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Currently, northern Sri Lanka is recovering from two different crises: the decades-long civil war between the government forces and the Liberation Tigers of Tamil Eelam that ended in May 2009, and recent flooding due to heavy rainfall in January and February 2011 in the north and east of the country. The last stage of the conflict displaced over 280,000 people and resettlement is still ongoing. As of August 2010, only about 15,000 people remained in IDP camps.
This report presents the results of a rapid analysis of the rice market system in the Northern Province of Sri Lanka that took place shortly after the floods. Using the EMMA methodology, this assessment focused on returnees and other vulnerable populations in Northern Province who currently engage in, or could engage in, the rice value chain. This market assessment looks at the rice market system, as it is critical to the livelihoods of vulnerable households in the area, as both a key source of income and as a staple food.
The North was previously a rice surplus area, with relatively flat topography and good soil for paddy cultivation. Locally, the paddy/rice market system is functional, in the sense that paddy growers and consumers are able to sell and buy the products. The value chain is well integrated across the country, and regional shortages and surpluses balance out fairly well. However, the market system is inefficient, and market power is unevenly distributed. In addition, yield productivity is limited due to inadequate irrigation systems and farming methods. It is also worth noting that quality seed has long been difficult to find in local markets.
The numbers of some market actors, especially mills and human resources for manual and skilled labor, have decreased over the length of the conflict. The long-term conflict also caused underdevelopment of infrastructure and insufficient services in the region. Direct flood damage in the region was relatively small. However, unexpected rainy weather has made it hard to dry and store paddy, causing fungus damage, loss of seed stocks for the coming season, and damage to roads.
Short to medium-term recommendations include supporting storage and irrigation, diversifying production, improving market information and developing small enterprises with mills and equipment. Long-term development suggestions include supporting the growth of farmer organizations, constructing more sophisticated storage and financing options and the facilitation of higher-value rice production.