MPCS

1
Paddy Sector Supply Chain- Ampara
MPCS
Govt / Coop
Seeds production
Whole Seller
Retail seller
Consumer (most in Sri Lanka and a little bit
exported)
Farmers
Whole Seller
Mudalali / Middle man
Market
Mill owners
Local Market/ Shops
Retailer / Middleman
Biscuits factory in Colombo 10 Rupees/kg
Rice bran
Govt
Livestock Poultry 8 Rupees/kg
Broken rice
Poor people
2
Activities by Supply chain participants

• Farmer
• Producing
• Separate in to different classes
• Transporting
• Mudhalali / Middle man
• Financial Assistance
• Supply of Inputs
• Transportation
• Purchasing immediately
• Separate in to different classes
• Whole Seller
• Financial Assistance
• Supply Inputs
• Purchase

• Mill Owners
• Separate in to different quality
• Bagging
• Store
• Transportation
• Fixing price
• Whole Seller / Retail Seller
• Bagging for smaller buyers
• Quality
• Transportation
• Store

3
Scarcity of casual labour especially after tsunami
Market Environment
Low level of mechanization which leads to high
percentage of post-harvest losses
Seasonality in farmers livelihoods No regular
income throughout the year
Double taxation in unclear areas
Lack of technical knowledge of farmers (misuse of
fertilizer and pesticide
Scarcity of natural resources Land available but
limited access due to the conflict Water (low
rainfall)
Paddy price subject to political manipulation
(paddy price recently increase before the
elections to gain farmers political support
Disaster Tsunami Salinitation, crop
lost Droughts yearly Floods yearly Pests
Elephants, insects, diseases
Ethnic tension Tamil community more restricted
access to mainstream Singhalese society e.g.
Ampara market Muslims go everywhere Singhalese
main community in country
Agricultural inputs and fuel prices tend to
increase due to the international energy crisis
Poor government structure due to ethnic conflict
Poor access roads No electricity supply No water
supply
Rice distributions by welfare service WFP VGF
programme (Sometimes good/ sometimes bad for
farmers)
Red rice fetches high prices and also exported
to Sri Lankan communities abroad
Government ban on rice imports
4
Traditional Farmer cannot benefit from assistance
of the Dept. of Agriculture because they are
not registered and because they dont buy
agriculture inputs with cash
Market Services
Weak farmer organizations
Poor Government extension services Low coverage
by NGOs No training centers
Transport provided by middlemen
No access to irrigation. Lack of maintenance of
tanks
No insurance for farmers/harvest
No Storage facilities
Paddy marketing board not functioning due to
conflict They had big storage facilities
Low access to credit Banks only for the
rich Farmers get credit from MFI, Mudalalis
Lack Quality Seeds, fertilizer, pesticide
During peak periods there is scarcity of
machinery and when available it is expensive
(High fuel prices)
Market prices dictated by rice mill/ middle men
Traditional Farmer get cheated on the weight of
their production by the middlemen who has the
scale
5
Paddy seeds market
Commercial farmers that have more than 5 acres f
land Combined harvester They are registered in
the Department of Agriculture Because of being
registered they benefit from tsunami aid from
FAO and NGOs Registered farmers also have
insurance for their crops and credit from banks
CIC sells good quality certified paddy seeds
that are expensive
Get seeds from own harvest
Registered farmers are increasingly using
combined harvesters and the grains are not
fertile
Buy paddy rice from registered farmers and use
it as seeds
Small scale farmer
Department of Agriculture also provides seeds
Less availability of seed for the small farmer
Retailers that sell agricultural inputs also
provide seed
6
Vulnerable groups identified

• In the market chain the poor group that has
  limited access (and power) to markets is the
  paddy producers/ farmers.
• Their vulnerability is mostly due to the
  following reasons
• Low production due to limited access to water/
  land
• Most farmers only grow paddy during the Maha
  season. With the appropriate irrigation
  facilities they could grow also paddy in the Yala
  season when yields are highest.
• Limited access to land due to the conflict
• Low technical skills (fertilization, pesticide
  application) and weak extension services from
  Government and NGOs.
• Limited access to credit for agricultural
  production. Credit from Mudalali has very unfair
  conditions for farmers
• Limited access to good quality agricultural
  inputs
• High post-harvest losses due to limited access to
  mechanized agricultural implements

7
Goal Activities

• Improve Livelihoods of farmers through increased
  production of higher quality
• Strengthen farmers associations to provide
  agricultural inputs of good quality and credit
  facilities (reduce dependency on Mudalali)
• Provide training for better use of inputs
  Integrated nutrient and pest management
• Construction of irrigation facilities and
  rehabilitation/ upgrading of existing one
• Provide training machinery for harvesting and
  reduce post-harvest losses as well as get a
  product of uniform quality
• Try that furthers meet the quality standards
  already set by the Sri Lankan Government.
• Improve access to markets of farmers
• Road rehabilitation
• Provide storage facilities and transport
• Market information
• Improve quality of paddy produced and reduce
  post-harvest losses
• Diversification of livelihoods options
• Create/strengthen alternative sources of income
  in the off-season
• Create alternative/ secondary income sources for
  women

8
Goal Activities

• Capacity building of Farmers Associations
• Assessment to understand why inactive
• Understand management of the FO (committees,
  internal rules regulations, etc)
• Establish common objectives for all members
• Leadership training
• Good bookkeeping / support form the outside
  auditing companies / private sector
• Accountability / transparency. Inculcate good
  values
• Provide them with financial management training
• Savings system for farmers. Establish credit
  service
• Active in marketing of rice from farmers Set up
  standards of quality for paddy, provide
  information on paddy/ rice prices, storage
  facilities, transport
• Possible link with CIC for quality seed
  production and provision of agricultural inputs.

9
Policy Issues

• Access to land? (through empowerment of people)
• Registration of poor farmers/ Insurance/ pension
  scheme?
• Lobby the Government to keep the ban on rice
  imports (WB is lobbying for the government to
  withdraw the ban on rice imports)

10
Areas that need further information

• Prices of paddy/ rice and rice bran along the
  market chain (also price of different rice
  qualities and varieties)
• Farmers Organizations SWOT analysis of this
  organizations and what kind of partnership we can
  have with them for the implementation of our
  programme.
• Assessment of irrigation infrastructure that
  needs to be constructed/rehabilitated so that we
  can make a budget for this activity.