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Sri Lanka: Second Perennial Crops Development Project

| country: Sri Lanka

According to the project completion report (PCR), the Project confirmed the high development potential for perennial crops and reconfirmed the creditworthiness of smallholder farmers. The experience of the pilot activity under the Project showed that potential exists in Sri Lanka for a gradual introduction of a fee-levying private extension services among commercial farmers with a better ability to pay, leaving scarce government resources to serve the poor and subsistence-level groups of farmers more effectively. However, to be profitable, private sector extension services must be integrated into other commercial operations, such as the sale of farm inputs. A company set up solely to provide extension services may not be viable in the long term.

The PCR summarized a further nine lessons. An additional lesson relates to Treasury approval of the revolving fund. A project’s design should assess the desirability of making revolving fund approval a condition for loan effectiveness in situations where problems with approval are anticipated.

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