Six industry sector studies in the East coast, including dairy and horticulture, have been supported by the U.S. Agency for International Development (USAID). These studies were undertaken in order to identify growth opportunities in the East for the private sector, the recommendations and assessments for which were released by USAID to key stakeholders in the government, private sector, and other industries.

30% of Sri Lanka’s land is used for agricultural purposes, 75% of which is farmed under smallholdings, with livestock contributing only 1.2 % to the country’s GDP. The dairy sector is an integral sub-sector of the livestock industry mainly due to its potential influence on the rural economy.

Milk production covered 80% of Sri Lanka’s consumption needs in the early 70tis. However, this has sharply decreased over the years with the increased imports of Milk Powder. Today Sri Lanka’s milk production covers a meagre 20% of the national consumption, and imported dairy products drained the economy of Rs. 32 billion (US$ 294 million) in 2008.

In order to amend this drain the Sri Lankan government has set out the ambitious target of becoming at least 50% self sufficient in milk by 2015. The Eastern Provence has the largest herds of animals in Sri Lanka; however, due to the prolonged conflict milk production has been limited. With good nutrition, housing, breeding and intensive management practices, the dairy sector productivity should increase substantially.

Horticulture, like the dairy sector has huge potential in the Eastern Province. The countries tropical location and two monsoon seasons make it ideal for growing tropical fruits and vegetables year round which can be used domestically and also for export. 2008 saw US$ 69 million worth of exports on fruit and vegetable, 0.7% of Sri Lanka’s exports for the year, a 167% increase from 2006.

Extensive private and public investment is needed in order to successfully grow and export more tropical fruits from Sri Lanka. More ways must be found to educate farmers about the best practices, market opportunities, and urgent issues such as the spread of pests. The USAID support study shows that the Eastern Province has the opportunity to re-engage in crops like cashew for domestic and export markets as well as the ever expanding and in demand tropical fruit market.

USAID are concerned with working beyond livelihood support, with those able to go beyond basic needs. By working directly with the private sector, USAID are trying to connect end users and create a chain. The CORE program is designed to increase social and economic security in eastern Sri Lanka and for that the disparity in economic development between the North and East must be addressed.