The Agriculture Sector Modernization Project


To support the Government of Sri Lanka in the modernization of the agriculture sector, the World Bank through a Credit from the International Development Association (IDA) is supporting the Agriculture Sector Modernization Project (ASMP).  


The development objective of the ASMP is to increase agriculture productivity, improve market access, and enhance value addition of smallholder farmers and agribusiness in the project areas. 


The project focuses on the demonstration of agriculture diversification and technology improvement for production and post-harvest value addition, value-chain development for higher value-added production and better market linkages, and income generation from agriculture.  The project also seeks to ensure that the agriculture modernization and diversification agenda is inclusive and poor farmers, including women, are enabled to benefit from investments into value addition, new skills and technology improvements, sustainable crop management, and new financing and marketing arrangements.


The project also aims to increasing private sector investments to the agriculture sector to strengthen the competitiveness of export oriented farmers and create the enabling conditions for smallholder famers in poverty stricken districts to move towards a more sustainable, resilient and productive agriculture.


The Project has three main components:


  • Component 1: Agriculture Value Chain Development, to promote commercial and export oriented agriculture.This component is implemented by Ministry of Primary Industries (MOPI).


  • Component 2: Productivity Enhancement, Diversification and Demonstration to support smallholder farmers to produce competitive and marketable commodities, improve their ability to respond to market requirements and move towards an increase in commercialization.It is implemented by Ministry of Agriculture (MOA).


  • Component 3: Project Management Component, supporting the above two components through support for human resource development, capacity building, monitoring and evaluation, communication and coordination of the overall project.


Under Component 1, the MOA envisages to implement the following sub-components:


a.    Investment Preparation Support

b.    Matching Grants to Farmer Producer Organizations and Agribusiness

c.    Partial Credit guarantee


Under sub-component b. supporting a matching grants program to attract and leverage investments from Farmer Producer Organizations (FPO) and Agribusinesses (USD 88.20 million, IDA USD 44.10 million). Matching Grants (MG) would be provided under two windows.


      I.      MG  of USD 5,000 up to USD 75,000

It would be provided for investments to be developed and implemented by FPO as parallel co-finance investment up to 50 percent of the total investment.


FPO should have registered under Sri Lanka’s Company Act no. 7, 2007, a minimum cash contribution of 10 percent of the total investment to be deposited in an account opened in the name of the organization in a licensed bank at the time of application, appointment of a qualified accountant and availability of commercial financing up to 40 percent of the total investment are the eligibility criteria to participate in the MG programs. More favorable MG co-financing terms would be provided for women-led FPOs.


    II.      MG  of USD 75,000 up to USD 500,000

It would be provided to agribusiness for agriculture and value chain investments. Established agribusinesses with a good track record or start-up agribusinesses with good development potential would be eligible to apply for and access the program.


For different investments the MG percent is vary and which is explained below,


Investment /USD

Matching Grant /USD

Matching Grant /USD

75000 - 150,000

50% of the total investment

75,000 – 150,000

150,000 – 500, 000

50% for the first 150,000, 35% of the tranche from 150,000 to US$ 500,000.

Up to 150,000

Up to 188,500

1, 000, 000

50% for the first 150,000, 35% of the tranche from 150,000 to US$ 500,000 & 20% for 500, 000 – 1, 000, 000

Up to 150,000

Up to 188,500

Up to 125,000

>1,000, 000

Maximum of 500, 000





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