peusp Plo% aql jo iuawn:oa uo!iaJ !SV 4qfnoS i!un wawUdoIjAJa] leinN £00Z '91z A(nJq sIlqe_l le!lS!lelS pUP SaXaUUV :11 fwnloA (sawnloA OMI ul) 41/MOJ9J` JOID3S WJeJV-UON Iejnfl PuP IeLnT1nhjWOSu!i0jd P)IU1 !J 3)-LfSZ' ON ljoda CURRENCY EOUJ1VALENTS Sri Lankan Rupee (Rs) US$1.00 = Rs. 95.80 (April 3, 2002) IF¶SCAL YEAR (FY) January 1- December 31 ACRONYMS CWE Cooperative Wholesale Establishment EPC Effective protection coefficient FAO Food and Agriculture Organization FBT Food, beverage and tobacco FOs Farmer organizations GCA Gross cropped area GDP Gross domestic product GIA Gross irrigated area GoSL Government of Sri Lanka MALF Ministry of Agriculture, Livestock and Forestry MASL Mahaweli Authority of Sri Lanka NPC Nominal protection coefficient NSP National Seed Policy O&M Operations and maintenance RNF Rural non-farm SLIS Sri Lanka Integrated Survey UJnit Measuremeini ts ac acre km kilometer gm grams li liter ha hectare mt metric tons kg kilogram pc pieces Vice President - Mieko Nishimizu Country Director - Peter C. Harrold Sector Director - Constance A. Bernard Sector Manager - Gajanand Pathmanathan Task/Co-Task Leader - Dina Umali-Deininger/Terrence Abeysekera iii Sri Lanka Promoting Agricultural and Rural Non-farm Sector Growth Table of Contents VOLUME H Annexes Annex A: Overview of Development in the Plantation Sector ...........................................................1 Annex B: Draft Framework for Water Resource Management in Sri Lanka ....................................4 Annex C: Comparison of Deeds and Title Registration Systems ......................................................8 Annex D: Implementing Seed and Phyto-Sanitary Policy Reforms: Lessons From International Experience ...................................................................9 Annex E: Reforming Land Policy and Land Administration: Lessons from Intemational Experience .................................................................. 17 Statistical Tables I. Table Al.l: Gross Domestic Product at Current Prices, Rs Billion . . 34 Table A1.2: Gross Domestic Product at Constant 1996 Prices, Rs Billion . . 34 Table A1.3: Average Annual Growth Rate Of GDP at Constant 1996 Prices, 1981 to 2000 .................................................................. 35 Table Al.4: Quinquemnial Average Percent Share of GDP, 1981 to 2000 . . 35 Table AI.5: Agriculture GDP, Rs Million, Current Prices ........................................................ 35 Table Al.6: Period Average Percent Share in Agricultural GDP . .............................................. 35 Table A1.7: Agriculture GDP, Rs Million, Constant 1996 Prices . ............................................. 36 Table Al.8: Agriculture, Livestock and Forestry GDP, Period Average Annual Growth Rate .................................................................. 36 II. Tablea2. 1: Average Expenditure Per Household Per Month on Selected Food Items by Survey Period (All Island) .................................................................. 38 Table A2.2: Average Expenditure Per Household Per Month on Selected Food Items by Survey Period (All Island) ................................................................... 39 Table A2.3: Average Monthly Household Consumption Quantities of Selected Food Items by Household Expenditure Decile ........................... 40 m. Table A3.1: Area, Production And Yield of Paddy, Tea, Rubber and Coconut, 1979-2000 ........................... 41 Table A3.2: Paddy Area-Irrigated and Rainfed, 1980-81 to 1999-2000 ..................................... 41 Table A3.3: Yield of Paddy by Districts, 1985 - 2000, Mt/Ha ................................................... 42 Table A3.4: Paddy: Extent Sown by Variety of Seed, 1992 - 1999 Maha And Yala ................ 42 Table A3.5: Livestock Population in Sri Lanka, 1970-2000 (000 Animals) .............................. 43 Table A3.6: Livestock Production of Sri Lanka, 1970 - 2000 ................................................... 44 Table A3.7: Paddy-Gross Asweddumised Extent by Irrigation Scheme (1973/74)- 1997/98) ............................................................. 45 Table A3.8: Agricultural Commodities Currently Subject To Licensing Requirement ............. 45 Table A3.9: Yala 1999 - Grain Yields of Com Varieties, Mt/Ha .............................................. 46 Table A3. 10: Maha 1999 - Grain Yields of Com Varieties, Mt/Ha . ........................................... 47 Table A3.11: Factors Which Constrain Crop Diversification by Farm Size . . 48 Table A3.12: Production Subsidies Granted for Other Export Crops (Rs. Million) .. 48 Table A3.13:, Irrigation Subsidies Through Agro Wells Program (Rs. Million) . . 48 iv Table A3.14: Current Duty Exemptions Applicable to the Agriculture Sector ........................... 48 Table A3.15: Summary Statistics - Total Downstream Mahaweli Systems ............................... 49 Table A3.16: Estimated Average Annual Per Capita Income From All Sources By System ............................................................... 51 Table A3.17: Major Changes to Import Tariffs in The Agricultural Sector 1995-1998 .............. 52 Table A3.18: Cultivation Loans Granted Under The New Comprehensive Credit Rural Scheme, 1980-2001 ............................................................... 53 Table A3.19: Volume of Exports of Plantation Crops 1990-2000 (Vol. In Metric Tons) ............................................................... 54 Table A3.20: Agricultural Exports - Other Agricultural Crops ($million.) ................................ 55 Table A3.21: Export Performance 1991-2000 ($ million) ........................................................... 55 Table A3.22: Agricultural Investment Projects (Rs. Million) ..................................................... 56 IV. Table A4. 1: Employment Status in Sri Lanka by Sector And Employment Status, 1990 - 2000, 000 People ............................................................... 57 Table A4.2: Percentage Distribution of Employment In Sri Lanka by Sector And Employment Status, 1990 - 2000, Percent ............................................................ 58 Table A4.3: Unemployment in Sri Lanka by Age Group, 1990 - 1999, Percent . ...................... 58 Table A4.4: Value of Industrial Production (A) ............................................................... 59 Table A4.5: Industrial Production Value Added, Rs Million ..................................................... 60 Table A4.6: Capacity Utilization in Industry (A) ............................................................... 61 Table A4.7: Agricultural Investments 1992-2000 ............................................................... 61 Table A4.8: Realized Investments in the Board of Investment (Boi) Enterprises (A) ............................................................... 62 Table A4.9: Principal Indicators of Industrial Activity Classified by Industry Division & Persons Engaged Size Class - 1997 ............................................................... 63 Table A4.10: Historical Table of Currently Employed Persons by Major Industrial Table A4. 11: Private Sector Industrial Production Index (1990=100) ........................................ 65 Table A4.12: Percentage Distribution of Currently Employed Population by Major Industrial Group And Sector - 1999 ............................................................... 66 Table A4.13: Length of Public Roads 1995-1999 (Km) .............................................................. 66 Table A4.14: Classification of Road Facilities In Sri Lanka by District/Province ............................................................... 67 Table A4:15: Changes in Telecommunication Services in Sri Lanka 1989-1999 ....................... 68 List of Figures Figure Al.1: Percentage Contribution of Agricultural Sector in GDP (1998) and Percentage of Labor Employed in Agriculture (1997) ............................................. 36 Figure Al.2: Distribution of Agricultural Households by Rural Expenditure Quintile ............................................................... 37 Annex A Overview of Developments in the Plantation Sector Evolution of the Plantation Sector * The history of plantations in Sri Lanka is almost synonymous with colonial rule and dates back to over 100 years. The plantations sector expanded with government patronage under British rule. The Crown Lands Encroachment Ordinance of 1840 enabled the sale of crown land for the expansion of plantations. * Beginning with coffee plantations, an area of 140,000 ha. was brought under coffee, supported by a migrant labor force of nearly 150,000 persons from South India. Soon after the coffee boom of 1878, with coffee exports reaching nearly 2 million kg., the coffee leaf blight destroyed the coffee plantations in the 1880s. * Crops such as cinchona (quinine), cocoa and tea were experimented with, as substitutes for coffee. * Tea plantations commenced in 1867 and emerged as the major plantation crop after coffee plantations were destroyed. Tea plants required similar agro-ecological conditions as coffee and benefited from the available labor and infrastructure. * Rubber was introduced in 1876, but expanded fast as a plantation crop in the early 20h Century. * Coconut was encouraged as a plantation crop by the British in the 1840s. Role of the Plantation Sector in the Economy * Contribution to GDP by Plantations: At the time of independence, the plantation sector played a significant role in the economy of Sri Lanka. The banking sector, trade and the transport network had all developed initially to support the plantation economy. The percentage share of the plantation sector in Gross National Product in the late 1940s has been estimated at 37 percent. By 1996, it had declined to 4 percent. * Employment in the Plantations: The plantation sector was the primary sector that offered the highest level of regular employment. In 1953, the contribution of the plantation sector to total employment in the economy was 29 percent. In 1996, it declined to 20 percent In terms of providing a livelihood to people in the country, this sector is second only to the paddy sector. * Plantation Sector Wages: Since the 1930s, daily wage rates on the estates have been determined according to minimum wages stipulated by Wages Boards. The Real Wage Rate Index in the plantation sector in 1953 was 49.9, while in 1996 it was 113.9 (1978=100). This indicated a 2.5 percent increase annually. Real wages in the plantations have grown faster than the growth of real output in the sector which had increased only by 1-1.5 percent since 1970. In 1974, the minimum number of days of work offered to estate workers was legally determined at 109 days per annum as a safeguard against cut backs. However, at present, due to the shortage of labor in the plantations, some estates offer nearly 300 days of work per annum. * Contribution to Foreign Exchange Resources: Nearly 90 percent of foreign exchange earned in 1948 came from the export of tea, rubber and coconut. Although this share declined to 20 percent in 1996, the contribution is significant considering the high value of net foreign exchange earned. * Contribution to Government Revenue: The plantation sector has contributed heavily to government revenue over the years. Taxes imposed at various times included export duties, cesses, ad valorem taxes and sales tax. There have been company taxes as well. Export taxes accounted for 24 percent of governnent revenue in 1948. Taxes on the tea sector, excluding company taxes in 1978, accounted for 48 percent of government revenue. Except for the cess, all other taxes were removed in 1992 to reduce the tax burden on the plantation sector. The cess is based on the quantity of tea, rubber or coconut products exported. This is ploughed back into the sector in various forms such as development assistance, financial assistance for research work, etc. Impact of Land Reforms o In the late 1940s, about 925,000 ha. were under the principal export crops of tea, rubber and coconut. Of this, approximately 69 percent of the extent under tea, 38 percent of the extent under 2 rubber and 12 percent of the extent under coconut were foreign owned. Agency Houses managed the estates of tea, rubber and coconut held by public companies. * The Land Reform Law No. 1 of 1972, which introduced the first agrarian reform that took place in the plantation sector after independence, imposed ceilings on privately owned land at 10 ha. (25 acres) for paddy land and 20 ha. (50 acres) for other categories of land. A Land Reform Commission (LRC) was established with powers to acquire and redistribute privately owned land in excess of the stipulated ceilings. * The scope of land reform was extended through the Land Reform (Amendment) Law No. 39 of 1975. By this law, land and related capital assets held by public companies in agriculture were nationalized. * During the land reforms of 1972 and 1975, an area amounting to 419,101 ha. were nationalized. Of this, 166, 405 ha. were tea lands, 74,494 ha. were rubber plantations and 48,130 ha. were coconut lands. The outcome by 1976 was as follows: o Nearly 62 percent of the area under plantations, which comprised mostly large plantations, was vested in public sector agencies. o About 28 percent was leased to set up government assisted co-operative farms. O Only about 10 percent of land was allocated in small allotments among peasants. O Public companies including Agency Houses were eliminated form activities in the plantation sector. Ownership moved from the private sector to the public sector. The management and control of public sector estates were entrusted to: n The Sri Lanka State Plantations Corporation (SLSPC), formally the Ceylon State Plantations Corporation established in 1958. e The UP-Country Co-operative Estates Development Board (USAWASAMA), established in 1976. E The Janatha Estate Development Board (JEDB), established in 1976. O By 1976, nearly 35 percent of the total area under plantation agriculture was under the control of these three state institutions. o In 1977, estates of USAWASAMA were reallocated between the SLSPC and the JEDB, due to inefficiency. Plantation Sector Problems under State Ownership * Decision making was centralized and inflexible, and political considerations took precedence over economic factors. * Wage increases were unrelated to productivity, labor was politicized and productivity declined. * Costs increased and heavy financial losses were incurred. * Investment was low. * Management efficiency in the plantations owed by the SLSPC and JEDB deteriorated. Further Reforms in the Plantation Sector * Regional Plantation Companies: To readdress this situation, in 1992, a program of restructuring was initiated and the management of state plantations, formed into 23 Regional Plantation Companies (RPCs) under the JEDB and SLSPC, was handed over to private management companies on a profit sharing basis for a five year contract period. These management companies did not have a stake in the ownership and the management contracts were short-term. Hence there was a disincentive to invest in capital expenditure. By 1995, 13 RPCs out of 23 were making profits. o Privatisation: In 1995, a major structural change took place, i.e. based on the powers vested in the Public Enterprise Reform Commission (PERC), shares in the RPCs were sold to the private sector. o The full risk and benefit of management was passed on to the private companies. The land was leased to the private sector for a period of 50 years, with the option to renew the lease agreement. o Initially, 51 percent of the total shares in profit making RPCs were sold, with the offer first being made to the company managing the plantaton. Subsequently, 51 percent of total shares in loss making RPCs were sold on the Stock Exchange on an "all or 3 nothing" basis. o Of the total shares, 39 percent in each company were sold to the public. O By November 1997, 90 percent of shares in 5 RPCs, 71 percent of shares in 2 RPCs and 51 percent of shares in 11 RPCs had been sold to the private sector. In all, majority shares of 18 RPCs had been sold to the private sector. * Outlook: It is anticipated that private sector participation would encourage investnent in fertilizer application, replanting and investment in machinery and equipment in the plantation sector. With buoyant tea prices and improved management, several privatized plantation companies have increased their profits. Privatisation of the regional plantation companies, which began in 1995, progressed steadily through 2000. Under the divestiture plan, 51 percent of the stock was sold to the management companies while 10 percent of the stock in each company was gifted to the employees. Of the balance stock, 20 percent was to be issued as an Initial Public Offering (IPO) and the remaining 19 percent was to be sold through the stock market. At end 2000, the privatization of 8 companies had been completed and all the shares were fully sold. In another 8 companies, 19 percent of the stock is still with the government, while in 4 companies, 39 percent of the stock is with the government. Source: Ministry of Finance, 1998, Economic Progress of Independent Sri Lanka,Colombo Sri Lanka: Ministry of Finance. 4 Annex B Draft Framework for Water Resource Management in Sri Lanka The proposed Water Resources Policy consists of a number of component statements, including the following: * Water Resources Policy Foundation * Water Rights and Allocation Policy * Water Resource Demand Management Policy * Groundwater Management Policy * Water Resource Information Management Policy * Institutional Structure for Water Resource Management It is expected that additional components of the Water Resources Policy will be developed and approved by government in the future. Anticipated components include: * River Basin Planning and Management * Drought Management and Flood Control * Water Resource Development and Financing * Water Quality Management * Other topics to be determined In addition, sectoral water policies and procedures will be developed by irrigation, industrial, urban, power and environmental authorities. Obiectives The objective of water resource management is to ensure the use of water resources in an effective, efficient and equitable manner, consistent with the social, economic and environmental needs of present and future generations. Further objectives for water resources management are to: * Facilitate national development * Conserve, and recognize the value of scarce water resources * Ensure equitable sharing of water resources for meeting current and future demands of the population • Recognize the national importance of water allocation to the irrigation sector in terms of such things as the amount of water allocated, number of users and potential for improved water conservation * Ensure flexibility of water allocation in a way which promotes social harmony and individual decision making * Safeguard investments in water resources development and other sectors of the economy by providing water rights and entitlements * Improve standards in the maintenance of safe quality of water sources required for various water uses * Ensure a healthy environment and sustainable use of both surface and groundwater resources using a comprehensive, river basin-oriented approach In the long run the Government will promote greater economic efficiency of water use through the phased introduction of appropriate mechanisms: 1. Allocation of water under transferable water rights. Transferability of water on a voluntary and compensated basis will be a major tool to promote more efficient allocation and use of water resources. 2. Increased sharing of water management costs. Recovery of water service costs and sharing of basin-level water resource management costs by direct beneficiaries will enhance financial sustainability and promote water conservation. 5 3. The use of other mechanisms which reflect the true cost and value of water development. Information on sectoral water values and incremental resource development costs will be used in water resource planning. Water resource project evaluation will be based on sound economic analysis and realistic cost recovery plans. Subsidies affecting water resource allocation and management will be made transparent. Scope * The National Water Resources Policy addresses the management of fresh and brackish water, it does not apply to marine (sea) water. * The Policy applies to all surface and groundwater. * The Policy also takes a comprehensive approach to water resources, not limited to individual water- using sectors. but recognizing the characteristics and needs of those sectors. Policy Principles The following principles will guide water resource management: * Ownership. All water resources, including both surface and groundwater, are owned by the state and will be managed by the government in partnership with water users on behalf of all Sri Lankans. * Sustainable Management. Water resources will be managed in a sustainable. balanced and long- term manner. Sustainability will be pursued with respect to economic, financial, environmental, social and other considerations. * Openness and Participation. The government will take an open and participatory approach to water resource management Decision making will be based on clear legislation, regulations, plans and administrative procedures. Information on water resources wiU be made available and public awareness will be built up. * Security and Flexibility of Water Allocation. The security of supply for water users will be increased through a system of water entitlements which are effectively monitored and enforced. At the same time, entitlements will be transferable, allowing water to be used for higher valued purposes. The transfer of entitlements will be subject to approval in order to protect third parties, vulnerable groups, environmental values and other important benefits. * Sharing of Costs. The costs of water resource management will be shared in an equitable manner with beneficiaries. The govermnent will provide a subsidy for those water users which are not currently able to pay a share of these costs. * Gender. Water resources will be managed in a way which recognizes the distinctive roles and needs of men and women. Priority will be given to activities which facilitate traditional gender roles and strengths. In particular, the interests of men and women in vulnerable positions within marginalized groups of population (such as low income, female-headed households or migrant workers) will be supported in all aspects of water resource management. The water resources policy should be interpreted in a gender sensitive manner. * Sectoral Emphasis. The special role of the irrigation sector in Sri Lanka is recognized. Some key policy provisions, such as granting water entitlements to existing users, increasing the security of water allocation through monitoring and enforcement, the provision for government to pay the water management cost share for irrigation entitlement holders until they are able to do so, and an open and transparent approach to all aspects of water resource decision making will help to safeguard the interests of irrigation water users in balance with other sectoral water users. 6 The importance of the hydropower sector is also recognized. National and multi-basin plans will take into account the need for least-cost coordinated generation. * Management of Water Resources Information. Information on water resources will be strengthened and coordinated through data sharing between agencies. Water resource management decisions will be made on the basis of the best available information. Strategies * The objectives of this policy will be achieved through the application of an integrated water resource policy framework, implemented under revised legislation and through a coordinated institutional framework. * The policy framework will be extended to cover all important aspects of water resource management. Policies and plans will be developed in an open and consultative manner and will be updated from time to time. * Water resources policy will be coordinated with other national policies, and will be directed toward the achievement of broad social objectives. Water resources policy will also be reflected, as appropriate, in the policies and strategies of water-related sectors. * This water resources policy applies to all surface and groundwater and to all river basins. The institutional arrangements for co-ordination within the water sector apply to all agencies involved in water resource management. For the purpose of river basin planning, water allocation and other aspects of water resource management priority river basins will be identified through a phased approach. * National and multi-basin water. resources plans will be prepared to address strategic water resource issues such as national objectives (food security, industrial location, etc), coordinated management of water resources for hydropower generation, inter-basin water diversions and identification of priority river basins for more detailed planning.. o Water resources planning and management will be carried out by a set of national, apex agencies which are independent from those agencies which are responsible for specific water-using sectors. The apex agencies will consist of: - a National Water Resources Authority responsible for clearly defined policy, regulatory functions regarding water resources, - a Water Resources Council which will have co-ordination and advisory functions, and - a Water Resources Tribunal which will hear and resolve appeals regarding the allocation of water and will provide arbitration services for water-related disputes. * Institutional arrangements will be made at the provincial and local levels as well so that stakeholders at these levels can participate effectively in water resource planning and implementation. * Other national water-related agencies are expected to continue to carry out their present functions, while bringing their activities into line with this national water resources policy and subsequent river basin plans, where applicable. The National Water Resources Authority will monitor and ensure compliance with national policy and river basin plans. * The implementation of this policy will include co-operation, delegation of appropriate responsibilities to provincial and local authorities, and reliance on the private sector and on non-government, community and other local groups where possible. Delegation of water resource management 7 responsibilities will go along with capacity building and national oversight in order to ensure that these functions can be effectively carried out. * Many water resource management functions will be organized on the basis of river basins and groundwater aquifers. Basins and aquifers are natural units for information collection, planning, water allocation and other functions. Institutional arrangements will reflect this river basin orientation. * A long-term perspective and phased approach will be used in implementing water resource management. Some of the required functions, as well as institutional roles and relationships, are new to this country and must be tested and developed. Planning and implementation of water resource management at the river basin level will be undertaken on a phased basis, addressing priority issues and needs first. * This Policy applies to both water quality and water quantity. Since pollution control and other environmental protection functions are assigned under the National Environmental Act, a coordinated approach between the National Water Resources Authority and the Central Environmental Authority will be use in the monitoring, planning, administration and enforcement of both water quantity and quality. * The Policy does not encompass land and other natural resources, although it is recognized that these are also closely connected with water resources and have a major irnpact on the achievement of water resource objectives. Land use information will be used in water resource planning, but the National Water Resources Authority will not take on the planning and management of land and other resources. A strategy of co- ordination will be used and water resource managers will promote appropriate management of land and other resources. Source: Water Resources Council and Secretariat, 2000, "National Water Resources Policy and Institutional Arrangements", Colombo, Sri Lanka: Water Resources Council and Secretariat, Govermment of Sri Lanka. 8 Annex C Comparison of Deeds And Title Registration Systems Deed Registration Title registration Registration is not essential to pass ownership or create rights. Registration is essential to pass ownership and create rights. Third party binding rights may not be registered but they are still To be effective, all rights must be registered and appear on the Register effective. (except for exceptions listed in the statute). Because interests that affect land may not be registered, a search of the Because interests must be registered to be effective, there is certainty Registry will not necessarily disclose all the binding rights that affect that all the rights that will affect a purchaser, mortgage or lessee (except the land. Thus, there is always a chance-of outstanding interests. the statutory exceptions) are shown on the Register. Ownership depends on what the collection of deeds shows - it is Ownership depends on what the Register shows - it is based on a single derived through a chain of title. registered transaction that is shown in the Register. To prove ownership, you need to trace back to a good root of title and To prove ownership, you need to check only the Register - there is no check all the subsequent transactions that make up the chain of title. need to check prior transactions. Deeds are often long, complicated and contain superfluous information Transactions are usually short, uncomplicated and contain only key in various fonmats. information shown on standard forms. Not all aspects of documents are checked by registration staff for their Registration staff must check documents for their legal effectiveness legal effectiveness or errors. and for errors. Registration provides no guarantee of correctness of the content of Registration provides a guarantee of correctness of the content of documents. documents. Registration does not cure defects such as errors or omissions in Registration cures defects in documents. documents. Following registration, a copy or the original of the transaction Following registration, a copy of the Register is given to owner. document is retumed to owner. Ownership is evidenced by possession of a bundle of deeds. Ownership is evidenced by possession of a certificate of title - this is a copy of the Register that is given to owner. Lost deeds cannot be replaced. Lost certificates of title can be replaced. There is no government run compensation system to compensate case There is a govemment run compensation scheme for cases of fraud and of fraud and other types of loss. errors in the Register. Source: Tony Lamb, 2001, "Establishing a Land Registry under the Registration of Title Act 1998," Background paper to the Sri Lanka Land Titling and Related Services Project. 9 Annex D Implementing Seed and Phyto-Sanitary Policy Reforms: Lessons from International Experience Around the world, the flow of new private seed technology has been expanding faster than public research and- seed technology, and at the same time private research is increasingly aimed at multinational markets. If farmers in developing countries are going to have reliable access to the flow of new varieties and other seed technology from public and private research around the world, it is important to promote the development of competitive private seed industries with multiple links (imports, contracts, investments) to the world seed industry. If seed markets are going to work - i.e., if farmers are going to be able to buy good seed for all crops - farmers need to see competitive seed markets with many small and medium companies, including local low- budget companies that produce seed for low value non-hybrid crops. The importance of small and medium local companies (many of which will have licenses with regional and other intemational companies) forces attention to liberal - vs. restrictive - regulations. If regulations do not set low barriers for small and medium local companies to enter and compete, then the seed market does not work. Competition will be weak, many crops will not be covered in commercial seed markets, many farmers will not be served. Small local companies are the key to competition. What works for small companies sets parameters on the task to design workable seed regulations. Legislation dealing with seeds is normally packaged into (a) phytosanitary laws and subordinate regulations, (b) seed laws and subordinate regulations that address variety and seed quality and supply, and (c) laws establishing plant variety protection. Limiting Phytosanitary Risks with Imported Seed This is an area of seed regulation that is uncontroversial in basic design; problems come in implementation. According to common practice, laws empower some branch of the government -generally a part of Ministry of Agriculture (MOA) - to control seed imports so as to block import and introduction of plant pests and diseases. Some of the issues are: Phvtosanitarv risks. In many countries, the law that allows an agency in the MOA to control seed imports for phytosanitary reasons also allows that agency to control seed imports for other reasons, including import of varieties, seed quality, and protecting domestic seed producers. Often, importers have no rights, since the MOA has authority to make arbitrary decisions. To develop rule of law and to ensure the most effective phytosanitary regime, it is important that controls on seed imports be focused as much as possible on phytosanitary issues. When there are too many controls (see discussion below on seed quality), seed companies, traders, and farmers will often smuggle seeds, as is already happening in Sri Lanka, evading phytosanitary as well as other controls. Phvtosanitarv controls on quarantinable pests and diseases. Even when govermments formally focus import controls on phytosanitary risks, implementation sometimes goes awry. In some cases, governments misuse phytosanitary controls to protect domestic seed producers against competition from imports (e.g., by raising objections to seed imports based on pests and diseases that are already present and/or do not pose any threat to the economy or biodiversity). The intemational seed industry addresses this issue by pressing for science-based controls, i.e., by asking phytosanitary officials to focus on quarantinable pests and diseases. The International Plant Protection Convention defines these as pests and diseases that are not already present in the country - or if present are not present in some parts of the country and are under internal quarantine control -- and that could have significant economic or environmental impact. A number of inter-governmental organizations, including FAO's Interim Commission on Phytosanitary Measures (which supervises implementation of the International Plant Protection Convention [IPPC]), European and Mediterranean Plant Protection Organization (EPPO), and other regional organizations are part of ongoing efforts to improve the defmnition of science-based risks and to increase pressures for governments to limit import controls to identified risks. Along with these organizations and agreements that focus on seeds, the Sanitary and Phytosanitary Measures Agreement (SPS) provides a framework for countries to adopt science-based phytosanitary controls for all goods, including seed. Regional cooperation. Countries with extensive and porous land borders can cut cost and inconvenience of phytosanitary controls and at the same time improve phytosanitary protection by cooperating to hartnonize and 10 enforce controls along natural external borders (oceans, mountains, and other natural barriers). This too calls for governments to work with and through international organizations. Rationalization of phytosanitary controls is an important aspect of regional efforts to create larger and more efficient seed markets (e.g., across Central and Eastern Europe, across sub-Saharan Africa). Often, organizations such as Southern Africa Development Community (SADC) are already in place and could play a role to rationalize regional phytosanitary controls, though they may not have done so to date. Protecting Biodiversity Limiting Damage from New Species. One of the classical challenges in regulating imnport of planting material is to block introduction of plants that might become damaging weeds. Water hyacinth in India and Africa is an example of a species - imported and introduced as an ornamental plant - that escaped and expanded in the wild to become a damaging weed. The common design for regulations to block such introductions is to put all seeds (planting material) on the import control list and authorize one or more government offices to issue import permits. These offices can then list species and treatments allowed for import (with phytosanitary certificates), and require special permiission for all other species not listed. Nurseries and botanical gardens may ask for permission to inport and introduce a new ornamental plant or forest species. In deciding whether or not to approve such requests, one of the most important questions is whether or not the proposed introduction threatens indigenous species in the wild. Promoting Seed Quality and Supply The purpose of most seed laws (as distinct from seed-related phytosanitary, environmental, public health, and IPR regulations) is to promote seed quality and supply. Those who design seed laws address a variety of risks or worries about seed quality and supply and do so in different ways. A basic and non- controversial task for regulating seed quality is to enforce truth-in-labeling, which protects farmers from fraud. Aside from truth-in-labeling, there is no standard and agreed consensus design for other government regulations addressing seed quality - e.g., variety approval, certification, minimum standards, laboratory tests, etc. This is an area where discussion and debate may clarify good and bad points of different options. Design of regulations to protect domestic seed supply calls for critical thinking. Limiting Fraud: Truth-in-Labeling at the Retail Level In most market economies, commercial law mandates truthful labels and allows companies to register trademarks. Even without special seed legislation, these laws provide mechanisms for governments to prosecute fraud, and also provide a basis for customers and competing companies to ask for damages through civil suits. Seed laws and regulations can enhance the effectiveness of truth-in-labeling by: (i) listing information that must be on the label (company name and address, crop, variety, germination rate, testing date, expiration date, etc); (ii) assigning some agency of the MOA (call it the seed agency) to test seeds to determine whether or not they are truthfully labeled; and (iii) empowering the seed agency to administer fines (that are subject to court appeal). In situations where truth-in-labeling is difficult to enforce and/or farmers are suspected to be slow leamers, the option to back off from liberalization has its own problems. Current strategies for agricultural development for even the poorest countries depend heavily on technological change at the farm level. Current strategies also depend heavily on privatization of inputs delivery. In other words, our strategies depend on farmers getting more technological options and information and having more interaction with inputs markets. Considered in this context, if farmers have trouble getting and evaluating information about marketed inputs, they need help for this and we cannot really put a market oriented approach off by saying farmers don't read labels, etc. The enforcement of truth-in-labeling requires good definitions of violation in the regulations, such as misbranding, adulteration, short weight bags, deficiencies, or unsubstantiated claims. There is also a need to define sampling and inspection techniques, analytical methods and investigation allowances. Farmers need to have the opportunity to sue to recover losses (from false labeling or fraud). Important in each situation is what can be done to make the judicial process more accessible and efficient. Promoting competition is also very important, so that farmers can discipline bad companies by shifting their business to others. Truth-in-labeling design issues Should the seed agencies have the authoritv to break and enter or to interrupt seed trade? Some seed laws give the MOA's seed inspectors authority to break and enter and to seize seed 11 samples without a search warrant, and also give legal authority to the seed agency to force a company to stop seed sales on the basis of a suspected infraction, again without a judge's order. Such authority may be excessive. Giving an inspector authority to stop seed sales for several weeks on suspicion of an infraction gives him or her too much power vis-a-vis seed sellers. With such unbalanced regulations, there may be temnptations for inspectors to demand bribes. Should regzistering companies be responsible for packaged seeds? In some countries, the MOA's seed agency registers seed companies (i.e., those responsible for seed labels). However, truth-in-labeling can operate without MOA registering companies, since one of the items of information demanded on the package may be the name and address of the individual or comnpany responsible for packaging the seed and for the information on the label. Also, all companies (which are legal persons) would already be registered with other branches of the govermnent, so that MOA and anyone else can in principle find any legitirate seed packager. And MOA's registration provides no additional protection against the risk that anyone will package seed with a fraudulent name or address. If MOA nevertheless wants to register seed companies, truth-in-labeling is satisfied by making the registration process low-cost and automatic, based on simple objective criteria (i.e., registration for tax purposes, permanent address) without expensive pre-conditions (e.g., ownership of seed processing and packaging equipment) and no room for any MOA official to make any subjective judgements about the fitness or capability of the company to produce seed. Complicated, subjective, or expensive criteria can be barriers to company entry. Will it work when farmers are illiterate, uneducated, not experienced with competitive seed markets. etc? Many experts argue that illiterate farmers may be taken in by fancy packages, or that farmers cannot read and understand labels. Some of these concerns can be addressed by labeling rules, that do not allow claims that have not been proved (e.g., resistance to disease). Some risks remain, but alternatives that are putting trust in direct control by government officers, may be even more risky. The basic trust should be the skills of farmers and their ability to learn as individuals and as a group. Public efforts should focus on empowering them rather than taking decisions away from them. Even in the poorest countries, illiterate farmers are skilled in their profession, trained from childhood to deal with natural risks as well as interpersonal agreements and negotiations. They may make mistakes, but to protect someone from a mistake - after giving them good information on a label - you have to second-guess them, assuming that you know better than they do what is in their best interest. For poor farmers who have strong incentives to make good decisions, we should be careful about recommendations to take choices away from them and to put those choices in the hands of someone who has no financial incentive to make good choices. There are different ideas and attitudes about farmer judgement and ability to learn. Some studies show farmers not knowing things that we think they should. On the other hand, we often also find farmers doing things that experts advise against but which turn out to be sound when someone takes a close look. For exanple, farmers in Bangladesh have often used less phosphate and potash than advised; they know that yield response is low. Hence, assessing farmer knowledge, judgement and ability to learn may not be a straightforward matter. Is a weak legal system an areument eaginst relving on truth-in-labeling to ensure seed quality? In many developing countries, small farmers and small businesses have little or no access to the legal system. Many seed experts argue that under such conditions truth-in-labeling does not work, and that governments of such countries should therefore directly enforce additional explicit quality controls on seeds during production and/or trade. There are several weaknesses in these arguments: a) When and if truth-in-labeling cannot be enforced at the retail level, there is no assurance that any additional seed quality controls will improve quality at the retail level. For example, government may demand that traders submit all commercial seed for tests in government laboratories before packaging to ensure that seeds meet standards stated on labels. However, if government cannot enforce truth-in-labeling, a company can package and market additional untested seeds (with or without lower quality). Government may enforce minimum quality standards on imported seed. This may keep low quality seed out, but it does not ensure a good final product since a seed company can mix good imported seed with lower quality domestic seed, allow quality to deteriorate before sale, etc. If truth-in- labeling cannot be enforced at the retail level government effort on quality control at any other level can be a waste. b) Truth-in-labeling protects established companies (and farmers) from those who would fraudulently try to sell low quality under the name of an established seed company (in counterfeit packages). While farmers 12 may not be able to initiate legal challenges, seed companies presumably can. Seed associations can be helpful to protect the interests of honest traders. c) Seed companies -- and especially large companies -- are highly vulnerable to poor publicity, so that farmers that have evidence of mislabeled or poor seed do not have to go through courts to get attention and often compensation. Is it acceptable to sell unWackag*ed and unlabeled seed? If regulations are going to be at all realistic, it is important not to ban all sale of unpacked and unlabeled seed, but some restrictions might be considered. If all seed had to be packaged and labeled, farmers would break the law selling seed to neighbors. Many seeds are not packaged (e.g., wheat or rice) but are rather sold in bulk. Truth-in-labeling regulations can ask that labels accompany such seed. Commercial seed dealers in developing and transition countries may collect seed for local vegetables, etc., from local seed-growers (under contract) and offer it in open bags. Regulations should allow this because it serves an existing market, farmers are familiar with risks over time, and the SME seed companies that do it are the backbone of the national seed industry. One option is to allow seed dealers to sell unlabeled seed for all but (a few) listed species. In many countries, seed dealers open bags or cans to sell seed in small lots. This too should be legal. Whether bags are open or closed, truth-in-labeling can apply if the seller presents the seed as associated with a label, and this applies to bulk wheat seed as well as vegetable seed from an opened can. Seed companies may increase confidence in their product by putting seed in smaller packages, so that farmers can choose sealed packages. Governments can also prohibit dealers from selling from opened packages, but this can be hard to enforce in practice, so that is becomes a pious wish that does not more than make existing and continuing trade illegal. Variety Controls Variety registration means that government records a description of the variety. The basic purpose of variety registration is to fix one name to one variety, so that farmers can be sure about what they are buying. Registration allows experts from a seed certification agency to identify the variety in the field and to certify the seed. The meaning of seed certification is that some licensed inspector certifies that seeds are of the variety that is named on the label. This is only possible if the variety is known and registered someplace. It is not necessary for each country to process data to register a variety in order for the MOA to certify seed of that variety. A variety's registration and description in other countries can be used, e.g. the EU Common Catalogue or OECD Seed Lists. Both of these lists provide information about where any MOA could get a description and even sample seeds for any listed variety, and that is sufficient for an MOA to be able to inspect seed plots and to certify that seeds are of the specified variety. It is common practice among countries that participate in OECD Seed Schemes to produce and certify seeds for export to another country where the variety is registered. Many countries import expensive hybrid vegetable seed for varieties for which seed is never going to be produced in-country. For many such varieties, registration in producing countries, has no meaning for seed production and seed certification in those countries. Such high value vegetable hybrids are normally sold in the EU or anywhere else without certification. Even though the logical and original sense of variety registration is to list varieties for which a seed agency is prepared to offer seed certification and to enforce truthful labeling, the practice of variety registration has in many countries gone beyond its link to seed certification and is widely associated with official decisions about whether or not seed of the variety is approved for sale. This in turn is often linked to official decisions about its performance or value in cultivation and use (VCU). In many countries, governments list varieties for which seed sale is allowed. In most countries the list of registered varieties is the same as the list of allowed varieties. Some of these countries have additional minor lists of varieties allowed for seed or commodity production for export, but not domestic sale, etc. In other countries (e.g., Netherlands), variety registration alone does not allow seed sale, but is a pre-condition for government to make a separate decision about whether or not to allow seed for sale. The subsequent discussion focuses on whether or not variety registration should be compulsory. However, in cases where variety registration is compulsory, there are secondary decisions to make about what is necessary for registration, and if another decision is necessary for seed sale, what are the factors involved in that decision. When variety registration is compulsory, these secondary decisions can have an important impact on the liberal or illiberal character of seed regulations. Some of these secondary considerations are discussed as well. Some seed experts use the term "variety release" to mean government approval of a variety for seed sale. This term introduces confusion into the discussion. According to common usage, variety release is a decision on the part of any breeding organization - private comnpany, university, national research institute, etc. - to make a variety available for commercial production and sale. This has nothing to do with government 13 decisions about whether or not to allow seed for sale, variety registration, PBR registration, etc. In the US, India, Malaysia, and some other countries, variety registration is voluntary for all crops, which means that farmers look at new varieties in dozens or even hundreds of seed company test and demonstration plots and then company experts decide on the basis of expected farmer interest how much seed of what varieties to produce. In the US, government has no role in deciding what varieties are allowed to reach the market. In the EU, variety registration is compulsory for a list of major and minor field and pasture crops and vegetables. However, every EU country automatically accepts varieties registered by every other EU country (with rare exceptions). What this means is that even though an EU government (e.g., Spain) might go through the motions of testing and evaluating varieties, it nevertheless allows companies to sell seeds of all varieties approved throughout the EU, including even varieties that are not at all reasonable. for the country. Seed companies, of course, are not going to offer the same varieties in Spain as they do in Sweden (even though laws allow them to do so), since a company could lose its reputation and mnarket share if farmers see poor demonstrations or buy seed that does not perform. Among developing countries, India's and Zimbabwe's seed laws, dating from 1966 and 1965, respectively, are designed for voluntary variety registration (though Zimbabwe shifted to compulsory variety registration for 11 species in 1993). However, during the 1990s, a large number of developing and transition countries (e.g., Albania, Bulgaria, Croatia, Ethiopia, Kyrgyzstan, Romania, Slovenia, Uganda, and many others) approved new seed laws with compulsory variety registration, often for all species. Some of these countries -- eg, Albania, Bulgaria, Romania -- later amended these new but ill-designed laws to establish more open systems. In many developing and transition countries, recent debates about variety registration have focused on whether or not compulsory variety registration is desirable. Below attention will be given to advantages of voluntary and compulsory variety registration. However, this comparison may blur some of the most important questions. Tripp and Louwaars (1997: 106)' argue that the choice between both may not be the most important one of the issues. Much will depend on how policies are implemented. Compulsory registration can be done in a transparent and efficient way or with high costs and biased against the private sector. In many cases compulsory registration is done through time consuming and expensive official in-country DUS, and VCU tests. However, registration may be managed much differently. In Jordan, variety registration is compulsory for vegetables, but seed companies can do so by simply filling out a form and submitting it with a seed sample that is put in the freezer in case there is a later complaint that seed sold is not as described. The challenge in regulatory design is to work out a system that meets concerns and does so at least cost. Laboratory Tests and Field Checks for Seed Quality One set of design issues for seed laws and regulations deals with quality of traded seed (e.g., percent germination, percent noxious weed seeds, percent other seeds, etc). These include: Does government set minimum standards for seed quality from laboratory tests (e.R.. rate of germination. percent of seeds of other species. percent of non-seed matter)? Many if not most countries set compulsory mninimum standards according to species, while others (e.g., US) allow companies to sell seeds with low germination and purity as long as they are truthfully labeled. Another option is to set minimum standards, but to make them voluntary, so that seed not meeting those standards can be clearly labeled and sold as sub- standard seed (e.g., Zimbabwe's seed regulations allow this practice). Setting comrpulsory minimum standards does not affect most commercial seed sales, especially for larger companies, which often maintain their own higher standards in any case. However, minimum standards can create problems. For example, minimum germination standards may block introduction of an otherwise attractive variety with genetically-based low germination (e.g., super sweet maize); when such seed is truthfully-labeled for low germination, farmers can compensate with a higher seed rate. Another difficulty with compulsory minimum standards is that companies have trouble unloading treated seed for which germination has fallen below the minimum limit. If it cannot be sold as seed (truthfully labeled as sub-standard seed), and if it cannot be used for food or feed (because it has been treated), the company must destroy it. When companies are forced to absorb unnecessary losses on old seed, they adjust by producing less seed (increasing risks of shortages) and/or raising prices to cover losses. Finally, allowing sale of-clearly labeled - substandard seed allows government to set somewhat higher standards without creating unnecessary problems for farmers and seed traders. On the other hand, an argument for minimum standards is that farmers may buy seed without understanding trudtfully labeled substandard seed. 14 Are official laboratorv tests voluntary for all crops. compulsorv for some crops, or compulsorv for all? In many countries, governments aUlow companies to sel seeds based on (unofficial) company laboratory tests, but offer official tests as a service that seed companies can buy. In others, governments demand that seed companies send samples of all seed lots (for some or al species) along with testing fees to official laboratories. Results from official lab tests determine whether or not seeds can be sold, and also determine information that goes on the label. Advocates for voluntary official tests point out that: (i) compulsory testing takes time and money which boosts seed prices; (ii) farmers might not value official tests, but there is no way to know whether that is the case if tests are compulsory; (iii) seed companies in competitive markets have strong market incentives to sell good quality seed and do their own tests to meet their own internal standards; (iv) systems with compulsory tests are subject to corruption and abuse, and may end up approving bad seed for a bribe or rejecting good seed for want of a bribe; (v) even good results from official tests provide no security that seed wiU be good at the retail level, since seed quality can be damaged through mixing, mishandling, time delay, bad storage, and other deliberate or accidental processes before seed reaches farmers. On the other hand, advocates for compulsory official laboratory tests argue that legal systems may be too weak to enforce truth-in-labeling, so that process controls are necessary. As already argued, process controls are next to useless if truth-in-labeling cannot be enforced, since there are many opportunities for fraud and mishandling between compulsory laboratory tests and retail sales. In countries that impose compulsory official laboratory tests, this is often limited to the same crops for which seed certification is compulsory. However, there are exceptions. For example, Malawi demands official laboratory tests for aUl commercial seeds produced in Malawi. Economic arguments for compulsory official tests weaken for crops with limited economic importance. Is seed certification voluntary for all cros or compulsorv for some crops. and if so. for what crops? Seed certification is an assertion by an official agency that a specific lot of seed is of the variety that it claims to be. (Most official certification schemes also demand official laboratory tests for other quality indicators such as germination, but those issues, strictly speaking, go beyond certification). Seed certification requires that the variety be registered first, so there is a known variety against which to certify the seed (hence, compulsory seed certification for a crop depends on compulsory variety registration). To certify seed, an official field inspector must visit seed plots several times throughout the growing season. Just as for official laboratory tests, seed companies are normaUy required to pay a fee for seed certification. In many countries (e.g., US, India) seed certification is voluntary for al crops. In many other countries (e.g., EU, Malawi) seed certification is compulsory for some crops and voluntary for others. In the EU, for example, seed certification is compulsory for most field and pasture crops (species listed in EU Common Catalogues) but voluntary for all vegetables (including species in EU Common Catalogues) and other species. In Malawi, seed certification is compulsory for hybrid maize and tobacco only, and voluntary for all other crops. Arguments for voluntary seed certification include all of the above arguments for voluntary variety registration (since compulsory seed certification makes it iUlegal to sell seed of unregistered varieties, including antique varieties, land races, etc, as already discussed). Other arguments for voluntary seed certification are similar to those for voluntary official laboratory tests: (i) companies can do their own field checks and report varietal purity on labels; (ii) companies in competitive markets have incentives to maintain high standards; (iii) compulsory certification tempts officials to collect bribes; (iv) farmers and companies might or might not value official seed certification, but there is no way to know that if it is compulsory; (v) ensuring seed quality in production does not ensure seed quality at the retail level since deliberate and accidental events can damage seed along the way. Whatever arguments there may be for compulsory seed certification, the case rests on the assumption or assertion that compulsory certification for one or more crops improves seed quality, and that farmers are better off not having an option to choose uncertified seed. Experience across countries shows that compulsory certification for a list of (major) crops is feasible, but as already discussed may have more drawbacks than benefits. Some countries demand seed certification for all species, which does not make any sense, since it entails compulsory variety registration for all species, which is unreasonable, and also demands government observation of seed plots for all species, including ornamental flower, etc. Also, most of the best vegetable seeds in the world are not available as certified seed, and companies that own the varieties would not cooperate in certification schemes, at least in part because parent lines are so valuable. Does government accredit (license) private companies and inspectors to do official laboratory tests and seed certification? Whether official laboratory tests and seed certification are voluntary or compulsory, govermment can in either case insist on doing all official tests and field checks itself or accredit (license) private experts or companies to do some or all of them. In recent years, accreditation is becoming more comunon. ISTA, for example, has begun to work with private laboratories issuing ISTA certificates. Official certification agencies in South Africa and Zimbabwe allow private seed associations to test and certify seed. Accreditation can facilitate competitive markets - allowing accredited seed comnpanies to sell seed on the basis of their own quality assurances. However, with the wrong design it can also undermine competitive markets. For example, if the seed law requires official tests for seed sale, the government mnay shift responsibility for such tests to a private seed organization and suspends its own tests. This will only work satisfactorily if the empowered private seed organization has the obligation to do the tests for every interested party and cannot limit those tests to its members only. Otherwise this would create an oligopoly. Along the same lines, if government requires certification and/or official tests and accredits large companies to do their own field inspections and tests, but does not accredit small companies, who must continue to work with time- consuming and inefficient government agencies, accreditation can favor bigger companies over small ones. Accreditation is gaining adherents in the seed industry. Furthermore, it is something to be encouraged, because it can give companies more options for necessary tests. However, for those who are interested in promoting a competitive private seed industry with small and medium local comnpanies along with the big ones, accreditation should not be seen as an alternative to good regulations. Specifically, accreditation does not solve the problem that small companies have with compulsory seed certification and official laboratory tests. Some combination of accreditation and shift to voluntary certification and tests may be best for all companies - and for farmers. Does government demand in-country laboratory tests and/or seed certification from country of origin for all imported seed? A large ffhare of the world's international seed trade is intra-company trade. In some cases, companies import unprocessed and unpacked seed, in other cases, packaged and labeled seeds. While phytosanitary controls are important for all international seed trade, developed countries commonly allow import of otherwise untested and unpacked seed and - for packaged seed - accept certification and/or laboratory tests from selected countries. Two treaty organizations - International Seed Testing Association (ISTA) and OECD Seed Schemes - have been established to set standards, respectively, for seed testing and seed certification for seed exports from member countries. Developed countries accept seeds with ISTA and OECD certificates without question. On the other hand, many developing countries limit seed import (except small quantities for research and tests) to certified seed and/or repeat laboratory tests in-country before allowing seed sale (even for seed with ISTA and OECD certificates). While there are quality risks with imported seed, stringent and mandatory tests and controls on all seed imports may not be the best way to address them. Regulations and practices that allow companies to operate and at the same time allow governments to control phytosanitary risks and fraud include: (i) allowing seed imnport with phytosanitary controls only, without insisting that imported seeds meet any other quality standards; (ii) whenever official tests or certification are required for local seed sale, accepting ISTA laboratory tests and OECD seed certification as equivalent to in-country official tests and certification, so that imported seeds can move expeditiously into wholesale and retail trade, and (iii) negotiating bilateral and multilateral arrangements with regional or other partner countries for mutual reductions in seed trade barriers. Whatever governments do to control seed trade at the border, truth-in-labeling at the retail level is necessary to ensure that problems do not develop between import and retail sales. Finally, most of the problems reported for imported seed in developing countries are associated with donor, government, and NGO seed import and distribution. In the short run, governments can address these problems through better administrative controls over public sector and NGO seed programs. In the long run, the solution is to encourage expansion of a competitive private seed industry, so that there are no longer opportunities or incentives for governments, donors, and NGOs to import and distribute second-class seed. Whether or Not to License Seed Growers, Processors, and Traders As part of efforts to ensure quality seed, many governments -- particularly those with a legacy of socialist management - regulate who can be involved in seed production, processing, and trade. This approach to seed quality does not recognize or appreciate seed companies as the primary agents organizing and managing seed production and trade. In competitive markets, seed companies sell on the basis of a reputation earned over years for delivering good seed and product information. To do so, companies supervise contract 16 farmers and wholesale and retail traders to ensure that they take good care of the company's seed. In some countries - e.g., Ethiopia, Bulgaria, Kyrgyzstan - seed laws give MOA authority to register farmers allowed to grow seed on the basis of criteria such as equipment available, etc. Registering farmers allowed to grow seed limits the flexibility of seed comnpanies to hire and fire contract farmers so as to enforce production of good quality seed at the lowest possible price. Government interference also carries a bias towards large mechanized farms, when experience with commercial seed production in India and other developing countries shows that small farms can compete. Government interference in deciding who is allowed to grow seed threatens to undermine production of quality seed, boost seed prices, and bias seed production toward large farms. If seed is to be certified, companies must tell the govermment the location of plots to be certified. Other than that, government does best to leave choice of seed growers to companies. As already discussed, registering seed companies - compiling a list of local companies responsible for labeling seeds - may or may not be part of arrangements to enforce truth-in-labeling. To facilitate entry by small and medium local companies for maximum competition across all crops - including non-hybrids with low potential for mark-up - any licensing or registration process can set simple objective criteria (e.g., tax registration, permanent business address) and low fees. In many countries, seed laws give MOA authority to register wholesale and retail seed traders. In other countries, such as Malawi, anyone with a general trade license from the Ministry of Commerce can handle seeds. Requiring all seed traders -- especially retail traders with low turnover - to register with MOA is a barrier to entry that can be a significant obstacle to development of articulated trading networks that are able to give farmers convenient access to seed at competitive prices. In countries with emerging seed markets, existing retail stores might be willing to put some seeds on the shelf, but this might not be possible if it is illegal to sell any seed without applying and paying for an MOA permit. If seed companies are going to enforce good handling of their seed, they need to be able to hire and fire distributors and to pull their seed out of some retail stores and put it in others. All of this is constrained if they can only sell seed through traders with MOA permits. Also, new small and medium seed companies may have trouble establishing trading arrangements if they have to work through established traders, many of which may be tied up with larger established companies. Hence, MOA licensing of seed traders tends to reduce competition, threaten seed quality, and favor large and established seed companies. If MOA does not want to drop all licensing for seed traders, an option is to set a minimum annual seed turnover below which seed traders do not have to register for MOA. This would allow competitive retail trade to expand with less difficulty into new markets. Source: David Gisselquist and Comelis Van de Meer, 2001, Regulations for Seed and Fertilizer Markets-A Good Practice Guide for Policy Makers, Rural Development Working Paper, Rural Development Department, World Bank, Washington, D.C. 17 Annex E Reforming Land Policy and Land Administration: Lessons from International Experience Global experience show that more secure property rights could affect productivity by (i) imnproving households' security of tenure and thus their ability (and readiness) to make investments; (ii) providing better access to credit; and (iii) reducing the transaction costs associated with land transfers. Secure long-term individual property rights are directly linked to higher demand for investment. For example in Ghana, having more secure tenure to a plot increased the probability that individuals would plant trees, and undertake a wide range of other investments such as drainage, irrigation, mulching, etc. (Besley 1995). The need for secure ownership rights over a sufficiently long time horizon which need not necessarily be a formal title to facilitate improvements also emerges from Burkina Faso (Brasselle et al. 1997) and Niger (Gavian and Fafchamps 1996). Providing producers with residual rights to production and more secure rights to land, even if the latter are only of a temporary nature, will increase individuals' incentives to exert effort, as is illustrated not only by the tremendous increases in output and productivity associated with the transition from collective to individual (usufruct) rights in China but, more importantly, the relevance of such rights for investment and off-farm employment that is demonstrated in a number of studies. A specific bundle of property rights can be characterized by (i) its breadth, which may include, among others, right to exclude others, right to enjoy fruits, right to sell, right to lease, right to mortgage, right to pass by inheritance; (ii) its duration, i.e. the length of time attached to the rights enjoyed on a particular plot of land (or in general to land accessO; and (iii) the level of assurance, i.e. the ability of the land right holder to enforce those rights, the confidence in this ability, and the transaction costs associated with doing so. A second issue relates to credit access. In addition to augmenting demand for investment, secure formal land ownership can increase the supply of credit to undertake investment from formal sources, thus making an important contribution to the evolution of financial markets in more general terms. The reason is that, because of its immobility and virtual indestructibility, land to which secure, clearly defined, and easily transferable ownership rights exist is an ideal collateral. Formal title to land would therefore not only increase individuals' incentive to undertake land-related investments but also reduce the cost of credit that might be needed to undertake such investment. The importance of this "credit supply effect" is supported by evidence from Thailand (Feder et ai. 1988), Brazil (Alston et al. 1996), Honduras (Lopez 1997), and Paraguay (Carter and Olinto 1997). Studies that go beyond this are very much required. Third, regarding transferability of land, written records of land ownership allow to verify the ownership status of land at low cost, thus reducing the scope for asymmetric information about land ownership and quality and making land transactions cheaper to implement. This reduction of transaction costs would increase the liquidity of the land market, thus bringing the number of efficiency-enhancing transactions closer to the optimum and helping to establish a more viable financial system. That the ability to transfer land between users may be of limited importance in early stages of development when there is little heterogeneity of skills across the population, as long as non-agricultural opportunities and inter-regional migration are limited, and in environments with lower productive potential where no land market exists. Such arrangements may achieve considerable social equity and environmental sustainability and mechanisms to improve the ability to achieve these goals are of great importance. However, as the importance and value of being able to transfer use- or ownership- rights to land increases with economic development, specialization, and better functioning of other markets one would expect the transferability of land brought about by better defined property rights to become of economic relevance only with higher population density. Indeed, in China, more secure transfer rights can be shown to be associated with higher allocative efficiency in the economy (Yao 1996). In situations where full private ownership is not possible, secure long-term leases can provide levels of tenure security that are adequate to provide investment incentives. If individuals have long-term leases that are secure, transferable through sales as well as inheritance, and renewable upon expiration, the rights they enjoy may be little different from those acquired under individual ownership. China is a good example to illustrate this point. For urban land, individuals or firms can obtain long-term use rights (70 years for residential use; 50 years for industrial use) which can be renewed against payment of a fee, transferred, bequeathed, and mortgaged within the specified lease period. As a result, in the coastal provinces, a normal market in land use rights has emerged. Rural land rights were initially much less secure, subject to redistribution by village authorities, and awarded under shorter term leases (15 years). However, realization of the investment disincentives associated with short lease terms and in particular the scope for interference by village cadres has prompted the Central Government to increase the lease term to 30 years. Similarly, in 18 countries such as Vietnam, Cambodia, and Laos, the Government in giving individuals secure long term lease rights to state lands and to create the basis for effective markets in such use rights, even though land ownership remains vested in the state. They can also contribute to sustainable rural development and help the next generation to maintain its links with the rural space. Emerging evidence suggests that this can increase not only agricultural investmnent but also households' ability to engage in off-farm activities and thus contribute to broader rural diversification, thus malding a direct contribution to the reduction of poverty. This can provide lessons for other countries. While farming on household plots has universally emerged as an important social safety net in virtually all of the countries, the optimum farm structure will depend on the extent to which markets for inputs, outputs, and credit function, the wages that can be obtained in the nonagricultural sector, and local governance structures, illustrating that support in the area of land policy is but one important input in a broader rural strategy. The institutional infrastructure to maintain individualproperty rights Based on the insight that land rights which can not be enforced will not provide benefits to those who hold them, countries have supported efforts to establish the institutional infrastructure to effectively administer land rights. The experience from Thailand, where the Government has been carrying out a very effective long- term program for land titling, suggests that, in order to be effective, such institutions need to be legally valid, authoritative and complete, accessible and cost-effective, and institutionally as well as financially sustainable. Lessons leamed from different and often more complex contexts in various countries point to some important principles, which are discussed below. Complete coverage: The purpose of a land registry is to provide an authoritative record of the status of land ownership. It is therefore essential that this institution be complete and define unambiguously the status of individual parcels. The ensuing desire to establish a unified framework that covers both rural and urban areas will likely have to occur in phases. The equity benefits and externalities arising from a complete registry, together with the cost advantages of a systematic approach, have also favored systematic approaches to titling and to go for nation-wide programs which, embedded in a national land policy framework, will eventually cover the whole country. This task is of inmmense proportions in virtually all countries, the need for moving quickly arises especially in post-communist or post-conflict transitions. In Cambodia for example, the Government in preparing a project where almost 6 million initial claims were lodged. By dealing with such demands quickly and efficiently will have a major bearing on the ability to make a peaceful transition towards sustained economic growth. In different situations, there are various options that could help in meeting this challenge. Note, however, that universal coverage does not mean uniformity of standards; in fact in view of the differences in land values within a country it is normally useful to have different standards of evidence and precision apply to different types of land. Legal validity: Without providing a legally valid record of land ownership, the very rationale for the existence of land records will be put in question. However, in many of the cases, laws governing land ownership and use are either outdated or reflect a contradictory and inconsistent amalgamation of provisions. This is the main reason why most land administration projects have transcended the merely technical aspects of mapping and registration and incorporated major elements of legal reform, institutional restructuring, as well as land rights clarification and conflict resolution on the ground. Previous work points towards the disastrous impacts of land right insecurity on governance and economic outcomes. Land conflicts account for a huge share of court cases in (post) conflict societies such as Nicaragua, Sri Lanka, and Cambodia. Data suggest that, in Cambodia, more than 50% of all court cases and 85% of all cases presented to the Commission on Human Rights, were land-related to land (Cambodia Land Project) and that even in Indonesia, land disputes are reported to account for 65% of all court matters (Wallace 1999), and hundreds of land-related deaths are reported from Niger. Without establishing principles according to which these issues can be resolved, efforts to improve governance and establish widespread respect for the rule of law will, at best, remain hollow. In addition, since such conflicts normally involve high-potential or peri-urban areas, the economic losses imposed are likely to be immense, even though little rigorous evidence to quantify them exists thus far. Recent work indicates that, in the case of Africa, unresolved conflicts effectively eliminates business investment and development on what are often the most valuable lands in the country (Farvaque and McAuslan 1992). Similarly, in Central America, legal confusion following a legacy of expropriations in the 70s and 80s reduces investment in peri-urban as well as the most productive rural areas. In Nicaragua, for example, the potential for diversification and investment in export crops on most of the highly productive lands that were, under the Sandinista land reforms, given to cooperatives remains unutilized. To the contrary, the need to spend scarce 19 resources to fend off (spurious) legal challenges to land ownership is one of the reasons for the de- capitalization and non-cultivation of huge swaths of fertile land as well as the acute impoverishment of many of its inhabitants (IRAM 1999). Conflict resolution: Establishing a legal framework that minimizes the emergence of new conflicts and provides accessible mechanisms and procedures to settle old ones is a necessary but not sufficient condition for a sustainable solution. The latter requires, in addition, the establishment of an administrative or judicial infrastructure that can quickly and authoritatively settle conflicting claims. The case of Mexico provides a good illustration for the potential magnitudes involved and the specific elements required. Following far-reaching changes in the legislation, the country established not only a decentralized system of 42 agrarian courts but also provided legal assistance to mnake those who were affected aware of their rights. This dedicated system of courts spent more than 4 years to deal with the accumulated backlog of cases and discussions to integrate the infrastructure establish into the regular court system, which has very little rural presence, are underway (Zepeda 2000). This highlights not only that, in cases where the regular court system does not have rural presence, the need for quick and decisive administrative action may need to be complemented with the strengthening or establishment of independent judicial bodies that can deal with legal issues on a sustainable basis. It also emphasizes the need to adopt procedures which, while being accessible to those in need of redress, needs to make efficient use of public resources, possibly by complementing it with a system of alternative conflict resolution that encourages out of court solution of conflicts. Land conflicts, in some cases exacerbated by and inter-mixed with ethnic issues, are pervasive in many rural areas of Africa and often have their roots in historical appropriation of land rights by colonial powers. The need for measures to resolve these is a recurrent theme in many of the more recent policy-documents on the issue (e.g. Uganda's 1998 Land Law and the report of the Presidential Commission of Inquiry on Land Policy Reform in Malawi which is still under revision). While in cases where the legal system is accessible, this will not necessarily require a specialized system of courts, a cost-effective approach of facilitating access to justice could do much to promote good governance in rural areas where the rule of law is often fragile and tenuous. Itinerant courts, which are currently being discussed in a number of African countries, could provide an opportunity to combine the goals of broad coverage with the need for cost-effectiveness . Institutional sustainability: Legal confusion often arises from the existence of parallel registries, the responsibilities of which are not clearly separated. These may be the legacy of an institutional structure geared towards political goals or objectives other than efficient land administration. Examples documented in recent studies by the World Bank are, in addition to ECA and FSU countries, Bolivia and Mexico, Nicaragua, Ghana, Malawi, the Philippines and Indonesia. The case of Bolivia illustrates the confusion and insecurity that can arise from this, as well as the scope for dealing with it through legislative action and institutional reform. Similar efforts to eliminate parallel registries and thus establish the legal and operational framework that can then serve for a systematic process of adjudication and land regularization are underway in the Philippines and in Sri Lanka and Peru. In many countries of Latin America and Africa, centralized institutions were put in place to control the land resource and retained relatively unchanged thereafter. Moving towards a more decentralized structure can, in addition to saving costs and eliminating unnecessary bureaucracies, enhance transparency and accountability and help use land administration as one element in a strategy to promote good governance. While centralized entities should remain in charge of policymaking, coordination, and establishment of standards and norms, experience shows that day-to day management and operation of the registry can and should be done at the local level. In addition to ensuring the adequacy of institutional arrangements before moving towards large-scale titling initiatives, past experience also highlights the importance of making sure that the land administration infrastructure established through project interventions will be sustainable in the longer term. The most critical factor in this context is related to the incentives for subsequent registration, something that is closely linked to the benefits which individuals perceive to be associated with such registration, as well as the cost of doing so. Key areas of attention in this context are how much revenue can be generated from sale of cadastral information, to what extent cross-subsidization of urban and rural systems is feasible, the extent of procedural streamlining of non-related requirements (e.g. solvencies, tax receipts, etc.) to facilitate registration, and how high fees for registration of subsequent transactions can be set before they start discouraging such registration and thus, by driving land owners into informality, threaten to undermine the sustainability of the registry. Close monitoring of the impact of approaches taken in different countries in Eastern Europe, Asia, and Latin America should enable us to develop an answer to these questions which are obviously of great importance. Financial sustainability: The case of Thailand, where a comprehensive program of land titling has provided the basis for a substantial increase in the total amount of land revenue collected, from US $ 300 mn in 20 1984 to 1.2 bn in 1995, suggests that, even if revenue from user fees remains limited, a well-designed system of land administration can have significant fiscal benefits. In fact, in many developed countries property taxes, i.e. taxes on immovable property and buildings, constitute an important source of local government revenues and there are a number of cases where developing countries introduced land tax systems. The principle obstacles to effective implementation of land taxes, in addition to political resistance, are the administrative costs of collection and the ability to use existing maps for taxation purposes. The justification for such resistance is rapidly eroding in view of the progress made in administrative decentralization and establishment of a land administration infrastructure in many countries. Partly as a consequence, land valuation components and an emphasis on increased transparency of land tax collection are seen as critical in a number of recent experiences (e.g. in the Philippines and Laos). The experience from these countries, as well as additional cases, will allow us to identify situations in which land tax revenue could be generated in a sustainable manner without having undesirable equity effects and, if appropriate, the issue at the country level. In view of the large differences in cost per title or survey, it is important to consider that whatever system is to be implemented remains affordable. I Incentives for rational land use: In addition to helping govenmments generate revenue, taxes can also increase incentives for rational land use. However, instead of utilizing this potential, many governments rely on other more discretionary approaches that are often ill-suited to efficient land use and which are shown by research as well as project-related studies to also have a negative equity impact. Many countries have a "social function" of land and property in general in their constitution. In a number of developing countries this is interpreted as implying that land tenure should be conditional on specific patterns of behavior, something which is difficult to enforce and can give rise to a large bureaucracy who may use this as a means for rent- seeking. In urban areas, this introduces a large element of discretional interpretation that undermines long-term investment incentives by business. In rural areas, determining what constitutes "proper use" is equally difficult and often results in land tenure becoming discretionary, land values to go down, and confidence in the property rights system to suffer. World Bank sector work has pointed out that either adoption of regulatory instruments (in case there are true externalities) or to use fiscal incentives such as a land tax are likely to achieve the same purpose with less distortionary side-effects and has argued for a gradual relaxation of these restrictions. The same is true of other legal stipulations such as limitations of agricultural land use to certain crops in South and South East Asia (e.g. Vietnam, Sri Lanka, Indonesia). Source: Klaus Deininger, 2001, "Land Policy and Administration: Lessons Learned and New Challenges for The Bank's Development Agenda", Draft mimeo. 21 Annex F. Rural Household Incomes and Agricultural Activities in Sri Lanka Introduction Data from the mid 1990s indicate that between 20-25% of Sri Lanka's population lives below the national poverty line (World Bank, 2001). The vast majority of the poor (90%) reside in rural areas and derive their incomes from a diverse range of farm and non-farm activities. Among the rural poor,' 40% participate in agricultural activities (own farm activities and/or casual agricultural wage employment), and 66% participate in rural non-farm employment, deriving 24% and 57% of household incomes from these activities, respectively. Strategies available for increasing rural household incomes include raising farm productivity and/or participating in rural non-farm employment. Yet, numerous constraints ranging from land and labor policies to the absence of adequate infrastructure have limited opportunities for raising rural incomes. Using data from the 1999/2000 Sri Lanka Integrated Survey, this note examines employment strategies and sources of income for rural Sri Lankan households. In particular, it analyzes factors determining rural household participation in non-farm employment and constraints to crop diversification. Rural Employment Activities Survey data indicate that 36% of rural households in Sri Lanka have one or more household members employed in agricultural activities (self-employed in farm production or participating in casual agricultural wage labor). The dependence of rural households on agricultural employment varies across levels of consumption with agriculture being a relatively more important source of employment and income for poor rural households. Forty-two percent of households in the bottom two quintiles are employed in agriculture. The wealthiest households, on the other hand, are least dependent on agriculture as a source of employment, with only 24% participating in agricultural activities [Table 1]. Among various agricultural activities, the poorest households are most dependent on agricultural wage employment. Twenty percent of the poorest households participate in casual agricultural wage labor compared with 9% of other households [Table 1] Although agriculture continues to be an important source of employment and income, participation in rural non-farm activities is an increasingly essential livelihood strategy of rural Sri Lankan households. The importance of rural non-farm activities as sources of employment is clearly evident from the fact that 70% of rural households participate in non-farm employment (i.e. one or more members of the household participates in casual non-agricultural wage employment, salaried employment, business/trade or personal services). Even among rural agricultural households,2 49% participate in rural non-farm activities. Numerous "push" and "pull" factors induce households to participate in non-farm activities. Some of these factors include higher returns to labor in the non-farm sector, imperfections in factor markets such as land, absence of or failures in input and credit markets, and the risks inherent in farming that prompt households to diversify incomes by pursuing activities whose returns are not correlated or are negatively correlated with those of farming (Reardon, 1998). Previous research from Sri Lanka indicates that land constraints, along with higher returns to labor in non-farm employment, influence household decisions to work off-farm (World Bank, 1996). Given the importance of non-farm employment as a source of income, the following section explores determinants of participation in non-farm activities. The poorest households are defined as those households that fall in the lowest per capita expenditure quintile. 2Agricultural households are defined as those households that cultivate crops, raise livestock or participate in casual agricultural wage labor. 22 Table 1: Employmgnt Activities of Rurl Houseolds by Exendoture Quintiles' Employment Actites Poorest Second Third Fourth Richest Averoze Agrculural wage 19.77 14.33 10.88 7.62 318 11.16 Non-a. wage 43.95 34.86 2944 25.27 14.56 29 62 Salary-public 9.34 12.75 17.20 24.68 30.58 18.91 Salary-private 18.85 22.71 23.66 24.37 22.97 22.51 Estate 6.02 2.50 2.19 1.10 0.95 2.55 Pettybusiness/trade 6.40 1008 13.59 14.44 19.66 12.83 Major busaness/trade 0.00 0.46 0.52 0.70 0.91 0.52 Pesonalasrvices 1.39 2.29 1.82 2.10 264 2.05 Own lrrm 22.10 35.28 33.31 26.79 21.19 2773 Fishing 1.08 1.42 1.44 1 34 1.20 1.30 All Agrlrullre 39.34 45.47 41.44 32.16 23.60 36.40 All Noa-aalculture 66.03 66.23 69.82 74,24 74.83 70.23 Determinants of Participation in Non-farm Activities Participation of households in non-farm employment is analyzed econometrically by estimating a probit model where the dependent variable indicates whether the household participates in non-farm activities or not. The regressors include the asset position of the household, household size and composition and conmmunity and regional variables. The regression results are summarized in Table 16. The following observations are of interest: Asset ownership is an important determinant of household participation in non-farm activities. Households with more cultivable land and livestock are more likely to enjoy higher returns from farming and thus less likely to engage in off-farm employment. On average, 28% of rural households own cultivable land and 10% own some form of livestock [Table 2]. The rural poor own fewer assets than non-poor households. At the sample mean, an additional hectare of cultivable land is associated with an 18 percentage point reduction in the likelihood of participating in non-farm activities. As the majority of households cannot sell land or increase the size of their landholdings, non-farm employment provides an opportunity to supplement meager farm incomes. Livestock ownership also reduces the likelihood of participating in non-farm employment by 10 percent, at average values of other variables. Table 2: Omnership ofAsses (land and lii'astock) by expediture qmuntile Tpae oaf Poores Second Third Fourth Richest Averae Raral housholds Own cultivable land 22.45 34.12 32.00 25.67 25.62 27.97 Own livestock 6,06 12.06 12 28 13.04 10.14 10.72 Own dwelling unit 75.37 7666 82.05 83.02 85.19 80.46 Agricutural HHs Own cultivable lnd 49.74 64.75 64.09 62.98 71.75 62.37 Own livestock 13.43 22.88 24.71 32.00 28 40 23.92 Own hweiilag unit 88.28 83.86 84.96 84.74 87.94 85.81 l Wealth quintiles are based on household per capita expenditures adjusted for regional cost-of-living differences. 2A household was classified as participating in a given activity if one or more members of the household reported working in a given activity. Many households participate in multiple activities. 23 In addition to physical assets, human assets such as education play a significant role in the household's decision to undertake non-farm work. Additional schooling of the household head increases the likelihood of participating in non-farm activities. The data also reveal that education plays a important part in determining household participation in the more lucrative non-farm activities such as salaried employment. An additional year of education of the household head, at the average values of other variables, increases the likelihood of participation in salaried employment by 3 percentage points. Access to infrastructure is another significant determinant of participation in rural non-farm activities. In general, lack of access to infrastructure such as roads, markets, telecommunications and banking services in rural Sri Lanka continues to be a major problen. Lack of roads and markets are particularly problematic for rural households since they limit opportunities for diversifying incomes by serving distant markets. Further, the lack of markets make it difficult to purchase inputs when required and increases the price of inputs. In addition to roads and markets, access to telecommunications (phones) is important for obtaining timely price information and marketing commodities. Thirty-nine percent of rural households in Sri Lanka live in communities that do not have main roads, 91% reside in communities without markets, 38% live in communities that do not have access to phones and over 40 percent of rural households do not have access to electricity [Table 3 and Table 4]. The importance of infrastructure in influencing household non-farm participation decisions is revealed in Table 16. Access to electricity and distance from the nearest main road are both significant predictors of participation in non-farm employment. Finally, household size and regional location affect household decisions to engage in non-farm activities. Notably, larger households have a much higher likelihood of participating in non-farm employment. At the average values of other variables, an additional household member is associated with a 7% greater likelihood of the household engaging in non-farm work. The absence of a land market which constrains the households ability to expand farm size as the household becomes larger may be one of the factors contributing to this finding. Household composition also plays a significant role. While households with more adult males have a greater likelihood of participating in non-farm activities, those with more children and elderly are less likely to be engaged in non-farm activities. Compared to other provinces, residing in Western Province is associated with more opportunities of participating in non-farm employment. Sources of Rural Incomes Not surprisingly, the sources of income for rural households mirror their employment patterns. The average monthly per capita income of rural households was Rs. 1310. Overall, 23% of rural incomes can be attributed to agricultural activities [Table 5]. The importance of agricultural incomes varies considerably across provinces. While 50% of household incomes in Uva province can be attributed to agricultural activities the comparable figure for Western Province is a mere 8 % [Table 6]. The importance of non-farm activities as sources of income for rural households is observed across levels of consumption. On average, 56% of rural incomes can be attributed to non-farm sources.' Casual non- agricultural wage labor constitutes the main source of non-farm incomes for the poorest rural Sri Lankan households. Thirty four percent of rural incomes for the poorest households are derived from casual non- agricultural wage activities as compared to 18% of household incomes for the rest of the households. While wage employment accounts for the bulk of non-farm incomes of the poorest rural households, income from salaried employment constitutes the majority of non-farm income of the wealthiest households. Fifty-two percent of the income of the wealthiest households can be attributed to salaried employment with approximnately two-thirds from public salaries. Similar to agricultural incomes, there are distinct regional patterns in the composition of non-farm incomes that emerge from the data. The share of casual non- agricultural wages in total incomes is highest in Southern province while salary incomes are a main source of income of rural households in Western province where they account for close to 51% of household incomes on average. I Non-farm income includes income from casual non-agricultural wage employment, salary income, income from business/trade/manufacturing, and income from the sale of food/forest products/handicrafts. 24 Table 3: Rural household acess to infrastructue (road,, ,arkets, tdelemmwcations and ban.b) by e diur quitiles' Poorest Second hiI Fourth Richst Total (% of households) Percentage of iHb living mn communities that hve a namin rod 54.90 60.30 60.76 64.42 64.59 61.09 PaemcageofHH livingincommunitiesthathavea narket 6.05 7.12 8.21 9.64 13.46 8.96 Percentage of His living in communities that have a phone 5252 55.91 59.49 66.04 74.77 61.94 PercAstage of HHs living in commnunitis that have a bank 8.06 11.26 12.77 14.37 24.10 14.11 Distance (mniles) To a main rad int onmmnities whout access to a nain rad 2.73 3 21 2 60 2 05 1.91 2.53 To a narket in onmmunities without access to amarket 4 07 4.44 4 82 4.15 3.64 4.23 To a phone in comununiies whhout access to a phone 3.02 3.79 3.52 3 67 3.36 3.46 To a bank in comnmunhias wahout acces to a bank 4.51 4.53 4.58 3.96 3.43 4 20 (travel time in tninutes) To a noin mad in conm itnies wthout accss to a matin road 27.90 25.79 24.90 23.34 22.05 24.93 To a market in comnunnities whhout access to a market 33.39 36.42 36.28 30.87 29.19 .33.26 To a phone in communitles withou accs to a phone 31.70 36.39 32 87 33.22 31 38 33.23 Toabankinconmnunitieswithoutaccesstoahank 33.93 35.49 34.74 30.71 29.19 32.81 Table : UC of dctrity as a source of ligtiny sbyrurl and rural aagicultural households by eendirur ouintiles Poorest Second Th)rd Fourth Ricest otal Percntage of rural HHs 37.05 48 06 54.62 64.88 77.62 56.45 Percentage ofrural agricultural Hs 32.65 39.06 44.71 54.43 63.43 45.71 'Access to infiastructure services is based on community level data. Households that have access to a main road are households that live in communities that have a main road. Households that have access to a market are households that live in commnunities that have a narket. Households that have access to a phone are households that live in conmmunities that have a phone. Households that have access to a bank are households that live in commnunities that have a public and/or private bank. 25 TableS: Sourmes of umrl household comes by mgmnditure itilea (96 shares in towal monthly per capita income)' Source of income Pooret Seond Third Fourth Riches Toual Agriculture 23.51 27.65 29.06 21.60 18.22 23.33 Farm 12.69 19.31 22.47 17.66 16.37 17.82 Casual Ag. wages 10.82 8.34 6.59 3.94 1.85 5.51 Non-famrt 56.81 52.47 52.32 58 81 59 38 56.42 CasualNon-agwages 33.62 27.95 20.57 1927 961 20.15 Public Salaries 10.80 13.49 15.86 23.26 3306 2131 Private Salaries 13.56 14.72 16.89 17.20 18.75 16.68 Sacof frwm produds 0.79 1.07 0.80 0.85 1.07 0.93 Transfer 9.78 7.62 7 40 8.26 11.42 9.09 Sanerdhi 7.24 5.45 4.10 2.76 1.25 3.64 Farm subsidies 0.09 0.09 0.04 0 04 0.07 0 06 Remittances 4.77 7.10 5.94 6.21 447 5.61 Other 5.13 5.16 5.28 5.12 6.50 5.55 Fisheries 0 34 0.69 0.78 0.89 0.47 0.64 Esae 3.17 1.43 1.09 072 104 133 Total 100.00 100.00 100.00 100.00 100.00 100.00 Table 0: Sourca ofrurl household incoma by proeince (56 shares in total monthly per capital income) Source ofincome Wresre, Central Southern Nonheasten, Norrhwertem North Cm.t,al Uva Sabarqaamuma Total Agriculture 7.62 21.84 25.95 38.66 17 85 33.9 49.86 34.23 23 33 Farm 6.53 13.83 20.79 29 02 10.52 26.37 41.39 29.35 17.82 Caual Ag. wages 1.09 8.01 5 16 9.64 7.33 7 53 8 47 4.88 5.51 No-farm 73.78 53.7 54 86 41.63 60.66 41.79 32.86 45.81 56.42 Casual Non-g wages 21.55 21.57 25.38 1184 24.28 11.61 1077 21.65 20.15 Public Salaries 21.93 26.85 13.84 23 57 22.83 23 44 23.33 17.91 21.31 Private Salaries 29 13.28 13.77 8.72 13.92 5.45 10.47 14.7 16.68 Saleoffarm products 1.19 1.11 0.91 0.56 1.2 0.2 037 0.82 0.93 Transfcr 9.12 14.15 8.96 5.91 8.46 9.56 8.81 971 9.09 Sanurdhi 1.92 5.25 3.72 2.33 4.7 6.91 6.78 4 25 3.64 Farmaubidies 0.02 0.15 0 005 0.14 0 0.06 0.12 0.06 Remittances 4.25 6.47 4.22 9.41 6.75 6.47 2.47 3.9 5.61 Other 5.23 3.85 6.01 4.38 6 28 8.28 5.99 6.35 5.55 Fisheries 1.18 0 0.16 1.41 026 0.85 0 0 0.64 Estae 0.47 1.6 2.11 0 2.03 0 2.78 3.53 1.33 Total 100 100 100 100 100 100 100 100 100 Business profits were negative on average (i.e. on average households reported losses), hence the sum of shares of the various non-farm activities reported in Table 5 (casual non-ag wages, public salaries, private salaries and sale of farm products) may exceed the share of total non-farm income. 26 Transfer incomes (from Samurdhi payments and farm subsidies) are quite important and in fact, exceed the share of income from agricultural wage labor. Transfer payments account for 15% of incomes of the poorest households with a large share of transfer incomes attributable to Samurdhi food stamps. The importance of remittances as a source of income does not vary across consumption levels although distinct regional trends are apparent. Remittances add up to approximately 5% of rural household incomes. Income from remittances is highest in the Northeastern province where they account for roughly 10% of per capita household incomes. The importance of income diversification in livelihood strategies of agricultural households is apparent from the fact that 49 percent of agricultural households participate in non-agricultural activities. Non-farm income constitutes a large share of total household incomes of agricultural households, accounting for 34% of total income on average [Table 7]. Table 7: Sources ofrural ajricultural household incomes by egmcditum quintUlt (X share in total monthly tpre capita incomec Source ofincome Poorest Second Third Fourth Richest Total Agricultum 47.63 53.07 53.32 46.68 48.50 49.93 Farm 23.37 35.44 40 09 37 02 42 47 36.57 Casual Ag. wages 24.26 17.63 13 23 9.67 6.03 13.36 NoT,-frnm 36.88 32 01 29.59 39 48 32 25 33.89 Casual Non-ag wag 15.24 14.02 9.42 802 4.57 9.79 PublicSalaries 6.47 8.89 12.15 1991 26.21 15.40 Private Saliies 13.85 12.05 7.69 11.26 705 10.06 Saleof umtmproducts 0.97 0.68 0.91 1 17 1.36 1.03 Trnsfer 8.66 7 59 7.53 6.57 9.23 7.85 Sansrrdhi 7.30 6.44 4.30 3 14 1 82 4.35 Farmnsubsidies 0.21 0.18 008 0.10 0.23 0.15 RenFiaces 3.46 4.65 5.33 4.20 4,52 4.51 Other 3.37 2.68 4 23 3.06 5.51 3.83 Fisheries 0.13 0.11 0.20 0.00 0.94 028 Estat 1.00 0.81 0.49 0.27 0.06 0.48 Total 100.00 100.00 100.00 100.00 100.00 100.00 Characteristics of Agricultural Households In addition to engaging in non-farm employment, rural agricultural households can increase household incomes by raising farm productivity. The following section provides a description of the agricultural activities of rural agricultural households and their prospects for improving farm productivity. The non-plantation agricultural sector in Sri Lanka is characterized by small family farms, with paddy cultivation dominating the sector. The average farm size is approximately 0.60 hectares, with approximately 71 percent of households that cultivate crops operating less than 1 hectare of land, and 90 percent of households operating less than 2 hectares [Table 8]. Overall, based on land owned exclusively by household members, 17% of rural agricultural households are classified as being landless. Marginal farmers, who on average cultivate 0.22 hectares of land, account for approximnately 22% of all agricultural households [Table 9]. Table &: Te Operation and Ornhp ofCultivable Land by Houseiolds Enagmed in Farming by Eoenditure Quintes (land in hrectas) PooFst Second Third Fourth Richest Total Land owned 0.46 0.47 0.53 0.55 0.86 0.56 Land opealted 0.58 0.62 0.75 0.84 1.09 0.77 27 Table 9: Net ctivted na nnndtws cultivtedara ibyvfarm tie. Farm size landless ma,gmal small medium large Total % ofHHs 16.50 21.84 26.84 29.60 5.22 100.00 (% of nt cultivated amr) Land owned exclusively by theHH 0.00 90.97 92 02 90,82 900 7 78 64 LAndownedbyeatentedfmiilyofHH 27.15 104 0.71 013 0.04 4.21 LDO land 27.65 3.74 4.19 6.88 6.44 8.26 Sharecioppedi in 11.06 1.37 0.53 0.01 1.17 204 Leased in 34.14 2.90 2.56 2.16 2.28 6.84 (In hectr) Netcutivatedarca 0.55 0.22 0.54 1 15 2.68 077 Gross cutivated amr 0.80 0.36 0.70 1.50 2.33 0.96 Paddy cultivation accounts for approximately 30 percent of gross cultivated area. Sorghum, kurakkan and other cereals account for an additional 35 percent of gross area [Table 10]. Data from the SLIS survey reveal differences in cultivation patterns between rich and poor households. Notably, wealthier farmers2 are more likely to cultivate paddy and they account for 25 percent of the total rice area. The poor, in contrast, are more likely to grow other coarse cereals, maize and condiments. Regionally, paddy production predominates in the Northeast, Southern and North Central provinces and these three provinces together account for approximately 64 percent of the rice area [Table 11]. The production of higher valued crops such as fruits, condiments and vegetables accounts for approximately 15 percent of gross cultivated area. The production of these crops is most widespread in Uva, North-Western and Southern provinces and 60 percent of the area cultivated with these crops occurs in those provinces. Table 10: Pecentage of grs cultivated arem devoted to differcnt categoies of cr`p by eweinditure guintile' Poorest Sccond Third Fouth Rihest Avernge (Share of gross cultivated area ) rice 24 22 21.98 29.68 37.63 32.21 28.71 other cerals 36.43 42.95 36.50 28.95 26.12 34.98 maize 3 25 4.21 1.83 0.80 0 22 2.20 vegetables 5.87 6.76 8.31 7,68 6.54 7.10 lentib 2 36 2.51 4.12 3.12 0.72 2.65 condiment. 6.87 3.72 2.49 2 02 2.36 3.40 fruits 3.33 2.99 3.68 4 91 10 38 4.83 oilseeds 0.01 0.31 0.03 0.47 0.09 0.19 other cps 17.66 14.58 13.35 14.41 21.37 15.93 (F-) Grss culivaed area) 0.84 0.86 0.99 0.98 1.19 0.96 I Farm sizes are based on the amount of land owned exclusively by the household. Landless farms are farms where the household owns no land. Marginal farms are farms where the household owns less than I acre of land (0.4 ha); Small farms are fanns where the household owns between I and 2 acres (0.4ha-0.8 ha); medium farms are farms where the household owns between 2-4 acres (0.8ha-1.6ha); and large farms are farms where the household owns greater than 4 acres of land (greater than 1.6 hectares). 2 Those in the top 20% consumption quintile. 3 Note: Rice includes maha and yala paddy; other cereals includes kurakkan, sorghum, and other cereals; vegetables includes all vegetables, leafy vegetables and yams; lentils includes dhall, cowpea and other pulses; fruits includes coconuts, plantains, pineapple, mangoes, oranges and other fruit; oil seeds include soya bean and sesame. Other crops is as defined in the survey. 28 Table t1 Percentagebof dgrss culatedarea davotadto different cateaorles of Qs bvcpovtnce Province Western Central Southem Northeastem Northwastem North Central tva Sabaraganmuwa Total (Share of gross cultivated area %) rice 40.96 31.01 33.48 43.98 22.39 2226 18.63 25.31 28.71 other cereals 18.84 41.44 8.76 39.92 38.36 68.82 13.65 28.44 34.98 maize 0.00 0.00 0.18 0.03 0.87 1.91 16.32 0.12 220 vegetables 4.32 12.07 5.83 5.46 6.39 0.83 18.93 8.17 7.10 lentils 0.00 0.09 2.90 020 6.18 0.35 7.60 3.66 2.65 condiments 0.93 3.94 11.97 6.42 0.13 0.14 2.00 1.09 3.40 fruits 13.63 0.00 5.97 1.47 6.80 0.00 12.92 3.79 4.83 oilseeds 0.47 0.19 0.28 0.12 0.00 0.00 0.25 0.44 0.19 other crops 20.86 11.26 30.61 2.40 18.88 5.69 9.71 28.99 15.93 (hectares) Gross cultivated area) 0.75 0.88 0.87 1.48 0.80 123 0.75 0.77 0.96 Given high paddy yields and declines in the real price of rice, increasing paddy production is unlikely to help rural households escape poverty. Yet, despite low profitability, paddy dominates the cropping pattern and prospects for diversification of cropping patterns has been limited. According to the SLIS survey data only 41 percent of households reported growing a second crop [Table 12]. On average the poorest households and the wealthiest households appear to be least diversified. Thirty-eight percent of the poorest households and 36 percent of the wealthiest households reported growing a second crop. The comparable figure for the remaining households is 43%. Farmers attemnpting to diversify production in Sri Lanka face multiple constraints. Across farm sizes and provinces financial constraints coupled with the lack of credit and the lack of water were most often considered to be factors that discouraged diversification. Overall 61% of households claimed that financial constraints discouraged diversification while 55% reported that water was a mnajor constraint. Consistent with expectations, the proportion of households reporting financial constraints as a factor discouraging diversification is inversely related to household wealth. The fact that 86 percent of households in Uva province report lack of water as a constraint to diversification is also consistent with the fact that 73 percent of cultivable land in the province is rain fed [Table 13, Table 15]. In contrast, in Northeastern province where 90 percent of cultivable land is irrigated, approximately 70 percent of households also stated that lack of water discouraged diversification. This may be indicating irregularities in the timing and availability of irrigation water in the Northeast. The on-going civil war was reported as being a constraint for diversification in the Northeast. Finally, the lack of market infrastructure and poor roads were reported as constraints to diversification by 28 percent and 22 percent of households, respectively. Determinants of Cropping Diversification In order to further examine constraints to cropping diversification, determinants of crop diversification are analyzed econometrically using a probit model. The dependent variable is whether the household reported growing more than one crop. Although there was no data on some important factors affecting crop diversification such as availability and use of inputs (such as fertilizers and pesticides) and crop prices, the analysis does reveal some important factors affecting diversification. As summarized in Table 17, the availability of land increases the likelihood of growing multiple crops. At the mean, an additional hectare of land is associated with a 8 percentage point higher probability of diversifying cropping practices. Households with less land, who are also more likely to be the poorest/marginal farmers, may be more likely to cultivate staple crops to meet subsistence needs and less likely to diversify production. 29 rable 12: Famnz divtflncatio. wet iniatr by ecwendire,, quintiles Poorest Second Third Fourth Richest A verage (% of housholds) HHs that gswae s* ncrop 37 87 40.35 43.43 46.69 35.53 40.97 HI,thatoouldincreaseincombyuivativ ng asecondcop 73.83 65.52 6304 66.13 64.26 66.17 Factois discouragiag drtvekntio Financial constrai/credit 72.81 66 78 63.89 50.89 48.69 61.07 Lack ofwater 54.45 57.01 61.78 5202 49.03 55.41 Quality ofland 26.13 33.12 2467 2937 30.09 28.87 Lack oftechnical assistance 53.37 47.83 45.01 41.62 40.90 45.74 Lack ofap priate inputs 50.15 45.67 43.96 45.29 39.87 44.92 War druption 6.21 12.41 8.47 8.14 11.60 9.61 Crop dsaebyanimals 33.14 48.97 47.39 3741 37.54 42.01 Lack ofnrket 2974 30.63 26 55 25 96 29.43 28.50 Poor road acce 34.95 24.68 18.94 15.27 20.07 22.50 Table 13: Famtnhg dlersatcatbn constraits by prvince Province Western Central Southerm Northeastem Northwestem North Central liva Sabaragamuwa Total (% of households) HHsthatgrowasecondcrop 30.90 42.39 41.95 42.27 45.15 27.12 56.36 46.95 40.97 HHs that cowud Increase incomes by cultvabng a second crop 46.14 70.05 61.01 40.68 67.87 72.83 90.64 71.76 66.17 Factors discouraging dlveraflcation Financial constnts/credct 59.02 60.51 52.61 65.50 54.66 56.28 82.69 65.78 61.07 Lack of water 33.88 47.32 38.89 68.74 63.85 61.00 86.28 38.81 55.41 Qualityof land 54.09 13.05 32.93 20.36 26.75 25.06 35.13 33.49 28.87 Lack of technical assistance 42.66 50.17 47.30 34.30 26.47 36.86 78.96 61.05 45.74 Lack of apprrite inputs 49.34 44.99 45.31 33.14 32.26 29.48 82.46 59.98 44.92 War disruporn 1.00 0.00 0.90 40.65 0.10 25.48 0.00 0.00 9.61 Crop darnage by anirrals 31.23 35.01 23.19 63.89 25.21 5529 45.75 53.96 42.01 Lack of tmarket 18.15 41.63 8.84 35.92 13.15 41.59 47.67 22.58 28.50 Poor road access 12.04 50.35 10.06 22.37 5.85 24.96 41.43 20.05 22.50 In addition to land ownership, access to extension services, the education level of the household head, access to infrastructure (main roads) and regional location (proxying agro-ecological factors) are significant determinants of the likelihood of cropping diversification. Access to irrigation however does not appear to be a significant variable. Households with more educated household heads appear less likely to cultivate multiple crops. The negative coefficient on years of education of the household head may be explained by the fact that more educated household heads are more likely to participate in non-farm activities where the returns to education are higher. Access to extension is associated with a 14 percent greater likelihood in cropping diversification at the average value of other variables. The large significant coefficient on the extension variable is somewhat surprising given the relatively low level of access to extension services. Only 15 percent of households reported having access to technical assistance from extension agents [Table 14]. The regional variables may be capturing 30 other omitted variables correlated with location. The probit regression included a variable representing whether a household participates in rural non-farm activities. The literature on crop diversification indicates that households that participate in the non-farm economy may be in a better position to absorb the risks involved with diversifying production. In the case of Sri Lanka, where families are unable to exit agriculture without abandoning their land, it is possible that cropping practices are determined as much by on-farm patterns as off-farm patterns. The variable on non- farm participation however is not significant. Table 14: Acensto techanial asnttanwefrao extcelonagewcies Farm sze laeess marvnal small maedum tasTe Total (Paesctage of households) Allagencies(govcrnn2nt,NGOsetc) 11.75 9.20 12.23 23.12 16.83 14.95 Technical assisxamoefrom thegovernmct 9.24 8.20 11.54 20.43 14.76 13.23 Table 15: Use ofn*igation by provWnce' Province Wratern Central Southern Northeastemr Nanhwester Notth Central Uva S2baraganutae Total Major scheme 095 16.42 16.54 57.53 12.18 45.93 3.45 15.46 23.45 MiFor schemc 0.76 52.44 5.69 16.22 9.66 37.33 17.56 16 08 20.50 Well 2.70 0.97 0.45 15.61 8.23 0.11 3.14 0.48 3.71 Lift 1.32 0.86 0.91 0.19 5.90 0.46 3.33 1368 3.29 Itigaced 5.73 70.69 23.59 89 55 35.97 83 84 27 48 45 71 50.96 Rainfed 94.27 29.31 76.41 10.45 64.03 16.16 72.52 54.29 4904 Gross cultivated arem 0.75 0.88 0.87 1.48 0.80 1.23 0.75 0.77 0.96 Conclusions Given the multiplicity of livelihood strategies for rural Sri Lankan households, policy measures to address rural poverty need to focus on both the farm and non-farm sectors. Two factors have consistently emerged as important determinants of crop diversification and rural non-farm employment and incomes, namely land and infrastructure. Reform of land policies in conjunction with significant improvements in rural infrastructure are likely to have an important impact on rural household incomes. l Irrigated area is defined as any area that is irrigated through a major scheme, a minor scheme, a well, a lift or any combination of irrigation methods. The numbers represent the average share of land irrigated by the various sources. 31 Table 16: Probit Regresion Reslts -Participation in non-fats, activitiae Depndent vriaNbl-l lfhouseholdparticatet in nonaram activitiea Sample- rural housewholds Problt estimates Variablas Cad Stand. Ern I P>lWl Age ofHH head -0.02 0.01 -1.75 0.08 (Age ofHH head)2 000 0.00 1.58 0.11 Yean ofeducation ofthe HH head 0.04 001 4.96 0.00 * Amnsrmt ofcultivable land owned -0.52 0.08 -6.86 0.00 ' Own livestock -0.27 0.07 -3.72 0.00 Distance to th cose ain toad -0.02 0.01 -1 85 0.06 Distance to the cloass rniet 0.00 0.01 -0.68 0 49 Accem to clectriciy 0 33 0.05 6.25 0.00 Household izce 0.20 0.02 10.62 0.00 Shar of adult tnals 0.83 0.23 3 55 0.00 an Shar ofaduh fenales 033 0.24 1.35 018 Sham ofelderly -0.40 027 -1.52 0.13 She of children -0.50 0.20 -2 55 0.01 . Watern Province 0,34 0.15 2.31 0 02 Central Provinc -0.02 0.15 -0.12 0.90 Southema Province 40.02 0.14 -0.12 0.91 Northeaster Prvic -0.31 0.12 -2.54 0.01 . Noettwestetn Povince 0.00 0.15 001 0.99 Notrd Central Province *0.31 0.17 -1.85 0.06 Uva province -0.39 0.17 -230 0.02 razercep -0.32 0.31 -I 03 0.30 Number of oi - 5209.00 Wald chi2(20) - 503.62 Prob > chi2 - 0.00 Log likelihood - -2742.02 Pseudo R2 - 0.15 Maginal Effects dP/dx Std. Ert. z P>1z x-bar Age ofHH head -0.01 0.00 -1.75 0.08 49.41 (AgeofHHhead)'2 0.00 0.00 1.58 011 2631.97 Yas ofeducation ofthe RH head 0.01 0.00 4.96 0.00 7.94 Amount ofcultivable land owned -0.18 0.03 -6 86 0 00 0.18 Own livestock (0) -0.10 0.03 -3.72 0.00 0.10 Distance to the cset main toad -0.01 0.00 -l 85 0.06 0.87 Distance to the closet meriet 0.00 0.00 -0.68 0.49 3 84 Access to electricity (9) 0.11 0.02 6.25 0.00 0.59 Houschold size 0.07 001 10.62 0.00 4.44 Shut ofattdut mIles 0.28 0.08 3 55 0 00 0.31 Shae ofadult females 0.11 0.08 1.35 0.18 0.33 Share ofelderly -0.14 009 *1.52 0.13 010 Share ofchildren -0.17 0.07 -255 0.01 0,17 Western Province() 0.11 0.04 2.31 0.02 023 Centrl Province (C) -0.01 0.05 -012 0.90 0.10 Souhern Province() -0.01 0.05 -012 0.91 0.16 Northeastem Province ) -0.11 0.05 -2.54 0.01 0.14 Northtwetem Province(*) 000 005 0.01 0.99 0.15 North Centr Province() -0.11 0.06 -1.85 0.06 0.06 Uva province () -0.14 0.07 -2.30 0.02 0.05 () dF/dx is for discrete change of dumnmy variable from 0 to I **7I1dicates significance at the 900/o level or higher 32 Table 17: Prol Regression Reaults - Cropplq Dlwsificaion Depe,denr wniable- I ifhouseholdr tfld grwiazgo,w1an onme rmp Sample- sample agrficultrnl households Problrt adates Variables Co Sid Err. . P Amount ofcultivable and owned 021 0.07 2.91 0.00 °° Access to extension 0.36 0.13 2.84 0.00 Share ofinigated area -0.15 0.13 -1.19 0.23 Distance to nain road -0.02 0.01 -2.00 0.05 ° Years of eduaion of the HH head -0.02 0.01 -1.99 0.05 °° Household size 0 01 0.02 0.34 0.73 Household participated in non-fumn -0.02 0.10 -0.20 0.84 Westr Province -0.43 0.20 -2.14 003 an Ceatra Province 0.10 0.16 063 0.53 Southern Provice -0 15 0.20 -0.77 0.44 Norheastern Province -0.04 0.21 -0.20 0.84 Northwestern Provice 40.05 0.19 -0.24 0.81 Norah Cetral Province .0.60 0.19 -3.16 000 °a Uva province 0.26 0.25 1.03 0.30 Intercept -001 0 18 -0.07 0.95 Nuneber of obs - 1786.00 Wald chi2(14) 52.59 Prob > chi2 = 0.00 Log likelihood -1157.12 PseudoR2 - 0.05 Mrghwl Effects dF/dx Std Err. z P'z4 x-bar Asixunt ofcuhivable land owned 008 0.03 2.91 0.00 0357 Accea to ectenion 0.14 0.05 284 0.00 0.15 Share of irrigated rea -0.06 0.05 -1.19 0.23 0.50 Distance to nain road -0.01 0.00 -2.00 0.05 1.65 Years of educitmon of the HH head -0.01 0.00 -1.99 0.05 7.52 Household size 0.00 0.01 0.34 0.73 4,64 Houschold picipated in non-farm -0.01 0.04 -0.20 0 84 0.46 Wetern Provinc() -0.16 0.07 -2.14 0.03 0.08 Central Province (7) 0.04 0.06 0.63 0 53 0.09 Southrn Province () -0.06 0.07 -0.77 0.44 0.16 Northeasten Prvince() -0.02 008 -020 0.84 0.11 Northwestce Province (0) -0.02 0.07 -0.24 0.81 0.15 North Central Provinkce() -042 0.06 -3.16 0.00 0.19 Uva provinc () 0.10 0.10 1.03 0.30 0.11 (0) dF/dx is for discrete chanRe of dunnY variable flom 0 to I **lndicates significance at the 900/o level or higher 33 Statistical Tables 34 Table AM.l: Gross Domestic Product at current Prices, Rs Bilion Year Gross Domestic Product, Rs billion Total | Agriculture Industry Services, etc YR80 62.2 17.2 18.4 26.6 YR81 79.3 22.0 22.2 35.2 YR82 94.7 25.0 24.9 44.8 YR83 113.9 32.2 30.0 51.7 YR84 140.0 40.1 36.9 63.0 YR85 148.3 41.1 38.9 68.4 YR86 163.7 44.4 43.5 75.8 YR87 177.7 47.9 48.8 81.0 YR88 203.5 53.6 54.3 95.6 YR89 228.1 58.5 61.0 108.6 YR90 290.6 76.5 75.5 138.7 YR91 337.4 90.3 66.5 180.6 YR92 387.0 100.1 99.2 187.7 YR93 453.1 111.7 116.0 225.4 YR94 523.3 124.4 137.0 262.0 YR95 598.3 137.7 158.8 301.9 YR96 695.9 156.1 184.1 355.8 YR97 803.7 175.8 216.2 411.7 YR98 912.8 192.7 251.4 468.8 YR99 994.7 205.6 271.3 517.8 YROO 1117.5 218.4 307.0 592.1 YROI 1252.8 244.1 334.4 674.3 YR02 1387.4 267.7 374.1 781.7 Note: Agriculture includes forestry and fishing Source: Central Bank Annual Report, various issues Table AI.2: Gross Domestic Product at constant 1996 prices, Rs Billion Gross Domestic Ioduct, Rs biRion Year Total Agriculture Industry Services, etc YR80 339.1 109.8 79.3 153.1 YR81 358.6 117.4 81.3 164.0 YR82 376.8 120.5 83.4 177.0 YR83 395.5 126.5 84.9 188.8 YR84 436.1 126.0 90.9 202.0 YR85 454.8 136.9 94.1 209.8 YR86 461.4 140.5 99.8 218.6 YR87 473.8 132.3 106.1 224.5 YR88 484.5 135.1 110.6 229.3 YR89 515.5 133.5 114.3 236.7 YR90 539.2 144.9 122.9 247.8 YR91 562.9 147.6 127.9 263.7 YR92 562.9 145.3 137.1 280.7 YR93 601.8 152.4 150.1 299.3 YR94 635.5 157.4 162.2 315.9 YR95 670.4 162.6 174.6 333.3 YR96 695.9 156.1 184.0 355.8 . YR97 739.8 160.8 198.1 380.9 YR98 774.8 164.8 209.8 400.2 YR99 808.3 172.2 219.8 416.3 YR00 857.0 175.1 236.4 444.4 YROI 844.6 170.1 231.6 442.9 YR02 870.1 171.8 238.5 459.7 Note: Agriculture includes forestry and fishing Source: Central Bank Annual Report, various issues 35 Table A13: Average Annual Growth Rate of GDP at constant 1996 prices, 1981 to 2000 CategoTy 81-85 1 86-90 ] 91-95 1 96-00 1 91-00 Total GDP 5.00/ 3.0A 5.70/4 5.20/ 5.30/ Agriculture 3.60/ 0.7P 2.8°/ 3.00 1.99 Industry 3./e 5.00 8.20 6.20/ Manufacturing 5.8°/c 6.0°A 9.50/ 6.9%/ 8.00 Services, etc 6.50/4 3.1°A 60° 505% 590/ Note: Agriculture includes forestry and fishing Source: Computed from Central Bank data. Table A1.4: Qulnquennial Average Percent Share of GDP, 1981 to 2000 mAverage Quln uennlal Share Category 81-85 86-90 91-95 96-00 Total GDP 100.0% 100.0% j 100.0% 100.0%0 Agriculture 27.7% 26.5% 24.8% 21.1% Industry 26.6% 26.7%0 J 25.90/o 27.1% Manufacturing 14.90/o 15.3% 15.3% 16.5% Services, etc 45.6% 46.8% 49.3% 51.7% Note: Agriculture includes forestry and fishing Source: Computed from Central Bank data. Table A1.5: A riculture GDP, Rs million, current p_rices Total Agriculture, Agriculture Tea Rubber Coconut Paddy Other Forestry Fisheries Forestry and Fisheries YR80 17,151 YR81 21,977 _ _ _ YR82 24,964 20,771 2,418 770 3,263 5,484 8,836 1,710 2,483 YR83 32,180 27,110 3,869 983 3,654 6,852 11,752 1,907 3,163 YR84 40,138 35,051 6,401 1,092 3,990 8,359 15,209 2,199 2,888 YR85 41,069 35 599 5,269 1164 3,342 9,379 16,445 2,530 2 940 YR86 44,355 37,889 4,608 1,247 2,219 9,992 19,823 3,087 3,379 YR87 47,923 40,579 5,889 1,215 3,475 8,393 21,607 3,642 3,702 YR88 53,600 45,557 6,478 1,619 5,021 9,420 23,019 4,006 4,037 YR89 58,462 48,797 6,697 1,446 4,917 9,495 26,242 4,578 5,087 YR90 76,488 65,141 8,939 1,467 4,852 15,088 34,795 5,547 5,800 YR91 90,257 75,108 7,553 1,254 6,667 17,080 42,554 7,267 7,882 YR92 100,080 81,137 4,925 1,743 9,320 19,659 45,490 8,357 10,586 YR93 111,659 90,369 6,811 2,177 9,711 21,586 50,084 9,360 11,930 YR94 124,370 98,519 6,879 3,185 9,167 21,241 58,047 11,475 14,376 YR95 137,678 106,753 7,230 4,007 9,323 21,645 64,548 14,321 16,604 YR96 156,108 122,594 10,332 4,011 12,838 19,892 75,521 14,751 18,763 YR97 175,774 138,999 12,685 3,132 14,960 24,469 83,853 15,362 21,413 YR98 192,665 153,335 14,448 2,462 15,573 26,842 94,010 15,669 23,661 YR99 205,600 163,481 12,295 2,253 17,675 30,197 101,061 16,280 25,838 YR00 218,407 171,878 15,551 2,506 13,249 26,545 114,027 17,144 29,386 Source: Central Bank Annual Report, various issues Table A1.6: Period Average Percent share In Ag icultural GDP Item 82-85 J 86-90 91-5 | 96-00 Tea 15% 14% 8% 90V0 Rubber 3% | 3% 3% 2% Coconut 12% 90/0 10% I 10% | Paddy 25% 22% 23% | 70/O Other 44%0/ 53% 57% 1 62% Source: Computed from Central Bank data. 36 Table Al.7: A culture GDP, Rs million, constant 1996 prices Year All Agriculture Tea Rubber Coconut Paddy I Other Forestry Fisheries YR82 93,470 10,881 3,465 14,684 24,678 39,762 7,695 11,174 YR83 106,458 15,193 3,860 14,349 26,907 46,149 7,489 12,421 YR84 117,583 21,473 3,663 13,385 28,041 51,020 7,377 9,688 YR85 117,262 17,356 3,834 11,008 30,894 54,169 8,334 9,684 YR86 118,998 14,472 3,916 6,969 31,382 62,258 9,695 10,612 YR87 119,101 17,284 3,566 110199 24,634 63,418 10,689 10,866 YR88 119,922 17,052 4,262 13,217 24,797 60,594 10,545 10,627 YR89 117,166 16,080 3,472 11,806 22,798 63,009 10,992 12,214 YR90 130,429 17,898 2,937 9,715 30,210 69,669 11,107 11,613 YR91 141,566 14,236 2,364 12,566 32,193 80,207 13,697 14,856 YR92 136,050 8,258 2,923 15,628 32,964 76,278 14,013 17,751 YR93 127,638 9,620 3,075 13,716 30,488 70,739 13,220 16,850 YR94 126,690 8,846 4,096 11,788 27,315 74,645 14,756 18,487 YR95 120,065 8,132 4,507 10,486 24,344 72,597 16,107 18,674 YR96 122,588 10,331 4,011 12,837 19,891 75,517 14,750 18,762 YR97 127,948 11,676 2,883 13,771 22,524 77,186 14,141 19,711 YR98 130,148 12,263 2,090 13,218 22,783 79,794 13,300 20,083 YR99 132,842 9,991 1,831 14,362 24,538 82,120 13,229 20,996 YROO 131,649 11,911 1,919 10,148 20,332 87,338 13,131 22,508 Source: Central Bank Annual Report, various issues Table ALS: Agriculture, Livestock and Forestry GDP, Period average annual growtb rate, constant 1996 prices, 1982-2000. Sector 82-90 91-00 91-95 96-00 Agriculture 2.8% -0.4% -3.9% 1.8% Tea 2.9% 1.2% -10.0%/0 1.3% Rubber -1.2% -4.9% 17.7% -17.5% Coconut -3.8% -1.2% -6.2% -4.2% Paddy -0.3% -5.00%a -7.2% 1.3% Other 6.3% 1.2% -2.2% 3.6% " try 6.2% -0.6% 3.8% -2%.9 Fisheries 0.7% 3.7% 5.1% 4.40%o Source: Computed from Central Bank data. Figure Al.1 Percentage Contribution of Agricultural Sector In GDP (1998) and Percentage of Labor Employed In Agriculture (1997) In South Asian Countries. 100 91 94 80 80- ~~ ~ ~~ ~ ~~60 60 59 60- 60- ~~~~46 46 Xi 1 | 40- 20 16 1 22X l | i 20 0 Q% Labor Employed in Agric, 1997 O3Ag%Share in GDP, 1998 Source: Human Development Report in South Asia, 2001. 37 FigureAl. 2: Distribution of Agricultural Households by Rural Expenditure Quindles 30 25 23 51 22.20 20.18 20 - 17 I- 159 a. 10 5 0. Pborest Secornd Third Fourth Ficheast Source: SLIS 1999-2000. 38 Table A2.1: Average expenditure per household psr month on selected food Items by survey period (All Island) 1995/96 1990/91 1985186 1980/81 Rtem Unit Qty Value Rs. Qty Value Rs. Qty Value Rs. Qty Value Rs. Total food & dfnk - 3552 - 2376 - 1208 - 801 Rice kg. 38 752 44.3 610 45.2 306 46.7 252 Wheat flour kg. 3 39 2.6 35 4 31 3.6 19 Bread kg. 12.5 158 9.9 107 9.3 64 7.8 37 Flour preparations - 78 - 33 - 12 - 9 Condiments kg. - 353 5.6 252 6.3 119 5.7 64 Pulses kg. - 130 2.6 115 1.7 44 1.4 19 Vegetables - 296 - 235 - 120 - 73 Coconuts no. 32.6 244 39.3 130 38.3 71 37 66 Meat kg. - 156 1.2 80 1.1 31 0.8 14 Fish kg. - 233 2.4 137 3.4 71 3.5 40 Dried fish kg. - 162 1.3 101 1.4 48 1.4 28 Milk liters 0.7 12 1.4 11 2.4 11 2.7 7 Milk products - 242 - 111 - 41 - 20 Eggs no. 12 39 10.9 26 6.9 11 6.7 6 Fruits - 62 - 32 - 15 - 10 Sugar kg. 5.6 184 5.8 155 6 76 3.8 62 Otherfood & drink 412 - 201 - 139 - 71 Source: Dept. of Census & Statistics, 2000, Household Income and Expenditure Survey 1995/96, Final Report, Colombo: Dept. of Census & Statistics. 39 Table A2.2: Expenditure on different food Items as a percentage of total household expenditure on food and drink by survey period. (All Island) 1995196 1990191 1985/86 1980181 Item % % % % Average household size 4.5 4.9 5.1 4.9 Total food and drink 100.0 100.0 100.0 100.0 Rice 21.2 22.4 25.3 31.5 Wheat flour 1.1 1.4 2.6 2.4 Bread 4.4 4.2 5.3 4.7 Flour preparations 2.2 1.3 1.0 0.9 Condiments 9.9 9.1 10.4 8.0 Pulses 3.7 4.4 3.6 2.4 Vegetables 8.3 8.8 9.9 7.5 Coconuts 6.9 8.6 5.9 8.2 Meat 4.4 3.1 2.5 1.8 Fish 6.6 5.1 5.8 4.9 Dried fish 4.6 4.0 4.0 3.2 Milk 0.3 0.5 0.9 0.9 Milk products 6.8 4.2 3.4 2.4 Eggs 1.1 1.1 0.9 0.8 Fruits 1.7 1.4 1.2 1.2 Sugar 5.2 6.2 6.3 7.8 Otherfood&drlnk 11.6 14.1 11.0 11.4 Source: Dept. of Census & Statistics, 2000, Household Income and Expenditure Survey 1995/96, Final Report, Colombo: Dept. of Census & Statistics. 40 Table A2.3: Average monthly household consumption quantities of selected food Items by household expenditure decile. Food Item Unit Total Household expenditure decile 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th Rioe grams 38021 19089 29476 35113 37899 41355 42176 43372 44349 44214 43213 Wheatflour grams 2959 1199 2413 3073 3504 3967 4105 3988 3214 2770 1362 Bread grams 12459 5186 7038 8579 9876 11474 12693 14174 16266 18219 21115 Chili grams 696 378 518 599 653 713 743 760 822 858 916 Onion grams 2233 930 1322 1531 1753 2009 2230 2467 2049 3205 4043 Dhal grams 2146 990 1439 1721 1939 2131 2285 2440 2596 2823 3102 Brnjal grams 1825 1083 1592 1766 1837 1930 1886 1986 1954 2063 2158 Bandakka grams 1132 610 837 933 1059 1132 1203 1277 1300 1416 1555 Beans grams 1950 799 1274 1452 1622 1857 2011 2119 2448 2740 3185 Coconut number 32.6 17.7 24.9 28.7 29.9 32.8 34.5 36.1 39.7 39.8 42.2 Beef grams 548 61 131 223 312 383 491 668 909 1109 1195 Chicken grams 869 8 52 91 265 330 502 749 1149 1990 3556 Balaya/Kelavalla grams 572 48 89 118 197 308 424 642 918 1194 1788 Hurulla/Salaya grams 1150 309 544 871 907 1150 1305 1540 1712 1731 1437 Balaya (dried fish) grams 253 112 198 234 235 285 301 324 311 303 228 Sprats (drled fish) grams 600 327 471 542 568 622 654 717 737 699 660 Cow milk ml 672 104 258 456 453 632 591 771 1067 1026 1363 Milk powder grams 1167 175 403 549 739 844 1074 1357 1584 2167 2778 Coconutoil ml 1385 616 905 1099 1240 1458 1514 1560 1719 1870 1876 Eggs number 12.1 2.3 4.9 7.0 8.2 9.5 11.6 13.4 16.6 21.0 26.2 Banana number 16.5 2.4 3.4 5.0 8.1 9.8 12.0 15.3 23.0 32.0 54.6 Tea/Dust1Leaves grams 568 324 422 485 525 575 590 617 652 705 783 Sugar grams 5648 2389 3631 4309 4750 5435 5976 6287 7168 7756 8794 Source: Dept of Census & Statistics, 2000, Household Income and Expenditure Survey 1995/96, Final Report, Colombo: Dept of Census & Statistics. 41 TableA3.1: Area, Production and Yield of Paddy, Tea, Rubber and Coconut, 1979-2000. _ _ ddy Tea Rubber Coconut ear rea Yeid rea ield rea Yleld ea Prodn Yleld 00 ha In °°° mt Kgtha ha In 000 mt a 00ha n 000 mt Kgtha ha Illon nuts Cgha 79 38.6 1917 2286 44.1 06.4 46 26.5 152.7 674 51.4 2393 5301 80 44.6 2133 2525 44.7 91.3 82 22.3 133.1 599 51.4 2026 4488 1 77.7 2229 2540 44.9 10.1 58 05.6 123.9 603 51.4 2258 5002 82 344.1 2156 2554 42.1 87.8 76 205.6 125.2 609 16.4 2521 6054 83 324.1 2483 3013 30.1 179.2 79 05.6 139.9 680 16.4 2312 5552 84_ -990.2 2414 2438 27.8 08.1 14 205.5 141.9 691 16.4 1942 4664 85 80.6 2661 3022 31.6 14.1 24 05.5 137.4 669 16.4 2958 7104 36 395.3 2588 2891 22.9 11.2 48 05.2 37.8 672 16.4 3039 7298 87 __ 81.2 2128 2724 21.4 13.3 63 205.1 121.8 594 16.4 2292 5504 8 367.8 2477 2854 21.6 26.9 024 05.0 122.3 597 16.4 1933 4642 9 26.9 2063 2838 22.1 06.9 32 _ 99.6 110.9 556 16.4 2484 15965 90 _ 356.7 2538 2963 21.7 33.1 51 199.1 113.1 568 16.4 2532 6081 1 316.6 2389 2926 21.6 40.7 86 98.1 103.8 524 16.4 2184 5245 92 _ 303.5 2340 2912 21.8 78.8 106-i94.5 106.1 546 16.4 2296 5514 93 3__34.2 2570 3081 92.8 31.8 102 _ 62.2 104.2 642 3.9 2164 4875 94 __ 29.6 2684 2887 88.9 42.2 82 160.9 105.3 654 3.9 2622 5907 5 15.1 2810 3071 88.9 45.9 02 161.6 106.7 660 3.9 2755 6206 96 748.7 2062 2754 187.5 58.4 78 162.0 112.4 694 3.9 2546 5736 97 729.8 2239 3068 190.4 76.8 454 158.2 105.7 668 3.9 2631 5927 98 848.2 2692 3174 190.4 80.1 471 58.1 95.7 605 3.9 2665 6004 9 96.0 2868 3201 180.0 84.0 578 5 59.0 97.0 610 39.0 2828 6442 0 78.0 2868 3267 180.0 06.0 700 1 58.0 87.0 551 39.0 3055 6959 Source: Department of Census and Statistics. Table A3.2: Paddy Area-Irrigated and Ralnfed, 1980-81 to 1999-2000 ___________ Area, 000 ha Percentshare | rriged Rainfed Total Irrigated Rainfed 1980 -1981 548 329 877 63% 37% 1981 - 1982 519 325 844 62% 38% 1982 - 1983 538 286 824 65% 35% 1983 -1984 658 332 990 66% 34% 1984 -1985 583 298 881 66% 34% 198S- 1986 607 288 895 68% 32% 1986 -1987 524 257 781 67% 33% 1987-1988 592 276 868 68% 32% 1988 -1989 493 234 727 68% 32% 1989-1990 584 272 857 68%0 - 32% 990- 1991 496 217 713 700% 30% 991 -1992 558 245 803 69% 31% 1 i992- 1993 585 249 834 70% 300/o 993-1994 683 247 930 73% 27% 994- 1995 673 242 915 74% 26% 1995 -1996 536 213 749 72% 28% 1996 -997 513 216 730 700 30% 997- 1998 651 197 848 77% 23% 1998- 1999 662 230 892 74% 26% 1999 - 2000 665 213 878 76% 24% Source: Department of Census and Statistics. 42 Table A33: Yidd of Paddy By Districts, 1985 - 2000, mt/ba District 86-90 91-95 95 96 97 98 99 2000 Colombo 2.5 2.4 2.4 2.4 2.6 2.8 2.4 2.8 Gampaba 2.5 2.4 2.6 2.7 2.8 2.5 2.7 2.7 Kalutara 2.2 2.3 2.3 2.1 2.4 2.6 2.4 2.6 Gaile 1.9 1.8 1.7 1.9 2.1 2.3 2.2 2.1 Matara 2.3 2.2 2.3 2.2 2.4 2.6 2.8 2.8 Ratnapura 2.5 2.4 2.6 2.5 2.7 2.3 2.5 2.7 Kegaile 2.9 3.0 2.9 3.0 3.1 2.8 3.1 2.6 Kurunegala 2.7 3.1 3.0 1.5 2.8 3.2 3.4 2.7 Puttalam 2.0 2.3 2.4 2.7 2.5 3.0 3.6 3.4 Kandy 2.6 2.3 2.4 2.6 2.6 2.4 2.3 2.8 Matale 3.1 3.3 3.2 3.2 2.8 2.5 2.5 2.9 Nuwara Ellya 2.0 2.1 2.0 2.3 2.1 5.3 4.7 6.3 Badulia 3.3 3.1 3.0 2.7 2.9 2.4 3.0 3.1 Moneragala 3.1 3.1 3.1 3.1 2.4 5.1 6.0 6.6 Anuradhapura 2.7 2.9 3.0 2.4 3.0 3.4 3.3 3.4 Polonnaruwa 3.8 3.8 4.0 3.9 4.1 3.7 3.9 4.2 Trincomalee 2.7 1.6 2.4 2.3 2.2 2.9 3.0 3.4 Battlcoloa 2.3 2.4 2.2 2.0 1.3 2.5 2.5 2.6 Ampara 3.3 3.4 3.6 3.9 4.0 4.0 3.6 4.2 Hambantota 3.7 3.6 3.4 3.5 3.6 3.6 3.4 3.6 Udawalawe 4.3 4.4 4.7 4.4 3.1 4.7 4.8 4.7 Mabaweli 'H' 4.1 4.3 4.4 4.1 3.0 4.1 4.4 4.4 Sri Lanka 2.9 3.0 3.1 2.8 3.0 3.3 3.3 3.4 Source: Department of Census and Statistics Table A3A: Paddy: Extent sown by variety of seed, 1992 - 1999 maba and yala Variety and season 1992 1993 1994 1995 1996 1997 1998 1999 M aha__ _ _ _ _ __ _ _ _ __ _ _ _ __ _ _ _ _ New iniproved .. 449,516 472,153 501,398 452,096 418,447 528,07 511,373 Old improved .. 7,160 18,541 14,249 6,156 5,029 3,580 12,651 Traditional .. 41,801 47,700 17,543 6,586 7,273 2,430 5,68 Total .. 498,477 538,394 533,190 464,838 430,749 534,088 529,710 Yala__ _ _ _ _ ___ _ New improved 226,735 251,383 309,315 322,233 237,953 243,661 256,07' 339,408 Old imrr.ved 2,01 3,122 4,276 3,237 2,327 2,436 2,039 3,421 Traditional 20,573 22,883 19,783 4,836 3,066 1,409 888 279 Total 249,327 277,388 333,374 330,306 243,346 247,506 259,002 343,108 Source: Department of Census and Statistics 43 Table A3.5: Livestock popul ation In Sri Lanka, 1970- 2 (000 anlmals) Year Cattle Buffaloes Goats Sheep Pis Chicken Ducks 1970 1596 736 558 27 108 6856 30 1971 1625 737 546 29 85 6693 22 1972 1617 748 562 29 102 9127 24 1973 1677 714 549 27 91 7529 25 1974 1686 736 547 30 49 6521 33 1975 1712 818 547 28 33 5684 15 1976 1744 854 562 30 36 5700 15 1977 1692 797 545 27 36 5833 13 1978 1541 814 450 23 41 4912 16 1979 1623 844 461 24 49 5882 22 1980 1644 843 493 28 71 6341 25 1981 1720 898 512 30 94 6296 23 1982 1699 879 512 28 75 6249 24 1983 1700 910 519 29 77 6457 25 1984 1738 951 535 29 85 6113 28 1985 1782 967 539 27 84 7097 28 1986 1783 964 534 29 86 7638 30 1987 1807 1007 502 27 96 8588 30 1988 1788 963 510 28 94 8645 29 1989 1820 967 518 30 94 8833 31 1990 1433 823 415 22 81 8250 18 1991 1477 825 460 20 84 8261 17 1992 1604 897 528 22 91 8852 18 1993 1688 793 582 19 90 9261 18 1994 1702 791 588 20 94 9466 16 1995 1704 764 591 19 87 9573 16 1996 1664 761 535 11 85 9137 12 1997 1579 726 521 11 80 9253 11 1998 1599 721 519 12 76 9566 12 1999 1617 728 514 12 74 9923 10 2000 1557 694 495 1 71 10622 10 Source: Departrent of Census & Statistics 44 Table A3.6: Livestock Production of Sri L kau 1970 - 2000 Liquid Ilk ('000 Litres Eggs Beef Mutton Pork Year Cow Milk Buffaloe Total (Million) (Ton) (Ton) (Ton) 1970 10437 2871 13309 431 16383 1302 671 1971 10894 3248 14142 477 17595 1224 805 1972 10183 3484 13667 582 16733 1135 744 1973 11267 2804 14072 466 17260 1224 611 1974 11357 3397 14754 406 16899 1371 561 1975 13647 4020 17667 372 16764 1410 467 1976 16242 4405 20647 365 15196 1330 480 1977 17683 4251 21934 379 13262 1265 692 1978 17485 4568 22053 360 12878 1265 668 1979 16346 5133 21479 432 11916 1233 835 1980 18013 5364 23378 544 12122 1365 1143 1981 19360 6107 25468 466 12442 1368 885 1982 19241 5796 25037 521 12420 1629 775 1983 19303 6909 26212 567 13044 1340 622 1984 19630 7347 26978 561 13563 1506 694 1985 20336 7494 27830 666 13428 1436 620 1986 10558 4121 14679 667 13194 1214 568 1987 16277 6601 22878 814 12519 1109 719 1988 13512 5291 18804 778 11069 1044 749 1989 14404 5445 19850 834 10272 960 697 .1990 15843 4901 20744 784 10352 827 824 1991 17401 5907 23309 780 11627 792 1101 1992 19388 7107 26496 812 12951 1016 1186 1993 20380 6759 27140 714 12200 1091 804 1994 20874 6816 27691 719 13095 1289 991 1995 21120 6654 27775 718 14225 1148 1158 1996 20788 6828 27616 713 12194 980 1118 1997 20994 6592 27586 712 12682 951 1068 1998 21361 7087 28448 730 12454 804 950 1999 21695 6822 28568 748 11806 826 818 2000 21921 6876 26798 769 11818 830 820 Source: Department of Census & Statistics. 45 Table A3.7: Paddy-Gross asweddumised extent by Irrigation scheme (1973/74 - 1997/98) Hectares Cultivatdon Year Major Scheme Minor Scheme Rainfed Total 1973/74 196,416 168,675 241,326, 606,417 1974n5 202,967 173,236 244,411 620,614 197sn6 204,800 177,524 247,512 629,836 1976/77 208,371 180 974 253,516 642,861 1977n8 216.953 185,435 255,418 657,806 1978n9 228,378 171,265 253,525 653,168 1979/80 238,531 167,352 253,081 658,964 1980/81 245,549 171,066 253,078 669,693 1981/82 259,177 172,295 255,273 686,745 1982/83 265,836 175,045 257,730 698,611 1983/84 268,784 176,235 257,343 702,362 1984/85 276,376 175,414 254,092 705,882 1985/86 288,032 176,423 253,730 717,185 1986/87 292,255 180,997 251,351 724,603 1987/88 297,762 181,534 248,115 727,411 1988/89 302,472 180,638 247,512 730,622 1989/90 - 307,160 179,235 243,558 . 729,953 1990/91 310,479 179,190 242,940 732,609 1991/92 317,212 178,286 241,506 737,004 1992/93 317,955 177,757 232,509 728,221 1993/94 321,332 174,747 235,887 731,966 1994/95 322,629 174,779 237,047 734,455 1995/96 323,318 175,215 237,849 736,382 1996/97 323,799 176,491 237,021 737,311 1997/98 327,748 175,440 228,348 731,536 Note: Fluctuation in the aswedduTiized extent could be attributed to number of reasons. i.e.: (i) not accounted the land that have not been cultivated for consecutive five years; (ii) land diverted to other purposes; (iii) land affected by sea water intrusion; and (iv) inclusion of new land coming under paddy cultivation. Source: Department of Census and Statistics. Table A3.8: Agricultural Commodities currently subject to Licensing Requirements Other live animal for humnan consumption Meat of Bovine Paddy or rough rice Meat of sheep or goat Guts/Bladders/stomach Soups/Composite food Acid treated bores/lvory/ tortoise Chemical for fertilizer manufacture Sausages and similar products Animal fertilizer Preserved Meat Vegetable fertilizer Tractors Maize seed Blast freezers for preserving poultry meat Cane Molasses Milk chilling tanks Source : Sri Lanka Customs Tariff Guide, 1999 and Central Bank Annual Report 2000 Prior to 1995, a special cess was levied on imports which were at or above a 45 per cent duty rate. 46 Table A3.9: YALA 1999 - GRAIN YIELDS OF CORN VARIETIES, Mt/Ha (Average plant population: 54,000/ha) Varieties Dambuia Gannoruwa C.I.C. Farm FCRDI Farmer - I.S.T.1 Talawa Maha IIUD. Hvbrids Pacific 1I 5.46 10.84 9.1 3.7 Pacific 626 6.41 11.72 9.7 2.3 Pioneer 3011 6.02 11.11 4.8 4 5 Pioneer 30A10 6.77 10.89 7.3 3.9 Pioneer 3012 6.31 11.93 R4 4-5 Pioneer 3013 7.09 11.27 9.2 6.0 NovartisV-49 5.56 10.15 7.6 4.3 Novartis R-45 6.84 10.17 7.6 3.7 Novartis G 5431 4.36 9.40 8.4 4.3 Novartis G 5384 6.17 9.45 7.1 3.4 Novartis CV 93 6.90 8.91 7.4 3.6 NCSRS 3601 6.34 10.34 5,9 3.0 NCSRC 3851 8.34 11.77 9.1 3.4 Cartill 717 6.50 10.94 8.7 4.6 Cargill 727 7.42 10.06 5.6 4.8 O.P.Varletles Ruwan 5.60 9.27 7.8 3.5 Suwan 5 5.98 8.80 2.2* 3.9 Total Yield 108.04 177.02 126.0 67.4 Mean Yield 6.36 10.41 7.41 3.96 NPK (kg/ha) 130:52:35 178:54:52 130:52:35 100:45:30 Observatdons Irrigable rice Irrigable Upland. Irrigable rice land. Irrig. Upland. land. Intervals Mid-country wet Intervals of irrigation Poor soils. of Irrigation 10- zone. Crop well- 10-12 days. Dry Stress due to 12 days. (Dry nmanaged. zone. water shortage & Zone) Higher fertilizer low fertilizer. levels used. *Pest danuge Source:S.H. Charles, 2002, "Ag Ent Supports Corn (Maize) Production in Sri Lanka," niinieo. 47 TABLE A3.10: MAHA 1999- Grain Yields of Corn Varieties, Mt/Ha (Average plant population: 54,000/ha) Farm Ambanpola FCRD1 Bible Machin- Dambulla Farmer Maha School Varieties ery Trn. Farmer IUup. Farm Center Hybrids Pacific II 8.10 6.07 5.52 3.15 6.32 Pacific 626 8.15 7.16 6.54 3.34 9.21 Pioneer3011 8.15 5.01 6.96 2.71 8.42 Pioneer 30A10 8.52 8.59 6.98 3.66 8.52 Pioneer 3012 8.10 9.68 6.59 3.27 8.47 Pioneer 3013 8.15 6.07 7.56 3.62 7.69 NovartisV-49 8.05 7.53 6.79 3.29 7.73 Novartis RI-45 7.40 7.16 6.27 3.91 7.61 Novartis G 5431 7.41 6.44 5.45 3.54 5.77 Novartis G 5384 8.15 6.07 3.72 3.15 5.96 Novartis CV 93 7.75 8.59 6.08 3.20 6.43 NCSRS 3601 7.41 7.87 3.92 3.97 7.03 NCSRC 3851 7.78 7.16 5.84 3.93 7.59 Cargill 717 8.15 7.53 6.77 3.93 8.76 Cargill 727 8.10 6.44 6.14 4.18 6.56 O.P.Varleties Ruwan 5.18 6.01 4.12 2.41 3.20 Suwan 5 4.81 6.07 3.11 2.72 5.28 Mean Yield 7.61 7.02 5.78 3.41 7.09 NPK (kg/ha) 147:60: 147:60: 147:60: 120:45: 147:60: 48 48 48 30 48 Observatdons Rainfed, Rainfed rice land Rainfed Upland Depleted Rainfed upland. Upland (irrigated at Dry zone soil. Stress Dry Zone. Dry zone critical times) due to water Dry Zone shortage Source:S.H. Charles, 2002, "Ag Ent Supports Corn (Maize) Production in Sri Lanka," mimeo. 48 Table A3.11: Factors which constrain crop diversification by farm size. Land Owned Categery landless Marginal [ Small Medium large | Average % Agricultural Households that could increase l incomes by cultivating a second crop 52.0 58.2 74.1 73.0 64.7 66.2 Factors discouraging diversification Percent ofAgricultural Households Reporting Financial constraints/credit 54.1 56.5 63.9 67.1 53.9 61.1 Lack of water 59.3 43.2 56.3 61.1 57.3 55.4 Quality of land 35.0 30.2 27.9 26.6 21.8 28.9 Lack of technical assistance 37.3 36.7 54.2 51.3 35.3 45.7 Lack of appropriate inputs 38.8 42.8 53.0 45.5 28.9 44.9 War disnuption 9.0 4.0 5.4 17.6 11.2 9.6 Lack of market 19.8 19.9 32.9 35.3 31.0 28.5 Poor road access 15.8 22.1 25.1 24.1 22.9 22.5 Note: Marginal fanns are farms where the household owns less than I acre of land (0.4 ha); Small farms are farms where the household owns between I and 2 acres (0.4ha-0.8 ha); medium farms are farrs where the household owns between 2-4 acres (0.8ha- 1.6ha); and large farms are farms where the household owns greater than 4 acres of land (greater than 1.6 hectares). Source: SLIS 1999/2000. Table A3.12: Production Subsidies Granted for Other Export Crops (Rs. Million) Subsidy Type 194 19951 199 1997 1998 1999 Other Export Crops 15 18 22 27 32 53 Subsidy as a percentage of total 0.007 0.007 0.008 0.009 0.009 0.016 government expenditure Source: Annual Report, Central Bank of Sri Lanka, Various Issues, cited in Weliwita and Epaarachchi 2002. Table A3.13: Irrigation Subsidies Through Agro Wells Program (Rs. Million) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Subsidy Released to 3 18.9 38.0 43.6 17.2 9.05 20.7 26.5 42.5 31.4 25.4 Farmersl Subsidy released to farmers by the ADA as 0.00 0.01 0.02 0.02 0.008 0.004 0.008 0.01 0.012 0.00 0.00 a % of the Govt. 3 3 4 5 9 6 Expenditure Source: Ministry of Agriculture,cited in Weliwita and Epaarachchi 2002. Table A3.14: Current Duty Exemptions applicable to the Agriculture Sector Ayurveda and prepared drugs, medicinal plants. Ornamental fish inported for re export or under such condition. Fish caught by fishing vessels which are operating from a Sri Lankan port and which have been duly registered in Sri Lanka or issued with landing permits by the Ministry of Fisheries. Ingredient for the manufacture of animal and poultry food. Technical grade, separate chemical defined used in formulation of pesticide and plant growth regulators for the agriculture industry. Parts, Components and accessories for the manufacture, assembly of machines for clearing, sorting or grading seed, grain or dried leguminous vegetables, machinery used in the milling industry or for working of cereals or dried grain or leguminous vegetables Raw material comnponents, parts and accessories for the manufacture of fishing boats. Green houses, poly tunnels, sprinkiers, drip irrigation systems and netting for agriculture and related activities. Multi layered packing material/ packs consisting of laminating of papers, polythene film and aluminnum foil used for packaging of milk, vegetable and fiuit juice. Source: Sri Lanka Customs Tariff Guide, 1999. 49 Table A3.15: Summary Statistics - Total Downstream Mahaweli Systems . ___________________________ (Systems B (LB), C, G, H, L & UW) Year Description Unit 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Settlement Farmer families No. 73,230 74,909 76,115 75,484 79,857 82,180 85,986 86,173 85,853 86,387 86,453 84,449 86,453 Non-farmer families No. 6,053 6,273 8,843 17,183 20,670 21,270 24,455 24,939 27,599 29,420 29,355 30,150 29,35 Sub-families No. 3,518 4,273 4,571 4,815 5,319 5,282 5,014 5,064 5,064 5,064 Cashew farmers No. 309 437 383 366 366 366 522 522 522 TOTAL 79,283 81,182 84,958 96,185 105,109 108,458 115,639 116,797 119,100 121,187 121,394 120,185 121,394 Po ulation Estimated Population No. 278,393 396,895 406,169 451,549 475,106 499,350 538,241 561,491 572,160 596,442 607,774 611,119 666,346 :Aaculture/Livestock Paddy Extent Cultivated Ha. 91,148 97,818 92,062 112,852 119,189 102,118 122,084 136,318 137,824 120,204 120,620 126,372 139,917 Paddy Production Mt. 390,923 370,594 370,709 470,179 486,711 405,727 545,727 527,430 588,291 509,561 568,029 593,111 661,294 Paddy Average Yield Mt/Ha 4.81 4.24 4.62 3.44 4.56 4.41 4.58 4.33 4.27 4.24 4.87 5.00 4.73 Other Field Crops Extent Ha. 15,433 17,919 6,685 24,380 25,396 15,350 23,628 30,165 30,302 30,188 25,809 16,866 22,584 Other Field Crops Production Mt 22,618 26,020 15,114 49,504 55,752 36,798 57,935 97,771 78,537 163,843 206,071 35,592 156,420 OFC Value as a % of Total value of Food Production 25 37 40 41 38 26 37 31 28 26 52 34 3 Real OFC Income per Household cJ Rs. 7,132 7,029 5,470 8,331 7,650 4,392 5,806 8,944 6,543 11,572 13,261 7,660 8,941 Household OFC real Income as a % of real Household Inoome 51 65 29 44 33 22 31 26 23 23 35 28 29 Milk Producton Lt. NA NA 691,638 815,433 1,168,852 1,546,452 1,609,200 1,220,742 1,303,476 1,716,015 1,745,523 1,603,160 2,594,888 Egg Production No. NA NA 0 309,107 907,278 1,250,712 1,113,090 1,402,700 1,173,505 1,501,649 1,075,316 795,293 577,663 Broilers No Birds NA NA 0 29,076 57,631 84,567 76,688 69,686 32,986 57,406 94,449 91,897 76,910 Value of Agricultural Production Rs. Mn. 3,213 3,624 1,595 5,092 5,047 3,915 5,644 5,709 6,072 6,549 11,032 9,451 12,941 Capital Investment in Mahaweli a/ Rs. Mn. 3,744 3,174 2,199 1,961 2,456 2,389 2,585 2,230 2,146 1,123 998 1,229 1,310 Investment-Value of Agri. Ratio 0.86 1.14 0.73 2.60 2.05 1.64 2.18 2.56 2.83 5.83 11.00 8.00 9.88 50 Descriptlon Unit 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Income (Per Annum) b/ Gross Per Capita Income Rs. 6,027 5,437 4,949 10,699 12,328 9,584 12,584 12,201 12,736 13,176 20,142 18,701 21,927 Gross Income Per Household Rs. 21,165 26,582 23,659 50,226 55,723 44,128 58,570 58,657 61,184 64,850 100,845 95,090 120,359 Real Per Capita Income cl Rs. 6,027 4,770 3,891 6,925 7,112 4,964 5,833 5,215 5,055 4,511 6,294 5,341 5,701 Real Household Income c/ Rs. 21,165 23,321 18,603 32,508 32,149 22,855 27,148 25,070 24,286 22,203 31,512 27,160 31,293 Note: ' Upward shift in value of producfionfincomes due to an increase in paddy & Banana Production a/ Includes Upper Mahawell & other cost. b/ Indudes Agricultural (Paddy & OFC) & Non-farm Incomes only. c/ The colombo Consumers! Price Index (CCPI), which is the Offcial Price Index used for monhtoring inflaton In the country was taken In the Real Value Calculation. The base year was taken as 1987. Source: Project Management Unit, Mahaweli Authority of Sri Lanka 51 Table A3.16: Estimate Average Annual Per Capita Income from all Sources b System System 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 B - Left Bank 3,753 3,993 6,001 9,648 11,02 10,819 10,636 9,9 11,410 13,406 15,394 16,598 19,598 C 4,388 4,902 4,9 10,006 12,569 10,887 12,601 13,023 15,071 18,623 21,816 21,347 24,744 G 6,573 4,061 2,782 8,96 10,45 4, 8,92 9,78 10,49 10,838 14,144 13,14 20,103 H 12,927 8,051 5,391 15,169 15,643 12,091 20,074 18,399 17,516 14,128 17,922 17,679 23,371 UDA WALAWE 4,723 4,711 5,571 11,028 13,695 6,40, 7,430 8,178 8,414 13,655 27,929 21,943 22,370 L . 969 1,522 6,063 3,423 2,748 2,338 1.294 3,03 2,91 1,654 System Average _ Gross per capita Income 6,027 5,437 4,99 10,699 12,32 9,5 _ 15,5 12,201 12,73 13,176 20,1 18,701 21,92 Real per Capita Income #6,027 4,7701 3,8911 6,92~ 7,1111 4,94 5,33 52 5,05 4,5111 6, 531 58 Notes: (01) - Income indudes Agricultural (Paddy & OFC) & Non-farm Incomes only. # The Colombo Consumer Price Index (CCPI), used In the Real Value calculation. * Reflects Increases in Guaranteed price of paddy and Other Field Crops as well as an Increase in total output (02) National - (1998) Per Capita GDP at Market Price = Rs. 58,323 Per Capita GNP at Market Price = Rs. 57,257 Source: Mahawell Authority of Sri Lanka. 'Mahaweli Statistcal Handbook - 1999. Planning & Monitoring Unit 52 Table A3.17: Major Changes to Import Tariffs In the Agricultural Seetor, 1995 - 1998 Commodity 1995 1996 1997 1998 1999 2000 Milk powder 10 % Duty Waiver 10 % Duty 10 %Duty Waiver Reclassified at 10% (full cream, >26% fat) Waiver Duty Inputs and engines for fishing boats Exempt from Duty, Fishing nets Duty reduced from 35% to 20%0/ Agricultural implements Duty reduced from 35 % to 10%0/ Sugar 25% Duty Duty cut to 18% Duty reduced to 10%/. Specific Duty Rate of Rs. 3.50/ kg levied Maize 100/6 duty Desiccated Coconut Exempt from Tumover tax Tea packing materials Exempt from Turnover tax Edible oils 35% Duty 30% Duty Waiver 20% Duty Waiver 30% Duty Waiver 30% Duty Waiver 25% duty + 25% surcharge Copra 35% Duty 30% Duty Waiver 20% Duty Waiver 20% Duty Waiver 20% duty waiver 25% duty Shrimp and poultry feed 30% Duty Duty waiver Full Duty Waiver Full Duty Waiver NPK fertilizer Exempt from Duty Exemnpt from Duty Exempt from Duty Exempt from and agro-chemicals Duty Seed cleaning, sorting and grading Duty free. Duty free. Duty free. Duty free. machines, seed testing equipment and seed packing mnachines Tea packing machinery and colour Duty free. Duty free. Duty free. Duty free. separators Agricultural tractors, lorries and Duty free. Duty free. Duty free. Duty free. refrigerated trucks. Navigation equip., spare parts for fishing 10% Duty Duty free. Duty free. Duty free. Duty free. boats, fish finding devices, and raw materials for fishing nets Red split lentils 35% Duty Exempt from duty Duty free. Full duty waiver Dried sprats and dried prawns 10% Duty Exempt from duty Duty free. 10% duty Canned fish 10%/o Duty Partial Duty Exempt from duty Duty free. 10% duty Waiver Wheat 35% Duty 20% Duty Full duty waiver Full Duty waiver 20% duty 5% Wheat flour 35% Duty Full Duty Waiver Full Duty waiver 25% Live animals for breeding 10% Duty Duty free. 10% duty Source: Central Bank of Sri Lanka, Annual Reports, various issues 53 Table A3.18. Cultivation Loans Granted Under the New Comprehensive _______________________ Rural Credit Scheme, 1980 - 2001 Cultivatlon Loans Granted ( RS. Million) _ Recoveries (RS. Million) Recove Percenta_ ge Year Paddy Other Crops All Crops Paddy Other Crops All Crops Paddy Other Crops All Cr ps 1981 83.8 34.4 118.2 74.2 30.4 104.6 88.5 88.3 _88.4- 82 112.0 28.2 140.2 96.4 24.4 120.8 86.0 86.5 86.1 83 147.6 26.6 174.2 130.0 24.0 154.0 88-0 90.2 88.4 84 172.2 41.4 213.6 139.4 33.4 172.8 80.9 80.6 80.8 85 121.7 37.5 159.2 102.8 30.8 133.6 84.4 82.1 83.9 86 190.1 91.1 281.2 160.8 76.8 237.6 84.5 . 84.3 84.4 87 262.0 67.6 329.6 191.5 47.7 239.2 73.0 70.5 72.5 88 244.8 84.9 329.7 185.1 71.6 256.7 75.6 84.3 77.9 89 177.7 70.8 248.5 131.7 62.0 193.7 74.1 87.6 77.9 90 290.7 199.0 489.7 227.1 146.6 373.7 78.1 73.7 76.3 91 588.0 234.0 822.0 503.0 190.0 694.0 86.0 81.0 84.0 92 595.0 235.0 830.0 472.0 195.0 667.0 79.0 83.0 80.0 93 569.0 255.0 824.0 497.0 212.0 709.0 87.0 83.0 86.0 94 624.0 293.0 917.0 450.0 241.0 691.0 72.0 82.0 75.0 95 723.0 257.0 980.0 597.0 207.0 804.0 83.0 81.0 82.0 96 476.0 192.0 668.0 339.0 151.0 490.0 71.0 79.0 . 73.0 97 412.0 178.0 590.0 320.0 143.0 463.0 78.0 80.0 78.0 98 327.0 152.0 479.0 280.0 120.0 400.0 86.0 79.0 83.0 99 312.0 151.0 463.0 269.0 118.0 388.0 86.0 78.0 84.0 2000 381.0 122.0 503.0 255.0 73.0 328.0 67.0 60.0 65.0 Source: People's Bank Bank of Ceylon Hatton National Bank Ltd. Seylan Bank Ltd. Regional Development Bank. 54 Table A3.19: Volume of Exports of Plantation Crops 19902000 (Volume n Metric Tons) Product 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Tea 21990 212395 181676 218407 229561 240802 244109 268537 271868 269279 288183 Rubber 86800 76300 78600 69600 69100 68300 72100 61500 413000 429000 325000 Copra 7250 8266 5850 4935 6485 10219 7843 8547 8997 11212 14564 Coconut Oil 13978 1049 2430 2578 4529 8954 2813 3701 2668 3621 4656 Desiccated 52969 47164 53454 36437 54166 67154 60797 63739 45237 62950 82735 coconut Coffee 1244 2660 1652 1009 4371 1281 692 1150 1588 824 41 Pepper 1308 2074 2153 7939 3490 2768 2987 3484 5493 3754 4855 Cinnamon 6512 7889 8238 8755 11040 9852 10077 10661 9401 10486 10103 Cloves 2292 1037 1114 1688 850 1116 1429 2461 1907 3409 957 Nutmeg & 270 486 815 784 666 755 1084 760 899 1148 1308 Mace I_I Cardamoms 34 29 21 14 26 _19 6 9 16 17 8 Cashew Nuts 1281 1102 1062 1384 389 349 334 599 420 150 92 Average P. 0. B. Prices of some major agricultural products 1990-2000 (US$ per Kg.) Product 1990 191 1992 1993 1994 1995 1996 1997 1998 1999 2000 Tea 229 2.04 1.87 1.88 1.86 1.87 2.52 2.01 2.86 2.30 2.44 Rubber 0.89 2.84 0.86 0.92 1.06 1.39 1.44 1.28 1.04 0.76 0.88 Copra 0.41 0.59 0.73 0.7 0.62 0.61 0.75 0.79 0.78 0.79 0.74 Coconut 0.53 0.85 0.99 0.93 0.85 0.78 0.92 0.88 1.15 0.96 0.70 Oil I I Desiccated 0.67 0.79 1.01 0.89 0.79 0.78 1.19 1.13 1.01 1.14 0.78 coconut Coffee 0.75 0.69 0.67 0.9 1.75 1.96 1.41 1.32 1.35 1.34 1.93 Pepper 2.25 1.64 1.30 1.01 1.85 2.52 2.36 3.93 4.84 4.92 4.31 Cinnamon 4.55 4.4 422 3.88 3.01 3A0 3.45 4.38 5.38 4.77 4.49 Cloves 2.54 1.48 1.25 0.88 0.99 1.14 1.07 0.91 1.14 1.72 4.21 Nutmeg & 2.1 1.21 1.32 0.94 1.21 1.37 1.25 1.96 2.13 3.85 4.23 M ace _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Caniamoms 7.11 5.75 6.74 10.98 8A8 8.24 12.06 13.18 11.61 11.66 11.54 Cashew 5.4 6.35 5.17 5.11 4.66 6.27 5.63 5.12 5.60 6.70 6.88 Source: Sri Lanka Customs & Central Bank of Sri Lanka 55 Table A3.20: Agricultural Exports - Other Agricultural Crops (Value In USS Mn.) % Av. Year/Product 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Growth Arecanut 2.44 1.45 0.18 0.36 2.16 2.42 2.45 4.27 5.57 0.58 11.03 Coffee 1.89 1.14 0.97 7.61 2.48 0.98 1.52 2.14 1.10 0.08 -18.50 Spices Pepper 3.42 2.85 8.29 6A2 6.96 7.28 14.01 26.71 18.77 21.35 . 22.98 Cinnanton 34.72 34.79 34.00 32.94 33.49 34.73 46.57 50.35 50.03 45.42 4.85 Cloves 1.53 1.40 1.49 0.83 1.27 1.53 2.22 2.17 5.86 4.04 14.42 Nutmeg and Mace 0.59 1.07 0.74 0.79 1.03 1.36 1.49 1.91 4.41 5.54 22.43 Cardamonms 0.16 0.14 0.16 0.22 0.15 0.07 0.11 0.18 0.19 0.09 -3.19 Sub Total-Spices 40.42 40.25 44.68 41.20 42.90 44.96 64.40 81.32 79.27 76.44 9.01 Sesame Seeds 1.01 1.28 0.00 0.01 0.15 0.01 0.40 0.43 0.01 0.08 -14.23 Other oil seeds 0.07 0.03 0.18 0.16 0.03 0.10 0.03 0.01 0.01 0.01 -27.27 Betel leaves 1.86 1.92 2.60 1.26 0.06 1.33 0.88 0.75 1.90 1.67 -3.13 Cocoa 0.08 0.06 0.06 0.01 0.00 0.10 0.16 0.12 0.06 0.01 -1.87 Un-tanufactured Tobacco 5.88 39.09 36.51 32.68 35.63 42.39 34.32 40.83 36.95 37.35 10.38 Papin 0.03 0.04 0.08 0.04 0.04 0.02 0.09 0.14 0.35 0.46 26.85 Essential Oils 2.79 2.78 2.78 3.45 5.17 3.32 3.84 5.23 3.87 3.82 4.96 Cashew Nuts 7.01 5.40 7.07 2.26 2.19 2.17 3.25 2.51 1.15 0.75 -21.22 Vegetables 6.06 5.20 8.02 12.40 5.82 7.29 7.77 8.55 7.69 8.17 2.77 Fruits Fresh or Dried 1.77 1.82 2.30 2.59 4.10 6.13 3.85 2.12 6.20 4.47 10.98 Cut Flowers & Foliage 6.39 6.55 5.94 8.24 8.38 8.21 8.19 7.57 8.12 8.24 3.01 Others 5.05 3.97 6.48 12.67 18.42 5.06 5.60 6.00 4.43 5.63 -1.44 Total 82.75 110.97 117.83 124.96 127.55 12450 136.76 161.8 156.69 148.14 5.75 Source: Sri Lanka Export Development Board, 2001, Export Performance Indicators 1991-2000, Colombo: Policy and Planning Division, Export Development Board. Table A3.21: Export Performance 1991-2000 (Value in USS Mn.) % Av. Product I991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Growth Tea 431 339 387 425 479 615 719 775 620 701 8.42 Rubber 64 67 59 72 110 102 78 42 32 29 -8.39 Coconut 63 84 56 76 101 109 114 90 125 115 7.06 Traditional Exports 558 490 502 573 691 827 911 907 777 845 6.96 Other Ex. Crops 83 III III 125 129 124 137 162 157 148 5.94 Fisheries 21 30 41 63 71 74 74 102 72 136 16.87 Gems, Jewelry 133 175 212 253 275 280 226 124 140 286 1.42 Textiles, Garments 804 1200 1325 1550 1841 1900 2261 2450 2415 2981 12.69 Manufactures 265 340 382 521 653 728 831 829 802 872 13.4 Petroleum Products 82 62 78 83 89 104 97 72 77 103 2.3 Re-Exports 21 3 14 17 20 23 51 72 46 137 29.15 Others 23 49 26 29 32 30 38 41 124 34 7.47 Non Traditional Exports IIIIII Non Traditional Exports _ 1431 1970 2189 2641 3109 3264 3715 3813 3833 4697 11.63 Total Exports 1989 2460 2691 3214 3799 4090 46261 4721 4610 5542 10.65 Source: Sri Lanka Export Development Board, 2001, Export Performance Indicators 1991-2000, Colontbo: Policy and Planning Division, Export Development Board. 56 Table A3.22: Agricultural Investment Projects (Rs. Millin 1992 1993 1994 1995 19 F L E F L E F L E I F F Awaiting Agreement - ___ ___ ___ ___ Veg / Fruits/ Cut Flower __ _ _ _ _ _ i _ _ _ _ _ I_ _ _ _ _ _ _ _ _ __ _ 7 ____ Cereal _ _ _ I _ _ I _ _ _ _ _ O il seed_ _ __ _I _ _ _ II __ _ __ __ O th er_ _ _ _ _ _ _ _ __ _ __ _ _ Livestock _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ F ish ing _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Awaiting Construction__ _ __ _ __ _ __ __ __ _ _ _ _ _ _ _ _ Veg / Fruits/ Cut Flower C ereal_ _ __ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _4 Oil seed __ _ 163_ Other 35 28 1871 Livestock_ ___ __ _ _ __ _ __ __ 4 Fishing _ _ _ _ .._ _ _ _ _ _ _ _ I _ Under Construction Veg /Fruits, Cut Flower t _ __ 3 28 1 756 94 20 15 1183 Other _ __ _ 4 44I Livestock__ _ _ _ _ ___ _ __ _ _ 444 _ _ _ _ _ _ 4 _ _ _ 4 _ _ _ Fishing_ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ £ _ I _ _ Commercial Operation__ ___ _ __ _ __ _ __ _ __ _ __ _ __ _ _ _ _ _ _ _ _ _ _ Veg / Fuits /Cut Fower 1 5 1 3 226 38 23 205 130 1 9 550 77 21 210 85 24 III OiCer e dal_ _ _ _ _ _ _ _ 11 7 1 7J 1 6 _ _ _ 1 5 3 _ _ _ _ _ _ _ _ Cerel fee____17 17 11 216 3 92 2539 _ _ _ _ _ Other I__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 216 _ 3_ _ 22_ 39 _ _ _ _ _ Livestock _ _ _ _ _ _ j165 5 _ _ t _ _ - _ - _ _ Fishing _ __ _ _ i i1__ 44 *89 272 1997 __ _ _1998 1999 _ _ _ _ _ 2000 _ _ _ _ _ 2001 _ _ _ F LIE ~F L E F JLJ E FILL E F LIE_ Awaiting Agreement _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Veg /Fruits,Cut Flower EZZZZZ 1018 1116121 109 413 24 50 225 3011371315 Cerel :~L_ _ I Oil seed [............181 961 ____1___ __ 90 [131 j 471 Source: A. Weliwita and R.. Epaarachchi, 2002, "Agricultural Policies and Their Imiplications for the Non-Plantation Agricultural Sector 1995-2000," Background paper prepared for the World Bank Sri Lanka Agricultural Policy Review," minieo. 57 Table A4.1: Employment Status In Sri Lanka by Sector and Employment Status, 190 - 2000, 000 people Number, 0000 Ave Annual Category Growth Rate 1990 1991 1992 1 993 1994 1995 1996 1997 1998 1999 2000* 90-00 96-00 1. Agrculture 2,362 2,132 2,0891 2,158 2,086 1,966 2,071 2,030 2,451 2,208 2,269 0.3% 2.7% H Non-Agiiculture 2,412 2,553 2,5361 2,679 2,804 2,989 3,079 3,157 3,169 3,364 3,820 4.2% 5.1% 1. Industry 782 828 749 796 829 905 925 1,043 972 1,010 998 3.2% 1.2% Mining & Quanying 81 55 79 78 42 91 89 90 72 79 43 -0.90/o -14.7% Manufactuing 671 752 650 687 755 787 808 920 863 900 925 3.5% 2.5% Electricity, Gas & Water 30 20 20 31 32 271 28 34 36 30 30 3.2%1 0.9% 2. Services 1,469 1,485 1?588 1,649 1,764 1,795 1,960 1,918 2,016 2,172 2,640 5.2% 7.5% Construction 197 236 238 229 217 284 299 314 296 322 304 4.7% 0.6% Trme &Hotel 207 206 218 213 248 252 271 269 284 310 785 9.2% 25.4% Transport, Storage & 207 206 218 213 248 252 271 269 284 310 286 4.3% 2.5% Commnunication Insurance 66 95 74 83 95 80 111 95 115 103 116 4.5% 1.7% Personal Services 792 742 839 910 956 927 1,008 970 1,038 1,125 1,150 4.0% 4.2% 3. Not Defined 162 241 198 234 211 289 194 1961 181 182 182 -1.1% -1.9% Population, Mid-Year (000) 17,015 17,267 17,426 17,646 17,891 18,1361 18,336 18,552 18,774 19,043 19,359 1.3% 1.4% Source :Sri Lanka Labor Force Survey, Deparanent of Census & Statistics. 58 Table A4.2: Percentage Distribution of Employment In Sri Lanka by Sector and Employment Status, 1990 - 2000, Percent. Category 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000* 1. Employment Sector (%) l _ Agriculture 46.8 42.5 42.1 41.5 39.5 36.7 37.4 36.2 40.6 36.3 37.3 Industry Mining & Quarrying 1.6 1.1 1.6 1.5 0.8 1.7 1.6 1.6 1.2 1.3 0.7 Manufctuning 13.3 15 13.1 13.2 14.3 14.7 14.6 16.4 14.3 14.8 15.2 Electricity, Gas & Water 0.6 0.4 0.4 0.6 0.6 0.5 0.5 0.6 0.6 0.5 0.5 Services _ Construction 3.9 4.7 4.8 4.4 4.1 5.3 5.4 5.6 4.9 5.3 5.0 Trade& Hotel 4.1 4.1 4.4 4.1 4.7 4.7 4.9 4.8 4.7 5.1 12.9 Transport, Storage & 4.1 4.1 4.4 4.1 4.7 4.7 4.9 4.8 4.7 5.1 4.7 Communication Insurance 1.3 1.9 1.5 1.6 1.8 1.5 2 1.7 1.9 1.7 1.9 Personal Services 15.7 14.8 16.9 17.5 18.1 17.3 18.2 17.3 17.2 18.5 18.9 Not Defined 3.2 4.8 4 4.5 4 5.4 3.5 3.5 3 3 3.0 2. Employment Status (%) Public Eniployes 21.5 22.9 20 17.4 16.4 15.6 15 15.1 13.9 14.5 Private Employes 33.7 39.5 40 42.8 44.3 44.3 45.8 44.3 40.5 43.11 Employees 1.8 2.2 1.6 2 2.3 2.5 2.3 2.3 2 2 Own Account Worker 29.2 25.4 27.1 27.4 27.2 28.3 26.8 28.8 29.4 28.3 Un Paid Family Workers 12.8 10 11.2 10.4 9.8 9.4 10 9.4 14.2 12.21 Source -Sri Lanka Labor Force Survey, Department of Census & Statistics. Table A43: Unemployment in Sri Lanka by Age Group, 1990 - 1999, Percent. Age Group 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 15-19 20.3 19.3 19.2 20.4 22.4 21.1 24 22.5 21.4 23.9 20-24 40.3 42.2 409 38.5 41.2 38.2 39.3 41.5 41.4 40.6 25-29 19.3 16.7 20.4 18.9 15.6 20.1 18.1 19 17.1 17.2 30-39 13.2 15.8 13.4 15.5 15.5 15.1 14.3 12.7 14 12.5 40-49 4.6 4.8 4.5 5 3.9 5 3.6 3.4 4.8 3.9 50-59 . 4 1.34 1.56 1.21 0.5 0.6 0.71 1.1 0.61 60 above 0.5 0.2 0.3 0.2 0.4 0.3 0.1 0.2 0.5 0.4 Source Sr Lanka Labor Force Survey, Department of Census & Statistics. 59 ____________________________ Table A4.4: Value of Industrial Production (a) ._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Rs. M illion No Categories 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 (b) I Food, beverages and tobacco products 30,003 34,157 39,709 45,054 54,927 68,209 75,713 86,994 94,687 105,671 Textiles, wearing apparel and leather 2 products 33,854 53,929 70,05 85,845 104,6i 117,539 146,500 165,443 178,84 215,686 Wood and wood products 802 . 1,005 1,230 1,601 1,929 2,171 2,299 2,511 2,715 3,084 Paper and paper products 2,214 2,586 3,438 4,066 4,595 5,069 5,462 5,593 5,854 6,516 Cheniical, petroleum, rubber and plastic g roducts 20,140 23,817 28,876 34,017 38,321 46,936 50,682 59,724 62,590 74,670 Non-metallic mineral products 8,181 10,582 12,351 14,580 16,740 18,997 21,403 23,830 26,830 28,198 Basic metal products 1,264 1,424 1,497 1,909 1,736 2,248 2,439 2,841 3,046 3,378 Fabricated metal products, machinery and 8 binsport equipment 5,093 5,948 5,915 7,122 7,977 8,807 11,327 13,241 14,305 15,678 9 !Manufictured products (n.e.s.) 2,373 2,658 3,402 4,083 5,271 6,183 7,324 8,1371 9,002 9,839 Total 103,924 136,106 166,475 198,271 26,098 276,159 323,149 368,314 397,873 462,720 (a) Value of production is estimated on the basis of ex-fiatory value of production. (b) Provisional Sources: Board of Investment of Sri Lanka Central Bank of Sri Lanka 60 Table A4S5: Industrial Production Value Added, Rs million Categories 1980 1985 1991 1992 193 1994 1995 1996 1997 1998 1999 200 (b) I Food, beverages and tobacco products 1795 6166 15,070 18,668 21,704 24,373 29,001 32,891 35,515 40,452 44,503 49,031 2 Textiles, wearing apparel and leatherproducts 382 2594 8,542 14,630 18,994 19,916 24,895 31,148 40,581 47,482 55,263 69,451 3 Wood and wood products 165 420 571 677 831 1,081 1,177 1,250 1,258 1,313 1,390 1,554 4 Paper and paper products 305 543 1,167 1,397 1,912 2,301 2,458 2,580 2,633 2,578 2,664 2,808 5 Chemical, petroleum, rubber and plastic products 1249 1402 3,199 3,989 4,723 5,758 6,898 8,957 10,745 14,274 13,832 17,771 6 Non-metallic mineral products 608 1089 4,905 5,918 7,163 9,272 9,726 10,537 11,600 12,463 13,817 14,240 7 Basic metal products 80 38 248 263 279 356 347 450 598 710 777 959 8 Fabricated metal products, machinery and transport equipment 297 1055 3,247 3,629 3,608 4,344 4,547 4,809 5,924 6,779 7,367 7,714 9 Manufactured products (n.e.s.) 12 59 1,092 1,196 15,332 1,838 2,319 2,763 3,157 3,426 3,799 3,965 Total 4,893 13,366 38,041 50,367 74,546 69,239 81,368 95,385 112,011 129,477 143,412 167,493 (a) Provisional. Sources: Central Bank of Sri Lanka, Annual Report, various issues. 61 Table A4.6: Capacity Utiiisation In Industry (a) Perctae uilization of capacity No. Categories 1994 1995 1996 1997 1998 1999 2000 (b) I Food, beveages and tobaco products 93 93 90 89 90 88 89 2 Textiles, wearing apparel and leather products 83 85 82 86 85 86 88 3 Wood and wood products 80 80 79 76 77 77 76 _ Paper and papa products 92 90 88 88 88 89 89 5 Chemical, petroleum, rubber and plastic products 67 67 66 68 70 68 73 6 Non-metallic nineral products 87 .87 87 86 84 82 82 7 Basic metal products 45 45 47 47 48 47 50 8 Fabricated metal products, nachiney and transport equipment 91 90 88 90 87 85 87 9 anufactured products (n.e.s.) 94 93 90 90 90 88 88 Average 83 84 83 84 84 83 85 (a) Excluding BOI Enterprises (b) Provisional Sources: Central Bank of Sri Lanka Table A4.7: Agricultural Investments, 1992-2000 Seetor Total Investment %Foreign %Local iule 2,128 690% 31 % orticultree 11228 48% 52% 118 12%0 4 88% Livestack 2,031hing 557 62% 38%0 - vtoc ishm 5572,031 61% 39% Note: Includes only agricultural investments under commercial operation. Source: Board of Investments. 62 Table A4,8: Realized Investments in the Board of Investment (BOI) Enterprises a) Number of enterprises Foreign Investment (Rs. Mn_ _T Total investment potental (Rs. Categories 1996 1997 1998 1999 2000 (b) 1996 1997 1998 1999 2000 (b) 1996 17 1998 1999 2000 (b) Food, beverages and tobacco products 77 92 149 147 141 2,274 4,253 5,199 5,476 4,301 4,437 7,923 11,392 11,801 10,612 Textiles, wearing apparel and leather products 267 287 386 417 439 12,351 15,456 16,8191 18,248 20,463 15,045 21,843 25,021 28,630 30,779 wood and wood products 19 21 26 25 22 474 515 671 578 458 564 689 935 972 830 paper and paper products 12 14 22 21 22 326 438 461 489 521 550 688 649 698 755 chemical, petroleum, rubber and plastic products 66 76 101 100 121 5,762 5,921 7,121 7,930 8,340 6,877 7,173 9,370 10,329 12,414 Non-metallic products 42 48 66 63 61 972 1,035 3,044 4,081 3,581 2,783 1,985 4,842 6,999 6,631 Basic metal products Fabricated metal products, machinery and transport equipment 20 251 35 38 41 6051 1,186 2,832 4,703 3,873 1,1801 1,817 3,6161 5,661 5,093 Manufactured products (n.e.s.) 102 122 171 158 159 3,499 4,207 5,646 5,105 6,253 4,647 6,179 8,853 8,225 8,937 Services 255 300 402 430 497 34,694 45,680 58,438 70,363 84,025 55,539 70,70( 86,529 102,704 118,675 Total 860 985 1,358 1 ,39 1 1,503 60,957 78,691 100,231 116,973 131,815 91,62 1 18,9 151,207 176,0191 194,726 (a) Cumulative figures as at end of the year. (b) Provisional Source: Board of Investment of Sri Lanka 63 Table A4.9: Principal Indicators of industrial activity dassified by industry division & persons engaged size dass - 1997 (for Agri-based manufacturing sector ) (Establishment with 5 or more persons engaged) No. of Establish- Persons Employees Gross additions to Industry division & persons engaged size dass ments (No) engaged (No) (No) Value of output (Rs) Value of Input (Rs) Value added (Rs) fixed assets (Rs) Food, Beverage & Tobacco Group Total 4,141 87,822 80,576 90,090,764,183 43,497,851,688 46,592,495 1,513,361,275 less than 10 2,661 14,890 9,668 1,335,504,083 985,807,345 349,696,738 11,040,848 10- 19 580 8,510 7,332 2,586,249,515 1,805,640,334 780,909,182 19,696,622 20-39 426 11,553 10,973 3,418,187,750 2,039,958,885 1,378,228,865 72,314,407 40-99 352 22,029 21,794 20,779,913,966 13,435,539,934 7,344,374,032 288,801,672 100-499 111 19,412 19,383 32,460,368,293 20,699,581,795 11,760,786,498 441,100,461 500 & above 11 11,429 11,426 29,510,540,576 4,531,323,396 24,979,217,180 680,410,265 Textile, Wearing Apparel& Leather Group Total 2,918 221,649 218,654 74,197,230,731 42,465,962,041 31,731,268,690 20,005,839,320 less than 10 1,098 5,771 4,593 519,798,649 201,479,964 318,318,685 10,468,335 10- 19 1,121 15,881 14,688 1,648,779,499 1,013,276,839 635,502,660 74,444,894 20 - 39 190 4,893 4,735 851,719,341 385,640,449 466,078,892 45,568,660 40 - 99 195 12,208 11,941 2,892,458,352 1,527,771,663 1,364,686,689 80,370,801 100-499 183 44,168 44,010 11,424,220,463 5,981,719,829 5,442,500,634 591,758,795 500&above 131 138,728 138,686 56,860,254,426 33,356,073,296 23,504,181,130 19,203,227,835 Wood, Wood Products & Furniture Group Total 1,039 15,895 14,923 1,791,686,162 567,158,476 1,224,527,686 150,381,312 less than 10 739 3,818 2,974 287,713,368 135,159,598 152,553,770 2,028,000 10 - 19 214 2,556 2,471 165,981,468 58,427,923 107,553,545 78,666,100 20-39 46 1,203 1,191 187,928,074 43,658,310 144,269,765 4,552,163 40 - 99 24 1,418 1,398 476,375,063 129,740,993 346,634,070 5,749,645 100 - 499 16 6,900 6,890 673,688,189 200,171,653 473,516,536 59,385,40 500 & above - - - Group Total 13,557 495,355 477,129 295,809,439,655 159,680,425,910 136,129,013,745 32,652,462,586 Source: Departnent of Census & Statistics, 2000, Annual Survey of Industries, 1998, Colombo: Department of Census & Statistics. 64 Table A4.10: Historical Table of Currently Employed Persons by Major Industrial Groups Major Industrial Groups % Year Total Agrlculture = Manufacturing Personal Services Other Number Male | Female Male | Female Male | Female Male | Female 1993 3,601,807 40.0 45.0 9.2 22.1 15.8 21.5 35.1 11.4 1994 3,678,652 37.3 44.6 10.8 22.3 16.9 20.7 35.0 12.4 1995 3,700,948 35.8 38.7 10.3 24.7 15.4 21.6 38.5 14.9 1996 3,857,229 35.3 42.4 11.1 22.5 16.8 21.4 36.8 13.6 1997 3,862,088 34.6 39.8 11.8 26.6 15.9 20.2 37.7 13.4 1998 1 3,855,333 37.7 48.8 12.4 20.8 15.8 19.1 34.1 11.3 2 4,018,229 35.6 43.1 12.6 20.8 15.6 21.3 36.1 14.8 3 3,993,628 35.0 44.2 11.3 22.7 17.8 19.6 35.9 13.5 4 4,059,768 41.1 51.5 8.4 17.0 14.9 18.5 35.6 13.1 1999 1 4,063,761 37.3 48.6 10.8 19.3 17.6 18.8 34.2 13.2 2 4,058,171 32.3 40.7 11.2 21.9 17.7 23.1 38.8 14.3 3 4,136,710 30.9 39.8 11.7 23.3 18.0 20.3 39.4 16.7 4 4,176,864 32.1 41.0 12.4 22.2 16.1 21.4 39.3 15.4 Source: Dept..ofCensus & Statistics, 2000, Quarterly Report of the Sri Lanka Labor Force Survey, Fourth Quarter, 1999, Colombo: Department of Census & Statistics. 65 Table A4.11: Private Sector Industrial Production Index (1990=100) Categories Indix 1995 1996 1997 1998 1999 2000 (a) Food, beverages and tobacco 155 166 171 188 193 205 products Food and other 155 166 176 196 207 218 Liquor 160 183 177 207 199 207 Beverages 175 180 207 226 221 250 Tobacco 128 135 121 121 118 115 Textiles, wearing apparel and 206 217 258 269 289 334 leather products Apparel 223 235 284 297 322 376 Textiles 171 174 191 199 198 226 Leather 162 172 193 196 203 221 Wood and wood products 170 165 165 163 168 178 Paper and paperproducts 266 279 287 289 286 314 Chemical, petroleum, rubber and 196 224 257 286 299 326 plastic products Chemicals, paints and fertilizers 162 183 212 240 258 292 Rubber 181 . 213 253 274 279 313 Plastic & PVC 161 182 210 227 252 270 Pharmaceuticals, detergent and 204 235 265 297 312 330 other Non metallic mineral products 228 243 254 -267 288 294 Diamond processing 280 270 260 237 274 281 Ceramic products 158 181 189 195 199 202 Cement 199 212 232 276 285 286 Building material and other 180 204 221 241 257 276 Basic metal products 305 351 359 399 412 429 Fabricated metalproducts 147 150 178 197 208 217 Manufactured products not 193 221 250 262 280 290 elsewhere specified All categories 192 205 230 246 259 286 (a) Provisional Source: Central Bank of Sri Lanka Board of Investment of Sri Lanka 66 Table A4.12: Percentage distributdon of currently employed population by major Industrial group and sector -1999 Sector Major Industrial Group Total Urban Rural Total 100.0 100.0 100.0 Agriculture, livestock, & Fisheries 35.0 2.8 40.4 Mining & Quanrying 1.1 0.1 1.2 Manufacturing 15.6 17.5 15.2 Electricity, Gas, & Water 0.5 0.2 0.6 Construction 5.5 5.5 5.5 Trade and Hotels, etc. 13.2 24.5 11.3 Transport & Communication 5.5 8.8 5.0 Insurance & Real Estate 2.0 6.1 1.3 Personal & Comnnunity Services 17.8 30.2 15.7 Not Defined 3.9 4.3 3.8 Source: Department of Census and Statistics, Quarterly Report of the Sri Lanka Labor Force Survey, Fourth Quarter, 1999, Colombo: Department of Census & Statistics Table A4.13: ,engtb of public roads, 1995 - 1999, Division 1991 199 1997 199"l 19 SriLanka 11,131 11,147 11,1470 11,285 11,462 Western 1,49 1,49. 1,498 1,503 I,5 Central 1,677 1,678 1,678 1,678 1,691 outhern 1,213 1,213 1,213 1,215 1,252 orthern 1,25 1,255 1,259 1,255 1,25 Eastern 1,07 1,079 1,079 1,081 1,104 ortb-western 1,261 1,26 1,268 1,26d 1,268 orth-central 1 ,05 1,056 1,05 1,06C 1,098 Uva 1.02. 0042 1,02 1,13 1,14t abaragamuwa 1,05 1,05t I 561 1,07t 1,104 Note: Category A and B roads only. Source - Ministry of Transport and Highways 67 Table A4.14: Classification of Road Facilities In Sri Lanka by District/Proyince and Typ 199 -,k Province Class A I/ Class B 2/ Class C 3/ Class D 4/ Class E _5/ Total 1. Western 373 112 1124 83 . _ _ 3451 Colomb 16 249 250 15 _ 823 Ganiph 12 578 397 47 _ 1578 Kalutar 8 29 477 1 01 105 Z. Centfal 409 1271 1774 411 24 4110 Kand 18 52( 951 9 2 1778 Matal 10 26 335 18 48 93 NEliya 120 48( 488 12 178 139 3. Southern 353 860 830 802 53 2891 Galle 103 36 323 32 531 117 Matr 13 22 259 235 853 Hambantot 11 271 24 241 87 4. Northern 73 52 38 519 ( 2166 Jaffna 381 27 ( _ _ 658 Kilinochch n.a. n.a n.a n.a n.a n.a Manna 113 9. I 166 _ 481 Mullatin 113 102 178 151 ( 54 Vavuni 128 5 99 202 48 S. Eastern 620 459 377 20 1 167 Batticoloa 172 59 216 1131 1 57 AmpaL 30 23/ n.a. n.a. n.a 53 Trincomnal 141 17( 161 91 . 563 6. North Western 353 91 992 1032 3 332 Kurunegala 19 591 640 8 1 228 Puttan 156 32 352 19 1! 1043 7. North Central 49 562 988 758 _ 2802 Anuradhapu 352 382 687 701 2122 Polonnaruwa 142 180 301 5 7 68 8. Uva 468 666 1163 476 20 2882 Badulb 26 42 92 233 141 199 Monaragal 20 14 23 243 5t 88 9. Sabaragamuwa 416 641 822 31 0_ 2193 Kegale 14 24! 44; 26 5 1093 Ratnapur 272 39 38d 4 _____ 1093 Total 4221 6921 845 5344 55 25503 Source: Road Development Authority _1/ All road within the net work of trunk roads _21- Main roads connecting other important Twons 3/ Agricultural and local roads 4/- Gravelled roads 5/- Briddle Paths 68 Table A4.15: Changes in Telecommunication Services in Sri Lanka, 1989 - 1999 Service 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 I.Sri Lanka Telecom Ltd. Telephones 105,744 123,585 125,834 135,504 157,774 180,724 204,350 254,500 315,241 455,598 580,199 New Telephone Lines Given 3,336 17,756 6,579 10,607 22,270 25,322 24,556 50,170 72,457 143,075 133,709 Telex Connections (New) 1,591 1,666 1,740 1,583 1,626 1,845 1,847 1,253 1,104 n.a. n.a. 2. Other Agencies Cellular Phones n.a. n.a. n.a. n.a. 6,242 29,182 51,316 71,028 114,888 174,202 256,665 Wireless Local Loop Telephones n.a. n.a. n.a. n.a. n.a. n.a. n.a. 527 26,381 67,931 91,717 Public Pay Phone Booths n.a. n.a. n.a. n.a. n.a. 905 1,597 3,002 3,682 4,716 5,799 Radio Paging Subscnbers n.a. n.a. n.a. n.a. n.a. 6,302 9,565 10,721 10,829 10,511 10,300 E-Mail and Internet Subscribers n.a. n.a. n.a. n.a. n.a. 175 273 4,110 10,195 18,984 25,014 TelephoneDensity(Telephoneper lI00Persions) 6.3 7.1 7.3 7.8 9.0 11.8 14.2 17.9 24.7 37.9 49.6 Source: Sri Lanka Telecom Ltd and Central Bank of Sri Lanka 11 0.0, " I , P F 6.7, . . . 11   '.- j - - I 1 ReporZ No.: i Type: SR i i