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October 2003
Economic development and promotion of business: common denominator for stability and peace
A farmers’ company to operate the Seed Processing Centre in Kiliveddy, Muthur DS Division, which was officially opened in September 2002, was founded on 27 September 2003. Under the joint chairmanship of the Assistant Director of Agriculture, Mr S. Sivakumar and the Project Director of the Integrated Food Security Programme Trincomalee (IFSP), Mrs R. Singarayer, 90 farmers, from the Agriculture Ranges of Muthur, Thoppur, Sampoor, Kiliveddy, Munampaddithoddai and Eachchilampattai selected the board of directors. These 90 farmers, who are representing the local farming community are the founding shareholders of the new company, which will operate the Seed Processing Centre in a commercial manner.
The board of directors consists of seven members, two Muslims and five Tamils. The nomination and election included public statements of the candidates to fully comply with nine eligibility criteria established by the Department of Agriculture and IFSP, such as mobilising 2,000 shares at Rs. 10/- each from local farmers, residence of Muthur or Eachchilampattai DS Divisions, good writing and speaking skills, communicative talent, farming experience, managerial experience, competence and leadership, dedication, acceptance by the communities and non-political interests in particular.
The next steps are the formal registration of the Seed Paddy Processing Company on 10 October, followed by the initial board meeting on 15 October 2003, where the first business plan is to be presented.
It is the common understanding of the farmers that economic development and agri-business are pre-conditions for peace and stability. Only then access to credit for the procurement of advanced agri-technology and access to markets for better marketing are possible.
Complementing seed paddy processing, additional business options were recommended such as rice milling, producing rice flour, collection, canning and sale of honey, marketing of surplus milk, applying preservation techniques for available surplus of fruits, larger-scale cultivation of papaw and banana, cashew processing and marketing and trade of agricultural production means.
The Department of Agriculture and IFSP would provide further counselling and support during the initial stage of the company. The Seed Paddy Processing Company would further engage itself in mobilising loans from local banks for its shareholders.
Up to 27 September 2003 shares at a value of Rs. 299,000 were paid-in by 149 individual farmers. This shows the great interest of the farmers from the three communities to continue the seed paddy out-growing programme that was initiated by the Department of Agriculture. The paid-in share capital is to be used as working capital. IFSP will capitalise the value of the seed cleaning and sorting machine, which was supplied in the year 2002. The MPCS Muthur had made a full functioning building available, which is to be rented to the farmers’ company.
Altogether Rs. 4.1 million were invested including the base investment to initiate seed paddy production. Funding for the processing equipment and the initial seed paddy out-growing programme was provided by the Federal Republic of Germany through IFSP, which is assisted by the German Technical Cooperation, GTZ. During the 2003 season 25,000 kg of seed paddy were cleaned and sorted for certification by the Department of Agriculture. This quantity of certified seeds would allow to cultivate up to 900 acres of paddy lands.
The farmers and the officers from the Department of Agriculture and IFSP discussed the negative effects of the communal violence of April and May 2003. Since many farmers could not cultivate their paddy fields the overall Yala crop was poor and a large number of families were deprived of their seasonal income. The violence also affected the seed paddy out-growing programme of the Department of Agriculture and hence, the efforts to promote agri-business in the middle of the rice growing areas of Muthur, Seruvila and Eachchilampattai.
Mrs Singarayer and Mr Sivakumar explained that since May 2003 the Department of Agriculture and IFSP have undertaken tremendous efforts to encourage the Muslim and Tamil leaders to resume talks on how best to revive seed paddy out-growing and to commercially operate the Seed Paddy Processing Centre. Farmers from Muthur and Eachchilampattai visited seed processing companies in Anuradhapura and Akkaraipattu in July 2003 to learn from successfully established enterprises. By-laws for the new company are ready.
The founding members of the new farmers’ company concluded that pursuing common economic interests are vital for balanced development for all communities. They addressed possible initiatives such as the promotion of advanced technology for paddy cultivation, seed paddy production, crop diversification, marketing, establishing of a wholesale centre for agricultural trade next to the Seed Processing Centre or the rehabilitation of milk collection. Common economic interests, however, need to focus on the re-establishment of good neighbourhood amongst the three communities.
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