The government will continue to provide the input subsidy scheme for the agriculture sector to encourage the farmer community and ensure the growth of the sector.
The government has long term plans for the development of the agricultural sector and will continue with the fertilizer subsidy scheme and other facilities. It will also provide cultivation loans at a subsidised rate of interest as proposed in the 2017 Budget while continuing the input subsidy scheme, Ministry of Finance, Department of Development Finance, Director General A.M.P.M.B. Atapattu said.
Rice mill owners who take measures to increase production capacity will be given loans at an interest rate, 50 percent less than the prevailing market rate, he said.
Agro-based industries are given an interest rate subsidy of 75 percent. This scheme is for farmers to purchase equipment to increase production and productivity.
“With all these facilities in place, farmers may be able to double the yield and thereby reduce the cost of production which will benefit the value chain. In many cases, farmers do not make use of extension services. There is an out-grower system where up to 10,000 growers and 20,000 acres of land cultivation qualify to receive quality seeds and extension services,” he said.
Loans to purchase equipment for the mechanization of production will also receive an interest rate subsidy of 50 percent.
The agricultural sector’s turning points are farmer profitability, improved production, and increased productivity. The government hopes to make the country self-sufficient in maize, soya bean, potato, Bombay onion and chillie production and minimize the drain of foreign exchange, he said. The government also has in place a warehouse concept to provide quality storage facilities to the farmers during the harvesting period. Farmers usually sell their produce at the prevailing market price during the harvesting period.
Under the warehouse concept, the farmer brings his produce to the warehouse and he is able to obtain a loan of up to 50 percent of the value of the produce. When market prices go up the produce will be sold in the market and farmers will be able to settle their dues.
There are two warehouses already in operation in Galenbindunuwewa in Anuradhapura and Buttala in Monaragala. Another warehouse will be opened in Mannar this month.
There is also a program to provide cold room facilities to farmers. There are two cold rooms with processing facilities being built in Welimada and Dambulla. These facilities will enable the produce to be released to the market when prices are high.
There is a mis-match in supply and demand during the harvesting period and both farmers and consumers are the losers as prices are unstable. The setting up of warehouses and cold room facilities will enable farmers to obtain profitable prices and consumers, affordable prices, he said. Realizing the importance of cold room facilities, the Government proposed under the 2017 Budget, to set up three cold rooms in Nuwara Eliya, Embilipitiya and Thambuththegama under private-public partnership, he said.