Modernizing Sri Lanka’s Agri-food System through Strategic Repurposing of Spending and Public Policies

Overview & Synopsis

This report assesses how agricultural public spending can better support Sri Lanka’s transformation toward a more productive, resilient, and market-oriented agri-food system. Agriculture remains a critical sector for the economy and livelihoods but faces mounting challenges from economic shocks, food insecurity, climate change, land degradation, and low productivity growth. The study examines public expenditure in food and agriculture from 2017 to 2024 using the FAO MAFAP framework and finds that fragmented and poorly targeted support programs, dominated by input subsidies and import-substitution policies, have limited diversification, discouraged private investment, and constrained export growth. The report highlights the need to shift public spending toward high-value agriculture, value chain development, climate-smart practices, ecosystem restoration, and improved market access. It aims to inform policy reforms that enhance productivity, strengthen resilience, attract private investment, diversify exports, and promote sustainable agricultural growth in Sri Lanka.