In a major boost to Sri Lanka’s agricultural sector, a Memorandum of Understanding (MoU) was signed yesterday at the Presidential Secretariat to provide interest-free loans to agribusiness entrepreneurs and farmers. This marks the beginning of the Agricultural Modernisation Program’s first phase.
The MoUs were formalized between the Bank of Ceylon, the Regional Development Bank, and the Agriculture and Plantation Industry Ministry, with Agriculture Ministry Secretary Janaka Dharmakeerthi representing the government. A similar MoU with the People’s Bank is expected to be finalized soon.
The initial phase of the program has allocated Rs. 650 million to support projects through agricultural modernisation centres in 26 selected Divisional Secretariat (DS) divisions. A total of 75 DS divisions are earmarked for these pilot projects.
Under this scheme, agribusiness entrepreneurs and farmers will cover over 30% of project costs, with the remaining 70% funded by the Government. The scheme operates through a revolving credit mechanism, where the Government’s contribution is offered as an interest-free loan. Beneficiaries can process their loans through the Bank of Ceylon, People’s Bank, or the Regional Development Bank, as established by a Cabinet memorandum presented by President Ranil Wickremesinghe.
Loans will be disbursed from an account held by the Agriculture and Plantation Industry Ministry Secretary at the Bank of Ceylon’s Head Office. Beneficiaries will have up to six months of concession period and a maximum repayment period of five years, with specific terms determined by the agricultural modernisation centres based on the project’s scope.
Minister Dharmakeerthi emphasized the need for production-oriented programs, stating, “We need to transition to production-oriented initiatives. This agreement will support projects with production potential, providing essential facilities to boost future production.”
While acknowledging past efforts to increase production, Dharmakeerthi expressed optimism that the agricultural modernisation program will achieve significant milestones and support long-term goals.
Presidential Senior Advisor on Economic Affairs, Dr. R.H.S. Samaratunga, highlighted that the Agricultural Modernisation Program was featured in two budgets presented by President Wickremesinghe. “The agreement signed today is a crucial step in advancing the program, which aims to utilize unused land for local entrepreneurs and foster export-oriented agriculture,” he said.
The event was attended by key officials including Senior Prof. Gamini Senanayake, Chandra Herath, A.A.C. Nilantha Perera, R.M.N. Jeevantha, and E.A.D. Janitha Priyashantha.