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22nd October 2000
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The Kantale Tank is like their Godfather. They bathe, 
they play and they fish…not for pleasure but to make 
ends meet. Little schoolboys go to the tank straight after 
school to fish for their family's next meal. If they are lucky 
some rich tourists will buy up their afternoon's labour. 
If not what? Maybe they take it back home for another meal of fish. 
Pic by Lakshman Gunathilake

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Mirrror Magazine

Himalayan Fund chills out

By Dinali Goonawardene
A pioneering foreign fund has ditched the remnants of its once massive portfolio last week. The Himalayan Fund with investments of around US $350 mn in the subcontinent went on a selling spree getting rid of stocks such as Lanka Lubricants, Lanka Milk Foods and Colombo Dockyard. However the fund continues to hold a stake in Lanka Ceramics and John Keells Holdings.

The Himalayan Fund has been selling out of Sri Lanka over the last couple of years despite its fund manager, Ayaz Ebrahim saying there was an "upside to Colombo." 

"Although returns from Colombo average no more than six percent it is cheap and interest rates are declining," Ebrahim said at a fund Managers conference hosted by the Colombo Stock Exchange late last year. 

But interest rates are now spiralling and the equation appears to have changed. 

The fund which entered Sri Lanka in 1990 increased its investment significantly in 1993, creating waves in the market in the process.

"The post election decision to opt out of the remains of its portfolio in Sri Lanka speaks poorly for the market," a leading broker said. Sentiment in the market is low, as many broking houses operate at minimum strength while others consider restructuring. The brokerage income earned by broking companies declined by Rs. 72 mn in 1999. 

The Himalayan Fund is managed by CA Indocam Asia Asset Management. This Hong Kong based fund is listed on the London Stock Exchange and Amsterdam Exchange. Its shareholders voted in favour of open ending the fund in March last year. A dedicated fund, the Sri Lanka Growth Fund also quit the country's shores in March this year. Foreign funds operating in the market include the Regent Fund and Investor Global.


Interest rates inch upwards 

Election hysteria may almost be over but what has it left in the markets? 

Government Treasury bill rates crept upwards last week with one year bills yielding almost 16%. Shorter maturities followed suit. 

Dilhan Kohombanwickremage of Sampath Surakum Primary Dealers said, There is uncertainty in the market. We are also stepping into seasonally high months soon".

Most dealers are not expecting rates to drop in the next few months.

Mr Senarath Seneviratne, Treasurer HSBC feels that shortage of liquidity is the main reason. 

"The market is Rs 12 billion short. The deciding factor will be the reverse repo rate." Market demand has been unusually high from the Reverse Repo window of the Central Bank in the last few months.

Low liquidity also meant that bids at the Treasury bill auction were mostly Over 16%. The Central Bank had to pick the best bids and purchase the balance. Over a billion worth of bills were purchased in each of the last two auctions. One reason for low demand is the absence of large government funds. "Captive sources have not been big players", Mr Seneviratne said.

Savers will however be happy to see such attractive rates. Savings accounts give only 2% to 10% at present. There has also been no change since last year. The AWDR has actually seen a drop in September to 9.03% from August. One year fixed deposits yield a maximum of 12.5%, which compares poorly to one year T-bills.

High rates are also helping the value of the rupee. But predictions are not easy.

"That's a tough one. It might trade in a 30 cent band," said Mr Seneviratne of HSBC. With strong words coming from the Central Bank that the new fixed band will not be shifted up, the rupee eased downwards this week. Foreign reserves are low but may not be a serious problem according to him. Borrowing and donations can always prop it up.

The situation is however not rosy. Most dealers would prefer lower interest rates, as market activity is now low. 

Debt securities traders are not marking portfolios to the market and are holding on. It's a similar story in the forex market. The hardest hit are however the issuers of debt. All new issues are being held back due to uncertainty and the high interest cost to issuers.


Mind your Business

Kingmaker gets the job

It was almost a foregone conclusion that the greenhorn who turned blue would not be given the task of presenting the budget but after the ad man lost his seat there was a lot of bidding for his job too.

Among those who wanted the portfolio was the previously healthy one, they say.

However it is also known that the private sector big wigs made their

representations on the matter, opposing plans to appoint the new king-maker.

But the lady would have none of it, so the king-maker it was who got the job, though a lot of his colleagues in the newly elected House are not happy with that choice...

More time before a hike

Remember that rumoured fuel price hike that was widely expected with the rise in world oil prices?

The only reason why it was deferred was the election and the consequences it would have on the polls, so the matter is being reconsidered now.

Indications are that there will indeed be a price hike sooner rather than later but some have cautioned that these are still early days for the new regime and to carry on for a few more weeks before making the announcement...

Credit card fever spreads to schools 

The first school to link to the credit card business were the regal people who joined with their partners in progress. 

Now their arch-rivals have begun the card business with the arch-rivals of the partners, those who claim to be sons of the soil. It's becoming a fashion now and more schools are negotiating with more banks about similar schemes, we hear. So, very soon, school-sponsored credit cards will be as common as those ubiquitous stickers on rear windscreens... 


Reveal them, says SEC annual report

Thirty percent of listed companies have not complied with the continuing listing requirements of the Colombo Stock Exchange, the Securities and Exchange Commission annual report said. While the SEC has reviewed 200 annual reports, it reports the most common deviation to be the non-disclosure of information required in the annual report.

This included information relating to dividend per share, net asset value per share, earnings per share, market value per share, directors shareholdings, shareholding in subsidiary and associate companies and principal activities of subsidiaries.

The SEC also communicated with 93 companies regarding noncompliance with Sri Lanka Accounting Standards. Action was taken depending on the materiality of issues and ranged from requiring companies to provide shareholders with correct information to advise to comply in future. Failure to state significant accounting policies, non-disclosure of related party transactions and non-provision of segmental information were among oft-repeated deviations from the standards.

Non provision of depreciation for buildings, and failure to make proper disclosure when revaluing property plant and equipment, are other common deviations from the standards.

Meanwhile the draft amendments to the Securities and Exchange Commission Act are being finalised by the legal draftsman. The amending legislation confers upon the Securities and Exchange Commission (SEC), authority to register and regulate new market intermediaries, the SEC's 1999 annual report stated. This includes underwriters, margin providers, credit rating agencies, investment/portfolio managers who manage listed portfolios and securities depositories.

The legislation will grant wider powers of investigation to the SEC while widening the scope of insider dealings provisions and enhancing penalties. It also seeks to widen the punitive jurisdiction of the SEC. The provisions relating to the appellate powers granted to the secretary to the ministry of finance are being repealed through the draft legislation.


No business like supermarket business

By Chanakya Dissanayake
The supermarket industry in Sri Lanka is rapidly shedding its up market image and entering the mass market aggressively. Both Cargills and Keells , the two leading players , are looking to expand and open more outlets in key towns.

The market potential for supermarkets has remained strong due to the fact that only 3% of total consumer shopping is done at supermarkets. 

In Europe and USA more than 90% of consumer shopping is done in supermarkets. 

"The challenge is to change the consumer mindset. Traditionally there is a belief among consumers that supermarkets are meant for the upper-class. Our main attempt is to change this misbelief. Supermarkets are meant for everyone and anyone who shops at a grocery", said Director Keells Supermarkets, Sarinda Unamboowa.

Cargills, the market leader with 19 outlets, launched an advertising campaign aimed at creating more awareness among the general public about the supermarket concept.

The advertisement which featured the Sinhala tele drama star Mahendra Perera, saw a 30% growth in sales. "The awareness campaign was very successful. We see many customers who previously did not shop at supermarkets coming to our outlets", said Executive Director Cargills, Imtiaz Wahid.

Both Cargills and Keells has offered additional conveniences, including banking services and laundry services to customers shopping at their outlets. This was especially aimed at families with working mothers and busy individuals. Consumer spending as a volume has gone up in Sri Lanka. But the supermarkets say that there is a trend towards value. "A few years ago people shopping at supermarkets bought more imported goods. But today they buy more local goods", said Mr. Unamboowa.

During the last five years many small players have also entered the supermarket industry. Among them Bairaha is fast becoming the third force in the industry with three outlets in Colombo and two more in the pipeline. Bairaha is concentrating on providing a low priced quality service to the masses.

"We have a strong poultry chain behind us. It enables us to provide fresh poultry and sausages at very competitive prices", said Manager Bairaha Supermarkets, Timothy Vancuylenburg.

Supermarket chains operate with very low gross profit margins in order to be competitive. The industry average is between 12% to 18%. The profitability of a supermarket chain depends on its efficiency, cashflow management and its ability to minimise wastage and pilferage. Both Keells and Cargills are keen on minimising their operating expenditure. Cargills believes in optimising the level of staff and operates with about 50% fewer staff than its competitors. 

The leading players also called for government assistance to expand this fledging industry. 

"Sometimes we find it very hard to find suitable premises to open outlets. The Government has lots of unutilised land, if the government can provide these lands on long lease at rents we can pass the benefit to the consumer. We can also contribute to the nation's economy by buying agriculture produce straight from the farmer. This will eliminate the middleman and farmers will get a better price. Also due to our superior packaging and transporting wastage will be minimised and the consumer will get a better deal. Currently there is a wastage of 50% of agriculture produce which adds to the price consumers pay," said Mr Wahid. 


Building business confidence vital 

Restoring business confidence should be a priority of the government. For sometime now the business community has been disillusioned and demoralised by the lack of concern for the economy. It is no secret that by and large the business community was hoping for a change of government. 

Now that it has not happened, it is of utmost importance to take actions that will restore confidence in the business community. Business confidence would play an important role in increasing investment and thereby generating economic growth and increasing employment opportunities. The government must demonstrate their will to support a robust economy and inspire confidence among investors both foreign and local. 

The erosion of confidence can be seen very clearly in the decline of the share price indices and the outflow of foreign portfolio investment. At the end of 1997 the All Share Price Index was around 702 index points. There has been a declining trend since then with the market dropping to around 500 points this week. 

The Milanka Price Index with a base of 1000 at the end of 1998, fell to 937.5 at the end of 1999 and to a low of around 820 this week. Market capitalisation has fallen, foreign participation has declined and trading volumes have decreased. 

These are clear indications of a loss in confidence as these declines have not been matched by similar losses in profitability of companies traded on the exchange. In fact the country is facing somewhat of an export boom with industrial exports increasing by as much as 30 per cent and agricultural exports growing by about 10 per cent owing to a tea boom. 

These favourable factors have not rubbed off on the share market precisely because of a lack of confidence in the government's role in the economy. The government can ill afford to allow the business confidence to slide. The erosion of confidence will seriously jeopardise domestic and foreign investment. 

The needed actions on the part of the government are elementary. It must make a clear statement of the government's economic policy. This is particularly important in view of contradictory statements made by important members of the government during the election campaign. 

Since the government is a coalition of several divergent parties and several alliances have been necessary to form the government with a slim majority, it is vitally important to make clear its economic policy The constituent parties should be committed to the stated policy. One of the reasons for the ineffectiveness of the last government was that it did not have a full time Finance Minister. 

The Deputy Finance Minister was not given adequate powers but his wings were clipped in several ways.We hope that the Cabinet would have a full time finance minister. Readers would know whether this is so as a cabinet would have been sworn in by the time this is read.

The business community, would take this as a first sign of the government's serious concern about the economy and its capacity to act speedily on the economic front. In addition it is most important to put in place mechanisms that would enable speedy actions on emerging economic problems. 

Given a large cabinet of fragmented ministries and the continuous political distractions that are inevitable, it is essential for several members of the cabinet to be free from these distractions and devote their full attention on economic affairs. 

These ministers should be backed up by a strong team of professionals and administrators. There should be ways and means of clearing bottlenecks and hurdles, as well as monitoring the implementation of development projects and ensuring their speedy implementation. 

All these are needed to build the confidence that there is a government in place that would give every support to the business community .The engine of the government must function smoothly and speedily if the "Twin Engines of Economic growth" are to perform effectively. 

The other essential need is to get the economic fundamentals straightened out. Fundamental to this is he need to keep the budget deficit to manageable proportions. This year's budget deficit is likely to balloon to about 10 per cent of GDP despite cuts in capital expenditures. 

This is an unacceptable figure as it would cause a significant degree of instability. Inflationary pressures would be high, interest rates would rise and the exchange rate of the Rupee would depreciate. All these features have already emerged and would gain momentum if corrective measures are not taken. 

Therefore it is very necessary to enforce fiscal discipline from the beginning. The last government was notorious for preaching fiscal discipline and practicing indiscipline. Unless the government gets back to a path of fiscal discipline, the economic fundamentals are likely to deteriorate with enormously serious consequences. 

The rhetoric of fiscal discipline must be backed by actions to enforce it, rather than excuses of why it could not be effected. 

Unless the government demonstrates a realistic way of reducing the budget deficit from its first budget for 2001, there could be serious strains on the economy. And the fundamental economic indicators would deteriorate and be a cause for further erosion of business confidence. 

The new government must take measures to assure the business community that it is seriously interested in creating the economic environment in which businesses could operate effectively.

It must demonstrate this in several ways as suggested above. It must also get the economic fundamentals straightened out to ensure economic stability so essential to economic growth. Since the required measures are not likely to be popular, it would require considerable political courage to take these corrective measures. 


Improving small farmer agriculture - a realistic approach

By Ranjit Mulleriyawa
"The fundamental problem confronting agriculture is not so much the adoption and spread of any particular set of physical inputs or of economic arrangements or of organizational patterns or of research institutions. Rather it is to build into the whole agricultural process an attitude of experiment, trial and error, continued innovation and adaptation of new ideas.

Food production in Sri Lanka has been traditionally relegated to a large number of small farmers whose individual plots rarely exceed one hectare in extent. These small plot sizes have frequently been blamed for the relatively low productivity of Sri Lankan agriculture. In a bid to increase overall food production and following global trends, the government has embarked on a new agricultural policy which advocates increased commercialization of 'non plantation agriculture'. 

It also intends creating a land market and levying charges for irrigation water. Our new policy on rural development (rural economic advancement programme - REAP) makes a radical departure from a poverty alleviation focus to economic development placing heavy emphasis on the identification and selective development of areas having high potential for economic growth ('growth nodes'). Implementation of the above policies would most likely lead to increased marginalization of the poorest sectors of the rural community - viz., the small farmers. Unable to survive on their micro plots of land, many of these small farmers will be compelled to seek off-farm employment. 

It is highly unlikely that the economy will be able to expand sufficiently (in the short term at least) to provide adequate productive employment for a large number of small farmers unable to cope with the pressures of commercialization and globalization. Safety net programmes like 'Samurdhi' may provide some relief to these people, but it cannot possibly cope with the magnitude of the problem. Is the small farmer (once considered to be the 'backbone of the nation'), doomed to the misery of urban slums seeking alternate employment?

Role for NGOs

Even during the best of times, public sector research and extension has not been very effective in reaching the poorest farmers. With present government policy being heavily biased towards the more entrepreneurial farmers inclined towards commercialization, there is even a lesser chance of poor farmers receiving adequate support from public sector research and extension. Given the will, non-governmental organizations (NGOs) can play a very effective role in small farmer agricultural development. 'World Neighbours' - a small private voluntary agency working with a wide variety of local, national and international organizations in several countries (Guatemala, Colombia, Mexico, Indonesia, India) has shown that it is indeed possible to significantly increase agricultural productivity of even very small farmers provided the right approach is adopted. Effective agricultural improvement work grows out of years and years of trying one approach after another, of searching constantly for new, more effective ways of working. 

The world neighbours approach to small farmer improvement - referred to as 'people centred agricultural development' has shown that families' basic grain yields could be tripled at a programme cost of less than US $400 per family. Even more significant, has been the ability of these farmers to continue to increase yields on their own after programme intervention. In one area, "15 years after programme phase out, yields had once again doubled". A 'World neigbours publication titled 'Two Ears of Corn' by Roland Bunch, contains the distilled wisdom of 30 years of struggle attempting to improve small farmer agriculture in several Asian, African and Latin American countries. 

These experiences can be very valuable for Sri Lanka at the present time. As such, this article attempts to highlight some of the most important learning points contained in the 'World neighbours' publication. 

Programme goals 'The goal of an agricultural development programme should be, on the one hand, to train and motivate the farmers to teach each other the innovations introduced and, on the other, to teach them how to improve on these innovations by themselves. In short, the goal should not be to develop the people's agriculture, but to teach them a process by which they can develop their own agriculture." 

Programmes that teach only technological innovations are destined to either become permanent fixtures in the area, or pull out, leaving the people to gradually slide back to their previous levels of production.

Start smal

"A great deal of heartbreak which in the past has too often turned over-optimistic idealists into later cynics, would be avoided if those who wish to help in agricultural development could learn to be content to do good slowly.

Small and simple programmes can play a unique, invaluable role in small farmer agricultural improvement. They can meet specific needs of specific cultures, markets and microclimates and can build upon existing local resources such as traditional knowledge, exceptional leadership or indigenous forms of organization. They have the flexibility to be creative and respond to changing needs without bureaucratic delays. 

Organizing large and complex programmes makes meaningful villager participation impossible. Once this error is committed, programmes invariably take one of two courses of action. The first is that of outsiders running the programme in perpetuity. Local representation may be set up, but the real power behind the throne remains in the hands of outsiders. The second alternative is to turn the programme over to villagers before they are at all capable of running it. 

"The result, whether it be a Caribbean canning operation, a rabbit co-operative in Guatemala, or a fishing co-operative in India, is invariably the collapse of the work within a year or, perhaps even worse, the survival of the work through ever-deepening crisis until the leaders finally give up in humiliation and exhaustion." Being more flexible, small programmes can change in response to villagers' feed back, making villagers feel that their participation is valuable and thereby motivating them to participate more. "Large programmes run the risk of being poured in concrete before the wrinkles are worked out. 

They wind up either living with the wrinkles for a long time, or spending a lot of extra time and money to smooth out hardened concrete".

Avoid handouts

Give-aways (handouts) can blind people to the need of solving their own problems. "When the only progress villagers see is accompanied by handouts, villagers can easily become convinced that they are incapable of making progress by themselves. This feeling of inadequacy, in turn, creates dependency and subservience, robbing people of their self-respect." 

Likewise, doing things for people, also creates a sense of dependency and inadequacy. "The 'please, won't you give us something?' changes to the equally obsequious 'Please, won't you do something for us'?" The helplessness and dependency are the same. On the other hand, programmes must do something for the people. If the people were able and willing to solve all their own problems by themselves, they would have done so long ago. "We should do only those things that the people cannot, or in the beginning, will not do themselves.

If we are to avoid the paternalism of giving things or doing things for people, we must motivate the people to do for themselves by creating enthusiasm.

Creating enthusiasm

Enthusiasm, in the present context, is the determination, drive, commitment, motivation and the desire or willingness to work in order to reach a goal. It is the basic dynamic of any true self-help programme. It may be created and made to flourish by ensuring the following:

(i) A programme that works towards solving 'felt needs'. The people must want the problem being worked on to be solved.

(ii) The people must believe in their ability to solve the problem. That is, the solution must be simple and inexpensive enough to be perceived as within their means.

(iii) The programme personnel must achieve credibility in the eyes of the people - i.e., know enough to competently help the farmers, and also convince the farmers that they are genuinely working for the farmers' benefit (rather than to cheat or manipulate them).

(iv) The people must participate in programme planning.

(v) They must participate in the programme's work, so that when success is achieved, they feel a sense of achievement.

Limit the technology

"It is better to teach one idea to hundreds of people rather than hundreds of ideas to one person" . 

"In many cases a small and simple change in farming practice may be most strategic in removing bottlenecks and providing a basis for accelerated development". When we work with only one or two practices, we can select those that combine simplicity and low risk with major increases in productivity. In this way we have the best chance of achieving a high rate of success. 

The programme gains credibility not only because of its success, but also because it wastes little of its own or the peoples' effort on less effective innovations". Extensionists teaching twenty different practices cannot dedicate enough time or energy to any one practice. Thus the people are often neither sufficiently convinced nor sufficiently well informed about any one practice to do it well.

Appropriate technology

'World Neighbours' experience has shown that the following questions need to be asked in selecting appropriate technologies: 
(1) Does the technology meet a felt need? "Agricultural programmes have too often scratched where there wasn't any itching." If people are to adopt a programme innovation, they must become convinced that it meets an important felt need.

(2) Is the technology financially advantageous? Farmers, even subsistence farmers, become interested in an innovation only to the degree that it promises them a substantial and dependable increase in either food supply or income at local prices.

(3) Does it bring recognizable success quickly? If a programme's first technology does not produce a recognizable success within one or two years, the programme may run into serious problems. Not only will the programme lose momentum, but also its credibility may be called into question.

(4) Is the technology relatively free of risk? If a rich man's crop fails, he merely draws down his bank account, or takes out another loan. When a poor man's crop fails, he may go hungry. Poor farmers simply cannot afford to take the same risks that more prosperous farmers do.

(5) Is the technology culturally acceptable to poor farmers?

(6) Is the technology simple to understand?

(7) Is the technology aimed at adequate markets? 

- Are market prices adequate and reliable? 
- Is the market available to small farmers? 
- Does the market have sufficient depth?

(8) Is the technology safe for the area's ecology? 

(9) Can the technology be communicated efficiently? Is the technology simple to teach? Simple technologies require less time and effort to teach. Simple technologies are also learned sooner and spread faster. Simple technologies result in fewer failures and allow modification without being discarded as a whole.

(10) Does it arouse enthusiasm among farmers? "Technologies that fail to arouse the people's enthusiasm will spread only as far as the paid extensionists personally take them, whereas those that do create enthusiasm will spread with phenomenal rapidity from one individual to another with very little outside stimulus".

Farmer experimentation

Motivate and teach farmers to experiment with new technologies on a small scale, thereby reducing the risk of adoption and providing a means for them to continue to develop, adapt and adopt new technologies in a permanent scientific process of innovation. Use rapid, recognizable success in these experiments, rather than artificial incentives or subsidies to motivate farmers to innovate. As a rule, recognizable success will come sooner with crops already familiar to the people.

As farmers experience success with one innovation, they gain trust in the programme and in the process of change itself. They gain sophistication, self-confidence and enthusiasm for trying more innovations. Each step forward, successfully taken, makes more steps possible.

Critical mass

People in traditional communities are accustomed to living in an environment of consensus. With regard to most issues of life - customs, values, beliefs, ways of doing things - they enjoy a high degree of consensus. This consensus is comforting, it reduces psychological tension, and it is probably an important factor in the oft-observed sense of dignity and self-worth among traditional villagers. A lack of consensus produces anxiety. It is painful.

"The percentage of people in a community that must experience success with an innovation to turn the tide of consensus in favour of the innovation instead of against it, is what we call the critical mass. 

If fewer than this number of people in a village adopt a given innovation, it will tend towards extinction. However, then the number of successful adopters reaches the critical mass, the pressures in favour of the practice outweigh those against it. Gradually the innovation spreads through the community spontaneously until its use is virtually universal."

In a given culture, it will vary according to the influence of the adopters and the simplicity, advantageousness, and ease of adoption of the innovation. "It can be surprisingly consistent within a given culture. The experience of several programmes in Latin America indicates that the critical mass normally varies between 25% and 45% of the community."

Farmer extensionists

Limit the number of external professionals (programme extensionists) and pay greater attention to developing villager extensionists (farmer extensionists).

Farmer extension-sts have a number of advantages over outsiders as extensionists. They understand the people with whom they are working. Being of the same culture, they have a "feel" for the villagers an intimate understanding of their feelings and reasons behind their actions. Having been poor themselves, they understand the villagers' economic problems and priorities. They also speak the same language and use their vocabulary. "City language, especially technical language and that of the universities, can be as unintelligible to villagers as a foreign language''

Villagers also often work harder at extension work than outsiders. They are accustomed to manual labour and walking long distances through wind, rain and mud - important for working in isolated areas where the need is greatest. They identify more closely with the villagers' hardships than outsiders. They are also more accessible as they live close at hand.

Farmer extensionists also can show their fellow villagers (students) that they have already done what they are urging their students to do. When an outsider plants a field as a demonstration, villagers may say, as they do of experiment stations, "we could do that too if we had the money he has". But villager extensionists can tell their students "you can do this, because I did it, too".

Perhaps the most important factor in engaging villager extensionists is that employing villagers is in keeping with the primary goal of our work - teaching villagers how to solve their own problems through the process of learning by doing. If villagers are to learn to solve their own problems, they, not outsiders, must be the ones who do solve them.

It works

'World Neighbours' has found the simple methodology described above to be highly effective in improving the productivity of small farmers on three continents - Asia, Africa and Latin America. In fact, this methodology achieves more than mere agricultural improvement. 

By using agricultural improvement (a widely present 'felt need') as an entry point, it sets in motion a process that provides a series of skills and attitudes that will enable the people to improve their own wellbeing in many aspects of life - from income generation to organizational management and health improvement, and from employment creation activities to home betterment. The methodology is particularly suited to the NGO sector. It does not need much money, but it does require considerable flexibility and patience on the part of both donor and implementing agency, and a high degree of professionalism and commitment on the part of programme personnel.

The author has had over thirty years experience in small farmer oriented agricultural development programmes in Sri Lanka and other Asian countries. He has also personally experienced the realities of smallholder agriculture operating a two hectare farm in the dry zone for ten years. He holds a Masters degree in Agriculture.

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