Annual Report 2010 - Ministry of Finance and Planning

Ministry of Finance and Planning Sri Lanka > Annual Report 2010in 2010 compared to 3.2 percentgrowth recorded in 2009. The gradualrecovery in the global economy, thecomplete cessation of terrorism,continuation of the fertilizer subsidyand favourable weather conditions arekey factors that drive this growth.Investment in Agriculture Sectorin 2010The government’s total investmenton Agriculture was Rs. 30,547 millionin 2010. Of the total investment, Rs.23,077 million was fertilizer subsidies.The continuation of the fertilizersubsidy programme for paddy farmershas helped to increase the productivityof the agriculture sector. Expenditureon fertilizer subsidies in 2010 is lowerthan that of 2009. This is mainly dueto the decrease in the annual averageimport prices of Urea and Murate ofPotash by 49 percent and Triple SuperPhosphate by 61 percent. However,the quantity of fertilizer issued underthe fertilizer subsidy programme hasincreased by 13 percent to 473,553metric tons in 2010 compared tofertilizer issued in 2009 due to theexpansion of cultivation area in theNorthern and Eastern provinces.In 2010, a greater emphasis has beenplaced on increasing the domesticcrop production. Accordingly, “ApiWawamu Rata Nagamu” programmehas continued providing Rs. 456million mainly to promote domesticproduction through development of375,000 home gardens and enhancingother sub programmes includingrecultivation of abandoned paddylands, production and use of organicfertilizer and increasing communitybased seed production. Meanwhile,the production and use of the organicfertilizer programme has been assistedby providing Rs. 137 million to increasesustainable crop production, improvelong term soil fertility and reductionof foreign exchange spending onchemical fertilizer. The governmenthas invested Rs. 1,021 million forresearch and development in 2010considering the emerging needs ofintroducing modern technology andenhancing value addition in agriculturesector.Paddy SectorThe paddy production has recordedan impressive growth of 17.7 percent in2010 compared to 2009 by producing4.299 million metric tons of paddy.It is the highest paddy productionrecorded in post independentSri Lanka. Paddy production in the2009/2010 Maha season has increasedby 10.3 percent compared to thecorresponding season of the last yearby producing 2.63 million metric tons.The increase in paddy production waslargely a result of the availability ofthe fertilizer subsidy, opening of newcultivation areas in the Eastern and theNorthern provinces and the adequaterainfall received throughout the year.The total newly cultivated paddy landsin the Northern Province were 4,424Ha in the Maha season. In the Easternprovince, an extent of 150,696 Ha ofpaddy has been cultivated, which is a10 percent growth compared to 2009.During the 2009/2010 Maha season,the total extent of paddy cultivatedhas increased to 646,001 Ha which is500Chart 1.50 > Investments on Fertilizer Subsidy75Chart 1.51 > Investments on Research and Development40065551100MT'000300200100453525155Rs.Bn.Rs. million100090080002006 2007 2008 2009 2010Amount issuedExpenditure07002005 2006 2007 2008 2009 2010Source: Ceylon Fertilizer Co. Ltd.Source: Department of National Budget95