NLDB’s unused lands to be leased to companies

  • Private sector expected to convert lands to large scale dairy farms

In order to make Sri Lanka’s domestic milk production self-sufficient by 2023, the Government has decided to lease out unutilised lands that belong to the National Livestock Development Board (NLDB) to private sector investors to set up large scale dairy farms.

Yesterday (7), the Cabinet of Ministers approved a proposal to lease these lands for private sector investors for 30 years.

The current Government is seeking to make domestic milk production self-sufficient in another two years, and for such purpose, the Presidential Task Force on Economic Revival and Poverty Eradication submitted proposals to the Board of Investment (BOI) to encourage local and foreign investors to improve local milk production.

Accordingly, the BOI invited proposals from interested investors, and based on which, the technical committee of the BOI submitted its recommendations. Under the proposal submitted by the Minister of Agriculture, a couple of land slots would be allocated for this purpose.

This includes the allotment of 700 acres of Nikaweratiya farm belonging to NLDB to H.B.K.I.R. International/ Access Agro (Pvt.) Ltd.; allotment of 60 acres to Pesara Logistics Institute; allotment of 811 acres of Galabodawaththa Estate and Mount Jean Estate belonging to the Janatha Estate Development Board to Farm’s Pride (Pvt.) Ltd.; allotment of 200 acres and 150 acres respectively from Delthota Estate and Grate Valley belonging to the Janatha Estate Development Board to Hillside Agro (Pvt.) Ltd.; and the allotment of 250 acres of Kottukachchiya Farm belonging to the NLDB to Gamma Pizzakraft Lanka (Pvt.) Ltd. 

Currently only around 40% of Sri Lanka’s liquid milk requirement is sourced locally, with domestic milk production standing at 414.8 million litres as of 2020. Therefore, in 2020 Sri Lanka imported 97,575 MT of milk at a value of Rs. 58.7 billion. 

According to the Livestock, Farm Promotion, and Dairy and Egg-Related Industries State Ministry, only around three litres of milk is obtained from one cow per day. Improving this up to five to six litres per day would help in meeting 60-70% of the local milk demand with the current existing cow population in Sri Lanka which is around 1.5 million as of 2019, with the highest cow populations recorded in the Kurunegala, Batticaloa, and Anuradhapura Districts. The Ministry of Agriculture has introduced several programmes to educate dairy farmers on the manner in which the cows must be maintained to effect such improvement.

The Government is also planning to provide tax relief for the importation of cows from abroad. This was further explained by Minister of Agriculture Mahindananda Aluthgamage who stated: “There are 22 plantation companies throughout the country. We urged a plantation company to buy a thousand milk cows. For that, the Government will provide necessary infrastructure facilities. Accordingly, technical knowledge, relief, financial assistance, land for livestock feed production, and other facilities will also be provided.” Through this initiative the Government hopes to increase the current annual milk production in the country from 422 million litres to 750 million litres.

This initiative is part of the Government’s plan to increase the contribution of the agriculture sector to the Gross Domestic Production (GDP). The contribution of agriculture to the GDP was 8.3% in 2020, which represents a significant decrease in comparison to the contribution of agriculture in the 1980s which was at around 27%.