Assessment of USAID's agribusiness program : Sri Lanka case study

The first chapter provides a brief description of the economic and social landscape of Sri Lanka and explains the nature of the five projects which constitute the agribusiness program in the country -- Mahaweli Agricultural and Rural development Project (MARD), Mahaweli Enterprise Development Project (MED), Agroenterprise Project (AgEnt), Enterprise Development Training Program (EDTP), and Commercial Small-Farm Development Program (CSFDP). The second chapter critically examines the contribution of the program in generating and/or strengthening agribusiness enterprises, commercial farms, and farmer organizations. The third chapter explores the program's impacts on employment and income generation, the status of women, and the promotion of a climate conductive to the growth of agribusiness sector. It seeks to determine the benefit small farmers receive from the program. The fourth chapter presents economic analyses of the MED and MARD programs, the two major components for which adequate economic data were available. Finally, the last section identifies major lessons learned. (1) It is more realistic to promote limited technology transfer and marketing arrangements between international firms and local entrepreneurs than to attract direct foreign investment. (2) Contract farming emerged as an effective way to link small farmers with agribusiness firms that process and export high value agricultural exports -- as seen in the case of gherkins. (3) Microenterprises can play a significant role in stimulating and expanding the agribusiness sector. (4) Program designers should consider how the growth of agribusiness will affect women, with special attention to women's ownership of agribusinesses. (5) In economies where domestic markets for commercial crops or value-added processing are not developed, agribusiness programs should try to remove constraints on the domestic market. (6) The agribusiness program has benefited small farmers and landless laborers, as well as large landowners. (7) Projects designed to introduce new crops, technologies, and marketing channels can be very costly. If adoption rates are low and benefits are small, the economic rate of return will be low.