Cablegate: Fy06 Usda Food for Progress Request
VZCZCXYZ0007
RR RUEHWEB
DE RUEHLM #1199 2020623
ZNR UUUUU ZZH
R 210623Z JUL 06
FM AMEMBASSY COLOMBO
TO RUEHRC/USDA FAS WASHDC
INFO RUEHC/SECSTATE WASHDC 3892
RUEHNE/AMEMBASSY NEW DELHI 9810
UNCLAS COLOMBO 001199
SIPDIS
USDA/FAS/ EXPORT CREDITS FOR ROBIN TILSWORTH
USDA/FAS/ EXPORTS CREDITS FOR RON CROUSHORN
NEW DELHI FOR FAS
SIPDIS
E.O. 12958: N/A
TAGS: EAGR EAID CE
SUBJECT: FY06 USDA FOOD FOR PROGRESS REQUEST
REF: SECSTATE 99922
1. Post recommends $3 million of Hard Wheat for a Govt-Govt PL
480 Title 1 funded Food for Progress (FFP) for FY06, Sri Lanka. Sri
Lanka does not produce wheat and its entire requirement is met
through imports. The US has not competed effectively in the wheat
market since the country's sole wheat mill was privatized. In the
event hard wheat is unavailable, post is willing to accept viable
alternatives for the Govt-Govt FFP program.
2. The monetized proceeds from the sale of wheat will be used
to support programs aimed at reducing post-harvest losses in the
country. Lack of proper post-harvest systems and technology has been
identified as one of the biggest constraints impeding the growth of
the local agriculture sector. It is estimated that the country's
annual post-harvest loss of fruits and vegetables is around Rupees 9
billion ($90 million), which is equivalent to 40 percent of the
total fruit and vegetable output in the country. Lack of proper
valued-added processes, stagnant food development technology,
improper handling, transportation and storage are some of the
reasons attributed to this significant loss at post-harvest. Up to
25 percent of losses at post-harvest are due to improper handling,
packaging and transport. These factors contribute to Sri Lanka
having some of the highest food prices in the region.
3. Additionally, farmers routinely do not obtain reasonable prices
for their yields. Educating and providing technology transfer in
marketing produce, including value addition, would help farmers
generate sustainable income from farming activities.
4. The monetized proceeds will be used to set up post-harvest units
to educate and train farmers in proper post-harvest practices and to
develop infrastructure facilities such as storage to increase shelf
life of the produce. Proceeds will also be used to promote
post-harvest concepts developed by the Institute of Post Harvest
Technology and Department of Agriculture to farmers through farmer
organizations. Developing marketing channels in order to provide
better prices for farmers is another important objective that will
be addressed by the monetized proceeds. All agencies within the
government in the agriculture sector would coordinate efforts to
implement programs that will address these critical issues facing
the agriculture sector.
5. The requested allocation of USD 3 million of hard wheat will
not have an adverse impact on commercial sales. No wheat is
produced in the country and the annual requirements of approximately
950,000 MT are met through imports. In 2005, approximately USD 150
million worth of wheat was imported into the country from Canada,
Argentina, India, and Australia. Therefore, the requested FFP Grant
amounts to less than 2 percent of total commercial imports, which is
negligible in the context of the value of annual wheat imports into
Sri Lanka.
ENTWISTLE#