Equitable development

MICROFINANCE loans are an important tool to returning the development-denied areas of the north and east to better standards of growth. The loans that are disbursed mostly by State banks under the monitoring of the Central Bank have gone a long way to addressing poverty. However, there are still pockets that have suffered from the floods and need assistance of a different form from the authorities.

For example, Batticaloa is slowly getting itself afloat after the floods but the damage is still extensive. The next step for most of these resilient people is to get their Yala harvest on target and for that there is still a grave need for assistance. Many opine that the loans taken need to have their repayment rescheduled as many are not financially stable enough to pay them according to the originally agreed dates and give special loans for the Yala seasons.  

The Socio Economic and Planning Centre of the Department of  Agriculture in its recent crop forecast released in February  stated that the cultivation progress of paddy up to end January of this year is 777,260 hectares, which is 95 per cent achievement of target. They noted that 205,000 hectares, which is approximately 26 per cent of the cultivated paddy land, had been damaged due to the floods. Batticaloa before the floods produced 6% of the total paddy requirement of the country.

The department also noted that the expected production loss due to flood damage is about 0.75 million metric tonnes, which is about 24.5 per cent and the revised production forecast for the season is 2.3 million metric tonnes. Agriculture authorities also point out that due to the floods, 70,000 acres in Batticaloa have been filled with sand and have to be scrapped off permanently.

The other major flood affected Districts include Trincomalee, Kilinochchi, Ampara, Vavuniya, Anuradhapura and Mahaweli System B. However, the targets with regard to paddy have exceeded in the districts of Galle, Kurunegala, Anuradhapura and other Mahaweli systems. This means that the adverse effects by floods can be counterbalanced without a national shortage. However, these people still need assistance and it is important that the Central Bank together with the other banks consider a process that will take into account the hardships faced by farmers.

Some of the loans provided for north eastern farmers are titled ‘Prabodhini,’ ‘Sarusara’ and ‘Pibidena Uthara’ and have had significant success. These loan schemes were initiated in the north and east during 2007. To date 30,978 farmers have benefited from these loans; of this 10,218 small enterprises have benefited, in addition to 21,000 other persons.

‘Prabodhini’ was initiated in the Southern Province and was gradually introduced to the north and east, with over 24,300 persons benefiting. During 2010 and 2011, 12,000 farmers in the north and east took advantage of the ‘Sarusara’ loan scheme of the Central Bank, while ‘Prabodhini’ now has about 9,007 members under its loan scheme. To date, the Central Bank has provided a total of Rs. 799 million in terms of loans provided for the people in the north and east of the country.

With the increased financial aid, the farmers in the north and east have managed to improve their agricultural activities and during the last few months, Jaffna red onions, bananas and green chillies were brought to the Dambulla, Colombo and Meegoda Economic Centres and helped control some of the agricultural produce prices in the country.

In total there are 20,364 persons in the north and east benefiting from these loans and a total of Rs. 2,176 million have been utilised for this cause. Clearly much has been done, but ensuring that farmers don’t fall through the cracks is also important.