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Democratic Socialist Republic of Sri Lanka COUNTRY STRATEGY and PROGRAMME EVALUATION

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Democratic Socialist Republic of Sri Lanka COUNTRY STRATEGY and PROGRAMME EVALUATION Independent Office of Evaluation Democratic Socialist Republic of Sri Lanka COUNTRY STRATEGY AND PROGRAMME EVALUATION Independent Office of Evaluation Independent Office of Evaluation International Fund for Agricultural Development Via Paolo di Dono, 44 - 00142 Rome, Italy Tel: +39 06 54591 - Fax: +39 06 5043463 E-mail: [email protected] www.ifad.org/evaluation www.twitter.com/IFADeval IFAD internal printing services www.youtube.com/IFADevaluation Democratic Socialist Republic of Sri Lanka Country Strategy and Programme Evaluation June 2019 Report No. 5080-LK Document of the International Fund for Agricultural Development Photos of activities supported by IFAD-financed projects in the Democratic Socialist Repubilc of Sri Lanka Front cover: A young farmer cultivating moringa, Anuradhapura District. ©IFAD/Smallholder Agribusiness Partnerships Programme Back cover: One of over 700 microirrigation schemes rehabilitated under the Dry Zone Livelihood Support and Partnership Programme, implemented between 2005 and 2013. At this site (Mulathella Ela, Haliela Divisional Secretariat, Badulla District), the canal was rehabilitated in 2011 to serve 30 acres of land; it is regularly maintained by beneficiary farmers. ©IFAD/Fumiko Nakai (left); A beneficiary of a floriculture project supported by the Smallholder Agribusiness Partnerships Programme, Rathnapura District. ©IFAD/Smallholder Agribusiness Partnerships Programme This report is a product of staff of the Independent Office of Evaluation of IFAD and the findings and conclusions expressed herein do not necessarily reflect the views of IFAD Member States or the representatives to its Executive Board. The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of IFAD concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The designations “developed” and “developing” countries are intended for statistical convenience and do not necessarily express a judgement about the stage reached by a particular country or area in the development process. All rights reserved ©2019 by the International Fund for Agricultural Development (IFAD) Foreword The partnership between IFAD and the Government of Sri Lanka goes back a long way. Sri Lanka became a member of IFAD in 1977 and was IFAD’s very first borrower in 1978. This is the second country strategy and programme evaluation conducted by the Independent Office of Evaluation of IFAD in the Democratic Socialist Republic of Sri Lanka. The evaluation covers the period between 2004 and 2017, with the main objectives being to assess the results and performance of the IFAD country programme and to generate findings and recommendations to steer future partnerships. During the evaluation period, a number of significant events affected the country context as well as IFAD operations, most notably the tsunami in 2004 and the end of the internal conflict in 2009. These contextual factors affected the coherence of the country programme and made it challenging to achieve impact and influence. The thematic and geographic areas of IFAD investments have been diverse. There was a proliferation of projects but a lack of strategic direction during the middle part of the evaluation period in response to post-tsunami and post-conflict needs. Notwithstanding the diversity in interventions and weak coherence in the country programme, the evaluation found that IFAD-supported projects achieved tangible results especially in relation to agricultural production and productivity, through the upgrading or establishment of tea and rubber small holdings, irrigation development, improved technologies and extension services. The achievement in this regard was the most important pathway for increased incomes and assets. The projects also achieved some success in improving access to markets, finance and income diversification. On the other hand, the improvements in agricultural production were not necessarily driven by improved and innovative technologies to promote resource use efficiency (e.g. water and other agricultural inputs) or to strengthen climate resilience. In pursuing partnerships with agribusinesses, there was scope for more careful consideration on how to ensure added value of public funding. The performance of non- lending activities was generally weak with missed opportunities for the IFAD country presence between 2007 and 2016 to make contributions in this regard. During recent years the programme has consolidated its strategic focus around partnerships with the private sector and access to finance for agriculture commercialization. Looking ahead, it is important that projects be catalytic and leverage additional investments, and that non-lending activities play a more prominent role in the country programme. The next country strategy should have sharper strategic focus and coherence, and also better mainstream key priorities in the Sri Lankan context, i.e. climate resilience, nutrition and youth. In addition to improving the operations in agribusiness partnerships and rural finance, there is also a need to strengthen the poverty orientation and targeting strategy, especially in light of remaining pockets of poverty and income disparities. This evaluation report includes the Agreement at Completion Point, which contains the evaluation’s main recommendations and proposed follow-up actions, as agreed by the Government and IFAD. I hope that the results of this independent evaluation will be useful in strengthening the partnership for inclusive and sustainable rural development and poverty reduction. Oscar A. Garcia Director Independent Office of Evaluation of IFAD Acknowledgements This country strategy and programme evaluation was led by Fumiko Nakai, Senior Evaluation Officer, Independent Office of Evaluation of IFAD (IOE), with contributions from (in alphabetical order): Nihal Fernando (consultant – irrigation and water management, climate change adaptation and disaster risk management); Jegatheeswary Gunasingam (consultant – coastal resource management and coastal community development); Nanda Karunagoda (consultant - rural and microfinance); Susil Liyanarachchi (consultant - smallholder agriculture, rural livelihoods, poverty, gender and social inclusion); Shijie Yang (IOE Evaluation Analyst – rural poverty impact data and efficiency; leading the value chain study conducted for this evaluation); and David Young (senior consultant – portfolio performance assessment). Quantitative and qualitative data collection on selected value chains which preceded the CSPE main mission was led by Shijie Yang, with contributions from Manoj Thibbotuwawa (consultant – lead researcher) and Samanthi Bandara (consultant – researcher). Antonella Piccolella (consultant) conducted a desk review of secondary data and documentation. Sanuri Ratnayake (consultant) supported secondary data collection and analysis, data cleaning for the value chain study, as well as the coordination and analysis for the telephone survey on borrowers (bank loans) in collaboration with Nanda Karunagoda (consultant – rural and microfinance). Laure Vidaud, Maria Cristina Spagnolo, Emanuela Bacchetta – IOE Evaluation Assistants – provided administrative support. The evaluation benefited from an internal peer review within IOE. IOE is grateful to IFAD’s Programme Management Department – in particular, the Asia and the Pacific Division – for its collaboration on this evaluation. IFAD also takes this opportunity to express its appreciation to the Government of Sri Lanka for its cooperation throughout the evaluation process, including the organizational support it provided for field visits, and for co-organizing and supporting the national workshop held in Colombo on 13 March 2019. A special acknowledgement is extended to: the External Resources Department; the National Planning Department; the Presidential Secretariat; the Ministry of Plantation Industries; the Coast Conservation and Coastal Resource Management Department; the Department of Agrarian Development, Northern Provincial Irrigation Department; and the Central Bank of Sri Lanka. IOE also thanks all other partners and resource persons who gave their time to meet with the evaluation team and share their views. Contents Currency equivalent, weights and measures i Abbreviations and acronyms i IFAD-supported projects covered in the CSPE portfolio assessment ii Sri Lanka timeline: country events and IFAD activities iii Executive summary v Agreement at Completion Point xv I. Background 1 A. Introduction 1 B. Objectives, methodology and processes 1 II. Country context and IFAD's strategy and operations for the CSPE period 8 A. Country context 8 B. IFAD's strategy and operations for the CSPE period 19 III. The project portfolio 25 A. Project performance and rural poverty impact 25 B. Other performance criteria 57 C. Overall portfolio achievement 65 IV. Non-lending activities 67 A. Knowledge management 67 B. Partnership-building 69 C. Country-level policy engagement 73 D. Grants 76 E. Overall assessment 77 V. Performance of partners 79 A. IFAD 79 B. Government 81 VI. Synthesis of the country programme strategy performance 84 A. Relevance 84 B. Effectiveness 86 C. Overall assessment: country strategy and programme performance 88 VII. Conclusions and recommendations 89 A. Conclusions 89 B. Recommendations 90 Annexes I. Definition of the evaluation criteria used by IOE 92 a II. Ratings
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