Business

Food Security in the BIMSTEC Region: Lessons from Sri Lanka’s Smart Farmingax

Published

4 years ago

2022/04/9

By Dr Manoj Thibbotuwawa

Sri Lanka is hosted the fifth Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) summit on 30 March 2022. Established in 1997, BIMSTEC is a seven-member regional organisation comprising Bangladesh, Bhutan, India, Nepal, Myanmar, Sri Lanka, and Thailand. BIMSTEC pays significant attention to agriculture and food security, with agriculture included as a stand-alone sector in 2005 in recognition of its importance. Sri Lanka, the lead country for the coordination of activities in the Science, Technology and Innovation Sector, is in the midst of a food crisis even as it plays host. Against this backdrop, this blog discusses food security challenges in the BIMSTEC region, Sri Lanka’s experiences in smart farming, and its expectations from the summit.

Food Security Challenges in

the BIMSTEC Region

BIMSTEC’s growing population is exerting tremendous pressure on the agriculture sector and food security. The need is to find ways to enhance agricultural growth to meet the present and future demand for food, but achieving this goal is complicated due to the region’s numerous inherited challenges. These include the inefficient use of inputs such as water and fertiliser, poor technologies, lack of market integration leading to stagnating crop yields, declining profitability, and the deteriorating value of food production in these countries.

The BIMSTEC region remains among the poorest in the world, with lower per capita GDPs and higher Poverty Headcount Ratios. Nepal, Myanmar, India, and Bangladesh have a per capita GDP of less than USD 2,000 and a poverty headcount ratio of over 21%. Climate change, inconsistent domestic and trade policies, and weakened agricultural institutions are further aggravating the aforesaid challenges on food availability and access to food mainly for vulnerable populations including smallholder farmers and poor households.

Food utilisation is also not optimal, as shown in the FAO nutrition indicators for the region. For example, the stunting rate is the highest in India (30.9%), followed by Bangladesh (30.4%) and Nepal (30.2%). Even Myanmar (25.2%) and Bhutan (22.4%) have higher stunting rates than the world average of 22%. Another indicator of malnutrition, wasting, is highest in India (17.3%), followed by Sri Lanka (15%) and Bangladesh (10%), and these figures have not improved much over the years.

Moreover, a significant share of the population suffers from other malnutrition indicators like low birth weight and undernourishment. In addition, the COVID-19 pandemic is likely to cause a reversal of whatever achievements have been made so far by BIMSTEC countries in terms of food security. Crucially though, the continued implementation of smart farming in agriculture can help mitigate some of these food security problems experienced in the region.

Sri Lanka began its gradual push towards smart farming with its E-agriculture Strategy in 2016 which was the first in the Asia Pacific. This was motivated primarily by the belief that several opportunities exist through innovative Information Communication Technology (ICT) solutions to address numerous challenges to food security. In particular, access to the right information at the right time enables farmers to make informed decisions and improve their livelihoods, thereby playing a major role in ensuring food security. The country also has a vibrant ICT sector with wide adoption and awareness of ICTs in other critical areas such as telecom and banking which provided the transformative potential for agriculture stakeholders. The rapid growth of mobile voice and the internet in Sri Lanka also provided new avenues to share and access information.

A Public-Private-Producer partnership has been identified as one of the key strategic development areas to achieve the E-agriculture Strategy in Sri Lanka. With the content support from the Ministry of Agriculture and the Ministry of Health, private telecommunications service provider Dialog’s Govi Mithuru offers customised and timely advice to farmers on land preparation, cultivation, crop protection, harvest and improved family nutrition. Dialog is now looking at digitising the leaf colour index, helping farmers check the nutrition status and deficiencies of plants and developing Internet of Things (IoT) enabled automation tools for the agricultural sector.

Govipola is a trilingual mobile phone app and web-based programme which allows farmers, buyers and sellers to access prices. The European Union’s Technical Assistance to the Modernization of Agriculture Programme (TAMAP) assisted the Mahaweli Authority of Sri Lanka (MASL) to launch a pilot ‘Smart Farming Village’ programme while training MASL staff, vendors and farmers in the use of digital apps with an extensive outreach and communication plan by partnering private sector Digital Service Providers and transport services such as PickMe.

Sri Lanka’s large agribusiness companies such as Chemical Industries Colombo (CIC) and Hayleys are increasingly using the latest innovation to provide crop application requirements to suit the local conditions from the Department of Agriculture and relevant research institutions. These include drones for scanning fields and distributing agrochemicals and fertiliser with minimum human involvement and wastage and cutting-edge greenhouse technology, such as automated climate control and fertigation as well as hydroponics to enable “climate smart,” year-round production. Building upon Sri Lanka’s unique experience, the BIMSTEC region can strengthen science, innovation, and technological cooperation in agriculture to mitigate food security challenges.

Way Forward

Given that the agricultural sector research and development (R&D) is very low, and the agriculture and food processing sectors continue to use outdated technologies and inefficient manufacturing techniques, the region needs more innovation to boost its global competitiveness, harness its knowledge base, enhance its economic position, and tackle the food security challenges. However, rising protectionism in technology and intellectual property rights (IPR) markets has made the acquisition of advanced technologies a severe challenge to developing countries in the region.

Therefore, South-South Cooperation (SSC), like BIMSTEC, provides a good platform to govern technology transfer among BIMSTEC economies. Similar factor endowments such as land, labour, capital, entrepreneurship in the region can mutually contribute to addressing regional developmental needs, including rural income generation, poverty alleviation and food security. Moreover, technologies and knowledge pools available in these countries are more cost-effective and easily and swiftly adaptable to the prevailing conditions in these countries.

As decided during the 17th BIMSTEC Ministerial Meeting in 2021, Sri Lanka must take the necessary steps to establish an Expert Group on Technology to coordinate cooperation in the technology sub-sector and to develop a Plan of Action to strengthen cooperation in technology, including in agriculture and food processing sectors. Further, establishing a regional network of Technology Transfer Offices of major research organisations like the European Technology Transfer Offices Circle will ensure efficient and effective scientific and technological exchanges, sharing technological know-how, joint R&D, and industrial application of higher technology. Finally, local industries could increasingly harness more benefits through participation in regional value chains (RVCs) and global value chains (GVCs).

Link to the full Talking Economics blog: https://www.ips.lk/talkingeconomics/2022/03/29/food-security-in-the-bimstec-region-lessons-from-sri-lankas-smart-farming/

Manoj Thibbotuwawa is a Research Fellow at IPS with research interests in agriculture, agribusiness value chains, food security, and environmental and natural resource economics. He holds a BSc (Agriculture) with Honours from the University of Peradeniya, an MSc (Agricultural Economics) from the Post-Graduate Institute of Agriculture at the University of Peradeniya, and a PhD from the University of Western Australia. (Talk with Manoj – manoj@ips.lk)

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Business

LOLC Finance reinforces market leadership with strong growth

Published

12 hours ago

2026/06/2

Sahan Weerasooriya

LOLC Finance PLC, the flagship finance company of the LOLC Group and Sri Lanka’s largest non-bank financial institution, delivered a strong financial performance for the year ended 31 March 2026, supported by robust lending growth, stronger recurring income, improved asset quality and a capital position that remained comfortably above regulatory requirements.

The Company reported profit after tax of Rs. 27.4 billion for the year, compared with Rs. 25 billion in the previous year. At headline level, this represents growth of around 9%. However, the headline comparison does not fully capture the improvement in the Company’s underlying performance.

The previous year’s profit included significant non-recurring gains linked to Sri Lanka sovereign bond-related impairment reversals, partially offset by a derecognition loss. On a net basis, these one-off items added approximately Rs. 4 billion to the prior year result. Adjusting for this, the prior year’s underlying profit base was closer to Rs. 21 billion. Against that adjusted base, the current year profit of approximately Rs. 27 billion reflects underlying profitability growth of close to 30%.

This is the more important message behind the numbers. LOLC Finance did not merely preserve profitability in a recovering economic environment; it expanded its recurring earnings base materially, while simultaneously growing its balance sheet and improving key credit quality indicators.

The improvement was driven primarily by core income. Interest income increased to approximately Rs. 79 billion, supported by strong expansion in the lending portfolio. Interest expense rose at a slower pace to approximately Rs. 29 billion, allowing net interest income to grow to approximately Rs. 50 billion. This demonstrates the Company’s ability to expand its loan book while maintaining control over funding costs.

Net fee and commission income also improved, rising to approximately Rs. 3 billion, reflecting higher business volumes and broader customer activity. Total operating income increased to approximately Rs. 56 billion, despite the absence of the large sovereign bond-related gains that benefited the previous year. This shift from one-off gains to recurring operating income is a clear positive from an earnings-quality perspective.

The balance sheet story was equally significant. Total assets grew by approximately Rs. 129 billion during the year, reaching around Rs. 559 billion as at 31 March 2026. The main driver of this expansion was the lending portfolio, with gross loans and advances increasing from approximately Rs. 305 billion to approximately Rs. 423 billion, representing growth of nearly 39%.

This level of loan book expansion is notable not only because of its scale, but also because it was spread across multiple product categories. Growth was recorded across key lending lines including finance leases, gold loans, speed drafts, alternate finance, personal loans and term loans. This points to a broad-based recovery in customer demand rather than growth concentrated in a single product line.

Business

‘Law enforcement failures leading to gross abuse of Malaiyaha Tamil labour’

Published

13 hours ago

2026/06/2

Sahan Weerasooriya

Tea estate workers expending their labour in Sri Lanka’s hill country. (File photo)

Malaiyaha Tamil workers in Sri Lanka’s private tea estates and smallholdings are facing widespread labour abuses that amount to multiple indicators of forced labour, according to a new report released last week by Amnesty International.

‘The Sri Lankan government is urged to strengthen labour protections, improve enforcement mechanisms and remove barriers that prevent Malaiyaha Tamil workers from accessing their rights under both domestic law and international obligations, a media release on the report explained.

‘Workers are being subjected to intimidation, physical violence, harassment, debt bondage, restrictions on movements, wage withholding and severely poor living and working conditions, the release added.

Some extracts from the release:

‘The research focused on tea estates in Sri Lanka’s Southern Province, particularly in the Galle and Matara Districts. It is based on visits to 45 estates conducted between January 2024 and January 2026, alongside 159 interviews with workers, discussions with Estate Managers and Supervisors, and 15 focus group discussions involving 65 workers. Across all sites, researchers found what they describe as a consistent pattern of exploitation and discrimination affecting Malaiyaha Tamil workers.

‘Workers reported being forced to meet unrealistic daily tea-picking targets, often set at more than 25 kilograms per day. Failure to meet these targets reportedly resulted in wage deductions, delays, or reduced pay, sometimes bringing daily earnings down to as little as LKR 1,000 (around USD 3.10). Workers also described a cycle of wage advances and loans that left them increasingly indebted to estate owners, raising concerns about debt bondage in the plantation sector.

‘Several workers also told researchers they had experienced or witnessed verbal and physical abuse by estate managers, particularly when they were late for work, questioned unpaid wages, or failed to meet production targets. One worker described being beaten with hands, legs, and sticks, and said such violence was still occurring. Others reported that wages were often withheld or manipulated based on arbitrary assessments of productivity.

‘Employers frequently classify them as “casual workers,” which denies them access to maternity benefits, pensions, sickness leave, and other statutory entitlements. The report also notes that trade union representation is largely absent in the Estates surveyed, leaving workers with little collective bargaining power or protection against abuse. According to the report, workers face multiple barriers in accessing justice, including language barriers, discriminatory treatment by officials, lack of documentation, and weak labour inspection mechanisms. These factors, the report says, prevent effective enforcement of labour laws and allow abusive practices to continue largely unchecked.

‘Smriti Singh, Regional Director for South Asia at Amnesty International, said the findings reflect systematic violations of labour laws and a failure of enforcement by the state. She said, private tea estates are operating with little accountability and that the pattern of abuse raises serious concerns about forced labour.’

By Hiran H. Seneviratne

Business

West Asian uncertainties continuing to dampen share trading

Published

13 hours ago

2026/06/2

Sahan Weerasooriya

Low investor sentiment persisted in the stock market yesterday due to lingering West Asian uncertainties particularly in relation to Israel and Lebanon.

Both indices moved downwards. The All Share Price Index went down by 48.78 points, while the S and P SL20 declined by 7.46 points. Turnover stood at Rs 1.67 billion with two crossings.

Those crossings were; HNB crossed 185718 shares to the tune of Rs 73.4 million; its shares traded at Rs 395 and Dialog Axiata 1 million shares crossed for Rs 44 million; its shares traded at Rs 44.

In the retail market companies that mainly contributed to the turnover were: RIL Properties Rs 148 million (5.3 million shares traded), Dialog Rs 108 million (2.4 million shares traded), Aitken Spence Rs 74.4 million (542,100 shares traded), LB Finance Rs 72.2 million (7.3 million shares traded), Royal Ceramics Rs 67.2 million (1.4 million shares traded), Renuka Agri Foods Rs 64.8 million (5.2 million shares traded) and JKH Rs 53.7 million (2.7 million shares traded). During the day 71 million shares volumes changed hands in 23582 transactions.

It is said that banking sector counters, especially HNB, performed well while the real estate sector stocks, especially RIL Properties, performed well. An overall mixed performance was noted in most of other sectors, especially finance and agriculture.

Yesterday the rupee was quoted at Rs 330.00/332.00 to the US dollar in the spot market, from 331.00/332.00 Friday, dealers said, while bond yields were flat.

By Hiran H Senewiratne