Agriculture, key to develop Jaffna economy

The Jaffna district, one of the four districts in the Northern Province (NP) of Sri Lanka consisting of an area of 1,023 square kilometres came alive with the strong private sector led Industrial Exhibition that concluded recently in Jaffna. The leading brand names attracted 168 private sector companies to display their companies products in Jaffna.

The Derana TV station with Munchee launched the Derana North Star competition with the winner getting a brand new Maruti car worth Rs.1 million from AMW. This is a clear vote of confidence from the private sector in the Jaffna market and an acknowledgement of the business opportunities and its potential.

The Government is looking to build on Jaffna’s key strengths, while gearing the Jaffna workforce towards an economic revival with a focussed development programme.

Agriculture, livestock farming, and fisheries were adversely affected and although some modest recovery was made during the brief ceasefire period, much needs to be done to make the gains sustainable. Crops such as paddy, red onions and chillies have fallen dramatically since 1990, but showed some recovery between 2001 and 2005.

Paddy production had fallen to 14,000 metric tons in 2005 from 34,000 metric tons in 1990. Red onion production had fallen to 11,400 metric tons in 2005 from 31,400 metric tons in 1990. Chillie production had fallen to 1,301 metric tons in 2005 from 6,116 metric tons in 1990.

Milk production

However, milk production was virtually unaffected and actually showed a marginal increase between 1990 and 2005.

Egg production fell between 1990 and 2000 but picked up from 2001. Fisheries was also badly hit, with the fish catch declining from 54,000 metric tons in 1980 (pre-conflict) to 34,000 metric tons in 2004.

The tsunami caused this to plunge to 13,000 metric tons in 2005. But there was an encouraging increase from 14,000 before the ceasefire to 34,000 in 2004, the biggest gain made by a primary sector industry in the Jaffna economy as a result of the ceasefire. The manufacturing sector in Jaffna also declined between 1983 and 2003, with the number of industries falling by nearly 10% and employment in industries cut by half.

Jaffna has a large untapped, unmarketed potential in the key agricultural crops of the area (paddy, red onion, chillies, potato, tobacco) and livestock produce and it is essential that better market linkages are created. Naturally, a key factor in improving market access is the opening of the main A9 highway.

Cheaper goods

Once this is achieved, improving Jaffna’s farmers’ access to markets outside the peninsula must be a priority. Setting up a dedicated agricultural economic centre similar to that in Dambulla, improving storage facilities to reduce waste of perishable goods and improving the road networks linking Jaffna to neighbouring regions.

Not only are road networks essential to allow Jaffna farmers access to other markets, but also for Jaffna consumers to access cheaper goods. Some estimates show that a typical basket of goods could cost nearly 18% more in Jaffna vis a vis Colombo. In general, improvements to roads and transport facilities, electricity and telecom are essential to reduce transactions costs in Jaffna and facilitate freer commerce.

The Government has launched the Uthuru Wasanthaya programme aimed at reviving the North. The Uthuru Wasanthaya initiative has set aside Rs. 3 billion to rebuild 80,000 houses and restore the livelihoods and Rs. 500 million for resettlement programmes.

Donor agencies are also actively involved in the Northern revival process, with the World Bank operating its North-East Irrigated Agriculture Project (NEIAP), North East Emergency Rehabilitation Project (NEERP), Education Sector Development Project (ESDP) which includes the North and East among other Provinces and the Community Livelihoods in Conflict Affected Areas Project.

Revival activities

In its latest Country-Assistance Strategy (2009-2012), the World Bank notes, in its section on post-conflict development, that it is actively pursuing integrated rural infrastructure and livelihood development, addressing the needs in public service delivery, rebuilding schools and clinics, support for housing, rehabilitation of inter-village roads and community infrastructure, improving the business environment, support for reducing youth unemployment, introducing trauma counselling at village level and enhancing inter-ethnic awareness by learning a ‘link’ language such as English as well as learning each others languages.

The Asian Development Bank is also involved in revival activities via its North East Community Restoration and Development Project (NECORD) and the Conflict Affected Area Rehabilitation Project (CAARP).