENT PERSPECTIVESEconomi
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03REFORM INITIATIVES173
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Financial StatementsHead-wise Summa
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Financial statementsHead-wise Summa
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Annual Report 2010 - Ministry of Finance and Planning

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