Agriculture export earnings to cross the Rs. 4 b mark:

Export sector performs well in 2007

Ramani Kangaraarachchi

The export industry of the country has performed extremely well in 2007 with outstanding results.

The total exports in the country during the first half of the year has recorded US $ 3568 million which is a growth of 12.86 per cent.

Sri Lanka also had a very good year in the agricultural sector. According to Chairman National Agribusiness Council Sarath De Silva total agriculture export earrings increased by 16 per cent last year.

“In 2006 total agriculture export earnings were at Rs. 3 billion,” he said. He said they are expecting to cross the Rs. 4 billion mark by end of 2008. “There is an emerging market in India for niche fruits and currently the quarantine issue is being discussed,” he said.

The demand for local fruit and vegetables has a global demand. “However due to the scarcity of land to introduce a farmer out grower system for agriculture we are not in a potion to meet this demand,” he said.

De Silva also said due to efforts made by the Post Harvest Institute the agriculture waste is being reduced by almost 16 per cent. He also said that there is over Rs. 150 million with the Inland Revenue Department which has to be given back to agri exporters as VAT refunds. “We will be taking up this issue with the Treasury tomorrow,” he said.

The country has exported different products mainly garments, tyres, gems, textile articles etc to seventeen countries around the world in the year and the highest amount of foreign exchange had come from USA which is US $ 978.81 million.

The lowest recorded from exports to Australia which is US $ 32.69 million which is a still a growth of 16.13 per cent. Exports to UK, India, Germany, Belgium and Italy have recorded the next highest places respectively.

However the difference of export income coming from USA and UK stands at US $ 504.48 million.

As such the Exporters’ Association warns that there are many challenges that the country will have to face in the future.

It is estimated that GDP growth will slow down in the next two years with Rs 130 billion allocation for the war and the slow pace of structural reforms of the country.

These moneys could have been used for Research and Development which is a mere 0.16% of the GDP currently.

Meanwhile, referring to the future challenges the Exporters’ Association recommends that Sri Lanka must focus on the BPO sector.

For the industry to be competitive in the future country has to move towards launching innovative products and supply chain management.

The association observes that this movement to a knowledge based industry will require investment of 7-10 million dollars and as a nation country has to be strong to face these challenges with a public/private sector initiative.