MoU to take EPVs to international markets

• 2 State Ministries to ink MoU for Govt. project 
• Trade Ministry to tap existing agri, fisheries and services sectors
• Aims to help low-skilled groups obtain additional income
• Plans to set up agreements with top export companies

Cabinet this week gave approval for two State Ministries to ink a memorandum of understanding (MoU) to take forward a Government project to link selected Export Production Villages (EPVs) with international markets. 

Accordingly, the Cabinet of Ministers approved the proposal tabled by Foreign Affairs Minister Dinesh Gunawardena to enter into a MoU between the State Ministry of Samurdhi, Home Economy, Micro Finance, Self-Employment and Business Development and the State Ministry of Regional Cooperation. The MoU will seek to implement the project ‘Linking Sri Lankan Villages with the International Market’, through an institutional network that can build a mechanism which covers all districts of the country. 

The MoU follows an earlier Cabinet decision given in November 2020 for a national program to establish EPVs that will include linking up existing agriculture, fisheries and services sectors to export companies. 

The Cabinet of Ministers approved a proposal presented by Trade Minister Bandula Gunawardena to implement the EPV program. This program will have the dual goal of developing rural production within a formal enterprise model and link those with the export supply chain, as well as to upgrade local production industries as import replacements. 

“The Government aims to establish cluster villages making similar products for export and provide opportunities for them to be exposed to the market as well as provide opportunities and support for the producers to minimise the issues they may face when starting a formal business or exporting goods,” the Government Information Department said in a statement. 

Furthermore, it has been planned to establish EPVs covering agricultural, fisheries, mechanical and services sectors so they will have a sustainable additional income by entering into future trade agreements with top-level export companies. 

Accordingly, the Cabinet of Ministers conceptually approved the resolution furnished by the Minister of Trade for implementing the proposed program utilising the required allocations from the Sri Lanka Export Development Board subject to the guidance of the Ministry of Trade.

The EPV program was initiated in 1980 under the Ministry of Trade. The major objective of the program was to create employment and enhance the income and standard of living of the rural people in addition to encouraging foreign exchange earnings. However, despite multiple attempts, it has yielded limited results.

The core idea of the major strategy of the EPV program is to organise production in villages directly for the export market. Under this program, it was expected to start production based on advanced and secure marketing arrangements, such as supply contracts for specific products at pre-agreed prices. 

The products were expected to be directly purchased by export companies. The avoidance of involvement of intermediaries in the process of marketing was expected to bring about higher prices and more benefits for the producers.

The EPV program was expanded and became more popular by the late 1980s. EPV companies functioning in a number of districts were based on a wide range of products, rather than on agricultural products alone.