Local economic development in Sri Lanka

Peace, prosperity and papayas

Her papaya crop is paying off for a widowed farmer helped by the ILO-supported LEED program, which has boosted business in fisheries, construction and agriculture.

Feature | Bangkok, Thailand | 02 February 2015
KILINOCHCHI, Sri Lanka (ILO News) – The start of the rainy season in northern Sri Lanka brought Vadiveel Selvarathy a new, and richer, harvest. The papaya fruits on her quarter-acre farm started to take on their curved shape. When fully ripe they turn the reddish colour that gives the variety its name, “Red Lady”.

“Growing papaya has brought us so much more benefits than growing other crops,” Selvarathy said. “Now I can buy whatever I want. I have confidence for my life.”

Selvarathy’s husband was killed in the civil war. When the fighting ended, in 2009, she took her three children back to her village, hoping to rebuild a normal life. But the roof of her house had gone and her fields had become a bleak wilderness. Looking for a future, she copied many of her neighbours and started to grow onions. But before long she found she couldn’t sell her crop – the market was flooded with onions. Despairing farmers began to dump their vegetables.

“We were shocked to see farmers dumping their harvest on the road; eggplants, long beans and onions. They couldn’t find the market for the vegetables and they’d rather throw them away than sell them at far lower prices,” recalls Nihal Devagiri, National Programme Coordinator of the International Labour Organization. “This consolidated ILO’s determination to help them.”

LEED builds partnerships

In the north of Sri Lanka, 30 years of civil war and isolation destroyed infrastructure, technical skills and market systems. In response, the ILO Office in Sri Lanka, with the support of the Australian government, launched the Local Empowerment through Economic Development (LEED) project in 2011. LEED focused on supporting four economic sectors in the war-torn north; paddies, fisheries and agriculture, fruit and vegetables, and construction.

A key part of LEED’s different approach was building partnerships between the private sector in the south and the farmers in the north. For the papaya project, the ILO brought together CR Export (Pvt) Ltd, a leading Colombo-based fruit exporter, and the Vanuniya North Fruit Growers Co-operative, to form North South Fruit Processors Ltd.

The 200 farmers in the co-operative grow papaya and the joint venture company buys the fruit at a fixed price. The papaya is then packed in a processing factory and shipped to the Middle East where the Red Lady is loved by local consumers.

Since 2012 more than 1.3 million kilos of papaya have been produced and the co-operative has earned 36 million Sri Lankan Rupees (USD 280,000). Selvarathy makes about 40,000 Sri Lankan Rupees (USD 300) a month. “The company comes to collect the fruits every week and in the following week I will get the payment in my bank account,” she said.

Fruits of regular income

Thanks to this regular income stream the 44-year-old widow and her family have seen many improvements to their lives. Her house is equipped with a TV, fridge, hi-fi system and telephone. Recently she bought a motorbike for her younger son and she has plans to send her 15-year-old daughter to a boarding school in town.

The CR Export (Pvt) Ltd also benefitted from the partnership. Agreeing a fixed price with the farmers allowed the company to mitigate some business risks. Chairman Upali Ranasinghe says the north-south cooperation has been going smoothly. “The ILO should be there at least for another two or three years because the farmers can get the knowledge regarding the solutions to problems,” he said. “I’m very happy the ILO officers are very efficient on these matters.”

“The beauty of the LEED project is to build partnerships that bridge the north and the south, that connect the producers and the market and network the public sector and the private sector,” said Donglin Li, the ILO Country Director of Sri Lanka.

The beauty of the LEED project is to build partnerships that bridge the north and the south, that connect the producers and the market and network the public sector and the private sector."

Li Donglin, ILO Country Director of Sri Lanka
The systems and principles that have been successful in the papaya fields have also been applied in other sectors. Sri Lanka’s Northern Province is famous for Blue Swimming Crab. A large number of people are employed in the fisheries sector, however the war destroyed boats and other fishing infrastructure. Replacing this equipment was expensive because the area is comparatively remote.

Boosting boat builders

The ILO approached Neil Marine Ltd, a boat manufacturing company in Colombo, who agreed to train boat builders and provide advisory and mentoring services that would support the building of a local boatyard.The yard opened in May 2012 and since then 175 boats have been launched, enough to not only meet local demand but to sell to neighboring areas.

The boatyard scheme also included preferential terms for fishermen to help them buy new craft. Peter Rajan is one of those who benefited. “I bought the boat with a 50 per cent grant from the ILO and 50 per cent on a credit scheme. I can go fishing more efficiently because I have the boat.”

Joseph Francis, President of Fishermen Co-operative Societies Union, described the boatyard as “a gift from God”.

The LEED approach has also ensured that when the fishermen return with their crabs, they don’t need to worry about sales. A crab processing company has been set up next to the beach, and buys all their catch.

“’I’m delighted to see the livelihoods of people in the north improving through our efforts,” said Donglin Li. “It’s also very gratifying to know that the Sri Lankan Government has started to replicate the project elsewhere, to benefit more people. I believe this approach can take root, sprout, blossom and bear fruit across the country.”