Sri Lanka economic centers are set for a structural overhaul as the government moves to centralize their management under a newly formed state-owned company. The reform aims to correct inefficiencies and restore their original trading mandate.
Sri Lanka economic centers to be unified under new agri-marketing body
Sri Lanka’s government has initiated a significant administrative reform targeting its network of 18 dedicated trade hubs, seeking to resolve longstanding operational weaknesses and ensure uniform governance. Trade and Food Security Minister Wasantha Samarasinghe announced in Parliament that a new state-owned limited liability entity, the National Agri-Marketing Service, has been incorporated to standardize the functioning of these centers.
The decision follows mounting criticism over fragmented oversight and inconsistent administrative practices that have, according to the minister, diluted the core purpose of these facilities. Originally conceived as structured marketplaces to facilitate wholesale trade between farmers, traders, and retailers, several centers have reportedly deviated from their intended mandate.
Samarasinghe explained that the newly established body will operate under the Secretary to the Treasury, signaling direct fiscal supervision and tighter institutional control. By consolidating authority within a single corporate framework, policymakers expect to eliminate operational disparities among the 18 locations and enforce consistent regulatory compliance.
The reform addresses what the minister described as systemic management lapses. Under the existing model, administrative decisions were made at the ministry level without cohesive coordination, leading to unintended commercial diversification. Facilities meant to support agricultural marketing and distribution allegedly became venues for unrelated business activities.
In Parliament, responding to concerns raised by MP Chamara Sampath Dasanayake, the minister cited specific examples of misuse. Some stall spaces, originally allocated to traders for agricultural commerce, were reportedly repurposed for banking operations. In other cases, traders who were granted occupancy rights had sublet or even sold their stalls at substantial prices. One shop at the Dambulla economic center was allegedly sold for 50 million rupees, while another transaction reached 75 million rupees. Such sales are considered unlawful because the properties remain government-owned assets.
These developments underscore structural vulnerabilities in governance. When allocation rights evolve into quasi-ownership in practice, asset mispricing and speculative resale become inevitable. Without centralized monitoring, rent-seeking behavior can distort market access, crowd out small-scale farmers, and inflate operational costs within the supply chain.
The new institutional framework is intended to correct these distortions. By incorporating the Sri Lanka economic centers into a unified legal entity, the government aims to introduce standardized lease agreements, transparent allocation mechanisms, and enforceable compliance audits. Direct oversight by the Treasury could also facilitate improved revenue tracking and prevent leakage of state resources.
However, the reform has prompted debate regarding administrative overlap. Dasanayake noted that the centers were already overseen by a management trust under the Treasury, suggesting that coordination with existing structures may be more efficient than establishing a new company. This critique raises questions about bureaucratic layering and the potential for institutional redundancy.
From a policy perspective, the success of this restructuring will depend on implementation fidelity. Formal incorporation alone will not resolve entrenched practices unless accompanied by clear governance metrics, digitalized asset registries, and periodic performance evaluations. Transparent stall allocation criteria and enforceable contractual obligations will be central to restoring credibility.
Economically, the stakes are substantial. These wholesale hubs function as critical nodes in the agricultural value chain, influencing price discovery, distribution efficiency, and post-harvest loss management. Inefficiencies at this level can ripple through retail markets, affecting consumer prices and farmer incomes. A more disciplined management regime could enhance logistical coordination, reduce arbitrage distortions, and strengthen food security resilience.
The formation of the National Agri-Marketing Service also reflects broader public-sector reform trends in Sri Lanka, where corporatized state entities are increasingly used to impose accountability and streamline operations. By transitioning from dispersed administrative control to a limited liability company structure, authorities are effectively adopting a hybrid governance model that blends public ownership with corporate discipline.
Whether this structural shift will produce measurable improvements remains to be seen. Stakeholders across the agricultural sector will be closely monitoring enforcement actions against unauthorized stall transfers and the reallocation of misused spaces. The ultimate objective, as articulated by the minister, is to ensure that Sri Lanka economic centers return to their foundational mission: facilitating fair, transparent, and efficient trade for farmers and legitimate traders.
If executed with institutional rigor, the reform could recalibrate incentives within these marketplaces and restore operational integrity. If not, the initiative risks becoming another administrative reshuffle without tangible impact.