The signing of the Memorandum of Understanding (MoU) for the provision of interest-free loans to agribusiness entrepreneurs and farmers under the first phase of the Agriculture Modernization Program took place today (22) at the Presidential Secretariat.

The MoUs were signed between the Bank of Ceylon, the Regional Development Bank who are the key contributors to the initial phase and Secretary to the Ministry of Agriculture and Plantation Industry Janaka Dharmakeerthi. Accordingly, MoU with the People’s Bank are expected to be signed in the near future.

In this first phase, Rs. 650 million has been allocated to implement projects through agricultural modernization centres in 26 Divisional Secretariat Divisions selected for the pilot projects. [a total of 75 DS divisions identified]

In the implementation of agricultural modernization projects within the DS divisions, more than 30% of the project costs are covered by agribusiness entrepreneurs and farmers, with the remaining 70% funded by the government.

To facilitate a revolving credit scheme, the government’s contribution, provided as an interest-free loan under the Agricultural Modernization Credit Scheme, can be recovered by a bank selected by the beneficiary from among the Bank of Ceylon (BoC), People’s Bank, and Regional Development Bank (RDB). A cabinet memorandum presented by President Ranil Wickremesinghe to establish and implement this system has been approved.

As a result, for selected and approved projects, interest-free loans will be paid to agribusiness entrepreneurs from funds deposited in an account in the name of the Secretary of the Ministry of Agriculture and Plantation at the Head Office of the Bank of Ceylon. Beneficiaries can choose between the Bank of Ceylon, People’s Bank, and the Regional Development Bank for their loan processing.

The loan concession period is up to 6 months, with a maximum repayment period of 5 years, including the concession period. The agriculture modernization centres determine the specific concession and repayment periods based on the loan amount and the nature of the project undertaken by the farmers or agribusiness entrepreneurs.

Commenting on the scheme, Agriculture and Plantation Industry Ministry Secretary Janaka Dharmakeerthi emphasized the need to shift towards production-oriented programs.

“We need to transform to production-oriented programs even now. Through this agreement, we aim to identify and support categories with production potential, providing them with the necessary facilities and transforming them into initiatives that will boost production in the future.

So far, we have tried to help people and increase production, but we have not yet reached our goal. Success is possible only if production is increased. We believe that the agricultural modernization program will lead to significant achievements. This program is crucial for reaching our long-term goals. Therefore, as a ministry, we are fully committed to supporting this initiative,” the Secretary explained.

Presidential Senior Adviser on Economic Affairs, Dr. R.H.S. Samaratunga,

The agricultural modernization program has been highlighted in two budgets presented by President Ranil Wickremesinghe. The agreement signed today marks a crucial step for its advancement. One of the program’s objectives is to allocate previously unused land to local entrepreneurs, fostering the development of export-oriented agriculture and establishing a commercial agriculture sector driven by local entrepreneurs.

Presidential Adviser on the Agriculture Modernization Project, Senior Prof. Gamini Senanayake, Senior Additional Secretary to the President (Agricultural Productivity and Land), Chandra Herath, Director (Agricultural Productivity and Land) A.A.C. Nilantha Perera, BoC Deputy General Manager R.M.N. Jeevantha, RDB Chief Executive Officer/ General Manager (Acting) E.A.D. Janitha Priyashantha and several other officials were present at the event.