• Farmers demand relief
• Overall allocation down Rs. 3.3 b to Rs. 218 b
• Capital expenditure falls from Rs. 131.3 b to Rs. 119 b
• Budget fails 34% of workforce engaged in agriculture: Union 

The National Agrarians’ Unity organisation has described Budget 2027 as a traditional one that offers no relief to farmers, as proposed funding for the agriculture sector declines marginally against the previous year while capital expenditure falls by Rs. 12.3 billion.

Its Chairman Anuradha Tennakoon, speaking to The Sunday Morning, said that the budget failed to provide a plan for the 34% of the workforce engaged in agriculture. 

President and Finance Minister Anura Kumara Dissanayake said in the budget speech on Thursday (12) that agriculture contributed 8.4% to the national Gross Domestic Product (GDP), but Tennakoon said there was no financial allocation or plan to raise that contribution to 12%, 15%, or 16%.

The Ministry of Agriculture, Livestock, Land, and Irrigation recorded a reduction of Rs. 3.3 billion, or 1.5%, in its proposed allocation, falling from Rs. 221.3 billion in 2026 to Rs. 218 billion in 2027.

Recurrent expenditure increases from Rs. 90 billion to Rs. 99 billion, while capital expenditure falls from Rs. 131.3 billion to Rs. 119 billion. The Department of Irrigation receives a higher allocation of approximately Rs. 27.38 billion, compared with Rs. 25.89 billion in 2026. The figures point to differing expenditure movements within the sector rather than a uniform reduction across all agricultural institutions.

Tennakoon said that the sum raised serious questions. “Only a small sum of around Rs. 218 billion has been allocated for agriculture, land resources, and irrigation, raising serious questions about how far such an amount can go in building a production economy,” he said. He added that priority had not been given to the essential areas within agriculture and that the country had instead been given “another traditional budget”.

He also noted that not even 30–40% of the funds proposed in the 2026 Budget for agriculture, irrigation, and infrastructure had actually been spent.

The budget speech by President Dissanayake on Thursday (12) noted that over Rs. 200 billion had historically been spent annually on public investment and subsidies in the agricultural sector. 

For 2027, allocations have been given across sub-sectors. Rs. 77 billion has been earmarked for irrigation and water resources development and climate resilience, including Rs. 15 billion for minor irrigation schemes, while Rs. 44 billion has been allocated to maintain the paddy fertiliser subsidy at Rs. 30,000 per hectare and extend it to other field crops.

Rs. 13 billion has been set aside for the development of the tea, rubber, coconut, and palmyrah sectors, and Rs. 6.2 billion for harbour development, inland fisheries, and research. 

In the livestock sector, Rs. 3 billion has been allocated to complete the Milco milk processing factory in Badalgama and Rs. 1.8 billion to import breeding stock. A further Rs. 1.55 billion has been allocated to encourage cultivation on uncultivated or low-productivity paddy lands, and Rs. 20 billion has been provided as an interest-free credit facility for small and medium paddy millers to purchase paddy at guaranteed prices under the Paddy Pledge Loan Credit Scheme.

Tennakoon said that taxes on agricultural inputs, tools, and machinery had not been reduced to lower production costs, even though tax reductions had been granted to some other sectors. He said that while salaries had been increased across almost every other sector, there had been no increase in the farmer pension or insurance payments from the Agricultural and Agrarian Insurance Board, which were still paid according to a 2017 circular.

He further claimed that nearly 32% of agricultural produce in the country was destroyed by wild animals, including elephants, toque macaques, and wild boars. “Although toque macaques have been counted since 2024, no solutions have been provided and no funds or work have been allocated to address this issue,” he said.

Tennakoon said the country had spent nearly $ 14 million in 2025 to import 265 MT of seeds, the highest in history, yet no funds or attention had been allocated in the budget to produce the required seeds locally despite the country’s capacity. He said no attention had been paid to big onion, red onion, or supplementary crop farmers.

Comparing Sri Lanka with the Netherlands, he said that the latter, with a total area of 38,000 sq km and about 10,000 sq km under cultivation, had turned its agricultural export economy into the second largest in the world. Sri Lanka, with over 65,700 sq km of land and 28,000 sq km under cultivation, earned less than $ 2–3 billion annually from agricultural exports, he said, because no attention had been paid to value addition or an export focus.

Describing the budget speech, Tennakoon said it contained “literature, nationalistic rhetoric, pleasant words, and large figures”. He charged that neither a farmer nor a worker could take home even Rs. 5 worth of relief from the budget. 

The union has prepared a proposal consisting of 15 primary priorities and 25 additional supporting points, which it plans to submit to the Ministry of Finance during the committee stage debate to rebuild the agriculture sector, according to Tennakoon.