Budget 2025 announces slew of measures to boost broader agriculture sector

The 2025 Budget presented by President and Finance Minister Anura Kumara Dissanayake yesterday contained a slew of measures to boost the broader agriculture sector. 

The President said the agriculture sector provides employment to approximately 30% of the country’s labour force and is the backbone of the rural economy. Therefore, enhancing the potential of the agriculture sector is a key requirement in terms of improving economic opportunities for the vast majority of Sri Lankans. 

In his Budget 2025 presentation, the President also said the following.

The Government policy on agriculture sector is aimed at increasing its productivity, competitiveness, and resilience. The fertiliser subsidy for paddy farmers will be continued, for which the Government has already allocated Rs. 35 billion for 2025. The development of quality seeds, cascade management, and efficient use of water in agriculture has been identified as priority areas and are expected to be supported by the budgetary allocation.

• Maintaining a healthy buffer stock: A sufficient buffer stock starting from Maha 2024/25 is proposed to be maintained as a resilience measure to bridge the demand and supply of rice in the market while avoiding haphazard price volatility. We propose to allocate Rs. 5 billion for this purpose for Maha 2024/25.
• Information system: The agriculture sector lacks a sound data and information system for timely decision-making. Therefore, action will be taken to establish a sound data and information system covering the entire value chain, from the point of production up to the point of consumption, under the ongoing Asian Development Bank-funded “Food Security Livelihood Emergency Assistance Project” and will be expanded with the funds coming from the new World Bank project – the “Integrated Rurban Development and Climate Resilience Project.”
• Production increase of Other Field Crops (OFCs): In addition to paddy, the production of green gram, black gram, chilli, red-onion, cowpea, soya, maize, potatoes, and other selected cereals, as well as tuber crops, will be increased through an accelerated program over the medium term 2025-2027. For this purpose, we propose to allocate Rs. 500 million for 2025, in addition to the funds given for the Agriculture Ministry for 2025. 

It is appropriate to develop a regulatory framework to regulate the collection and storage of paddy and rice stock in the market. Accordingly, it is proposed to amend the Paddy Marketing Board Act for vesting the powers with them to regulate the collection and storage of paddy and rice.

Bringing land into production 

Some of the lands presently managed by LRC, RPCs, SLSPC, and JEDB and under-utilised will be identified and brought in for private investment, including SMEs, taking the suitability of the land into consideration. We propose to allocate Rs. 250 million to undertake initial activities in this regard. 

Youth entrepreneurship development in agriculture

The youth entrepreneurs in agro-based SMEs, particularly those who expect to scale up or are willing to engage in startups, will be targeted through this initiative. We propose to allocate Rs. 500 million for this purpose.

Dairy production

At present, domestic milk production is sufficient only to cater to around 45% of the local demand. In order to increase the dairy production, Rs. 2.5 billion is proposed to be invested during 2025-26 for the improvement of dairy value chains and to enhance dairy farming productivity through the ongoing Inclusive Connectivity Development Project. 

Plantations and other export crops

The global demand for coconut products is continuously increasing, and as predicted by the industry, total nut requirement of the country would be 4,500 million nuts in 2030, where 1,800 million nuts are expected to be used for home consumption and the balance 2,700 million nuts can be absorbed for industry purposes. 

Therefore, we propose to allocate Rs. 500 million for high-yielding coconut seedlings to the growers in the Northern region for planting 16,000 acres of new coconut land in the established Northern Coconut Triangle based on Coconut Research Institute (CRI) recommendation. 

Measures will be taken to expand value addition in traditional exports such as cinnamon. Marketing and promotion of these products will be enhanced through Sri Lanka’s embassies. The Government will provide technical assistance to farmers in order to improve supply quality and facilitate linkage with value-added exporters, including through international joint ventures. 

In order to link to the global value chain, we propose to allocate Rs. 250 million to implement an integrated product development and trade promotion program on Ceylon cinnamon and other export crops. 

Fisheries and aquaculture

Limited availability of freshwater prawn seeds is identified as a major constraint to further develop the freshwater prawn farming industry in Sri Lanka. In order to promote the stocking of freshwater prawn in tanks and non-traditional aquaculture and enhance future production towards the export economy, we propose to empower farming community/fisheries societies and local communities and establishment of freshwater prawn hatcheries under Public Private Partnership (PPP) arrangements, farmer cooperatives, and marketing networks, and facilitate farmer societies to link with such marketing networks as well. For this purpose, we propose to allocate Rs. 200 million.