Mahaweli agriculture and rural development project : final report

The MARD project successfully initiated a transition from a paddy-based economy to one of diversified production in System B. Specific progress under its five components was as follows. (1) Agricultural Technology Generation and Dissemination, the project"s largest component, exceeded all targets in achieving its aim of introducing other crops (OCs) into System B farming systems. A total of 40 OCs were introduced, and the staffs of both the Ministry of Agriculture (MOA) and the Mahaweli Economic Agency (MEA) are now knowledgeable about and committed to promoting OC production in System B. In regard to development impact, an increase from 15% to 45% in the number of System B farmers growing OCs during yala (though in conjunction with, not as a substitute for, paddy) indicates wide acceptance of OCs as a source of supplemental income. Figures for 1994 indicate that the total income of System B farmers increased 16% as a result of crop diversification. Nonetheless, the project assumption that farmers could increase incomes by as much as 50% proved valid. In Ellewewa Block, for example, incomes for the 60% of farmers who diversified increased by 62% for 1994 yala production. (2) After initially suffering from lack of interest, the Strengthening Farmer Organizations component took off when, 4 years into the project, MEA initiated a major effort, with major support from the project, to transfer D-canal operation and maintenance (O&M) to farmers. A total of 103 D-canal farmer organizations have been formed and have received project training, and 25 have fully taken over their canals. This is a major development achievement with benefits that extend to all of Sri Lanka"s irrigation schemes. (3) The Water Management component proved to be marginal to the needs of System B during the project period. (4) The Farmer Services component completed 17 export market studies, about half of which were followed by trial shipments, most of which have would have led to commercial orders had Sri Lankan exporters been able to handle larger quantities. The project also identified commercial nucleus farms as a means for linking exporters and small farm producers, and worked with the Mahaweli Enterprise Development Project to attract private investors into System B, including an investor of a refrigerated packhouse that was critical to establishing a cold chain for System B fruits and vegetables. The high point of this activity occurred in 1992, when the owner of the packhouse entered into 42 buy-back contracts with farmer organizations. After this year, however, targets of opportunity declined, and efforts to increase production for export and to attract private investors proved disappointing on the whole, although recent proposals show that exporters are aware of System B as a source of fruits and vegetables. (5) After the Mahaweli Downstream Support (MDS) construction project was discontinued in 1992 for security reasons, MARD"s Infrastructure Development component undertook the construction and rehabilitation of D-canals and drainage canals in the already settled areas of System B. Despite delays caused by the budget problems of the Mahaweli Engineering and Construction Agency (MECA), MARD was able to construct 70 km of D-canals, 20 km of drainage canals, and 10 km of access roads. This opened up 300 ha of new irrigated lands and increased productivity on 4,000 ha suffering from poor drainage. All this is only a beginning, however; many more steps are needed if the progress made thus far is not to be reversed. To this end, the report makes a series of specific recommendations regarding crop diversification, production for export, and farmer organizations. Several important lessons were learned. (1) Diversification has not proceeded at the level anticipated in the project design, mostly because of labor requirements. The combination of uncertain demand in OC markets and low profit margins makes most farmers unwilling to take the financial risk of hiring laborers for OC production. Even the most progressive System B farmers grow only what they can cultivate with their own family labor. (2) Getting farmers to grow export quality products under contract proved to be the easiest part of introducing export agriculture into System B. The difficult part was attracting exporters and investors into the area. (3) The project succeeded in establishing effective farmer organizations because it provided farmers with reasons to organize. These reasons included the necessity of taking over D-canal O&M from the MEA and the income derived from the commercial activities, which give farmer organizations the economic base that makes sustainability possible.