Sri Lanka’s Food Systems and Climate Risk: Building Resilience Across Supply and Value Chains

October 16, 2020


Industrial farming and related supply chains have been successful in producing mass quantities of food for the global population in a cost effective and efficient manner, and these practices have been adopted by most countries, including Sri Lanka. However, these farming and food systems create a number of significant issues such as complex value and supply chains that are extremely fragile, increased contribution of greenhouse gas emissions, issues with market allocation of food, increased waste production, and the destruction of agricultural lands and ecosystems. 

On a global scale, approximately a quarter of food produced goes uneaten due to losses and wastage along the food supply chain, while nearly one billion of the world’s population is in chronic hunger. This clearly indicates an allocation problem that can be attributed to market failure and inefficiencies in how food is harvested, stored, processed, and transported. Moreover, with global warming and the resultant rising heat, droughts, and flooding, agricultural lands are at risk, and the COVID-19 crisis has highlighted the inefficiencies of existing supply chains. It is evident that there must be significant efforts on a global scale to ensure that food systems are resilient and able to withstand and recover from disruptions, ensuring a sufficient supply of food.

In Sri Lanka in particular, 1.7 million individuals are considered undernourished, which is approximately 8% of the population. Undernourishment is most common amongst children under the age of 5 years, with Sri Lanka having one of the highest rates of acute malnourishment within this age group in the world. Malnutrition is also prevalent among mothers, and sectorally is most visible in the estate sector. Simultaneously, approximately 30% of all food produced by the agriculture, fisheries, and livestock sectors is wasted due to inefficient production, consumer wastage, and transport and distribution issues. In light of the changing climate and other crisis situations such as COVID-19, it is important to gain insight into the functioning of Sri Lanka’s food system and its supply chains to understand the existing issues and potential solutions to ensure food and nutritional security within the country.

Analysis of Food Systems and Supply Chains in Sri Lanka 

Sri Lanka’s food system comprises locally produced and imported food, accounting for 78% and 22% of domestic food consumption respectively. A majority of the domestic requirement of rice, meat, eggs, fish, vegetables, and fruit is produced locally. However, significant portions of wheat, canned fish, pulses, milk powder, sugar, and vegetable oil are imported into the country from India, China, United States, Thailand, and Ukraine. 

Sri Lanka has been experiencing inefficiencies within its food systems for many years due to the complex nature of the supply and value chains that involve many intermediaries and intermediary processes. The COVID-19 pandemic in particular highlighted the vulnerabilities of Sri Lanka’s food systems. Distribution channels collapsed during the curfew period, food shortages in certain areas ensued, and rising food prices and price gouging were visible. Moreover, import restrictions were implemented, including restrictions on specific essential goods. This caused further shortages and affected the food production sector in the country as the import of inputs to the food system was halted, resulting in shortages of goods like veterinary medicine, chemical fertilizers, and high quality seeds. Whilst Sri Lanka has not experienced island-wide food shortages within the last decades, crises such as this can have detrimental effects on the livelihoods, nutrition, food security, and wellbeing of farming communities. 


The agricultural sector contributes approximately 7% of the Sri Lankan Gross Domestic Product (GDP) while employing roughly 25% of the workforce. It is a key sector for Sri Lanka not only for economic but also for sociocultural reasons, and it comprises a complex system of farmers, intermediaries, consumers, and other stakeholders.

In general, the agricultural supply chain functions as visible below:

Input suppliers → Farmers → Traders → Food Companies → Retailers/Exporters → Consumers

There are four types of agricultural value chains:

  1. Disintegrated or market-based value chains - Fragmented systems where exporters and processors have no contact with international markets. There is a gap in the flow of information.
  2. Weakly linked value chains - Auctions are frequently used in these value chains, and pricing is very transparent. This is commonly seen in the tea sector in Sri Lanka.
  3. Strongly linked or relational chains - Agents are linked through commercial connections, and there is a transfer of knowledge in both directions. This is often seen in the fair trade and organic sectors. 
  4. Vertically-integrated chains - Agents identify as belonging to supply chains, and there are significant interactions among these agents. Food supply activities such as processing and exporting are all conducted by the same company in these chains.

Middlemen or collectors in the agricultural supply chain are generally viewed negatively as they are considered to be unnecessary additions to the supply chain, increasing supply costs. Further, they can also be considered a barrier in terms of upstream and downstream knowledge transfer. They create an asymmetry of information and leave farmers lacking in knowledge on market functions. Nevertheless, they are crucial for the purpose of bundling and transporting agricultural produce, and coordinating demand and supply between farmers and retailers.

The agricultural sector and its supply and value chains experience many issues that threaten the food security of Sri Lanka:

  • Stagnating crop yields and declining productivity, which are worsened by climate impacts such as droughts and floods. This brings into question the possibility of achieving the Sustainable Development Target of doubling agricultural productivity (SDG 2, target 2.3).
  • Restricted access to agricultural inputs such as fertilizer and seeds, especially during COVID-19, as well as a lack of infrastructure and restricted labour movement is affecting agricultural production in the country. Further, inefficiencies in supply and value chains lead to loss and wastage. It has been estimated that approximately 30-40% of agricultural crops are wasted along the value chain. 
  • High food miles due to complex supply chains. For example, brinjals reach Colombo from other parts of the country, only to be redistributed throughout the Western province. Not only is this costly, but it can result in further damage to the produce.
  • Rising prices of agricultural produce due to volatile weather patterns, which are a result of climate change, as well as frequent changes of import taxes and non-tariff barriers. 
  • Extremely underdeveloped market information systems. There is a lack of data due to weak planning mechanisms and a lack of functioning forward contracts, which creates a mismatch between demand and supply. Farmers lack knowledge and access to market data, which would provide an indication on what they should cultivate.
  • Difficulty for small scale farmers to compete in the domestic and international markets.
  • Existence of significant unregistered farming and informal labour, particularly performed by women. 

Fisheries and Aquaculture

The fisheries and aquaculture sector supply chain involves input suppliers, coastal, freshwater, and deep sea fishers/fishermen, wholesalers and retailers, local/regional fish markets, export processing centres, and consumers. The sector contributes approximately 2% of the Sri Lankan GDP with a workforce of nearly a million individuals. Fisheries provide a significant portion of animal protein to the Sri Lankan diet and are the primary protein source for many communities.

A number of major issues within the fisheries and aquaculture supply chains are highlighted below:

  • Reduction in coastal fisheries stocks due to climate change induced weather changes and overexploitation.
  • Lack of a proper pricing mechanism that reflects the value addition along the supply chain.
  • Lack of proper post-harvesting techniques to maintain the quality and nutrition levels of the harvest.
  • The supply chain is controlled by a few major players such as traders and exporters. Further, there is a large number of middlemen within the supply chain, which results in increases in price without a significant value addition.
  • There is significant informal labour performed by women, especially in terms of fish processing. 


Poultry and dairy farming are the primary livestock-related productions that take place in Sri Lanka, with poultry accounting for 50% of livestock GDP. This sector has many stakeholders in its supply chains including input suppliers, cattle/poultry rearing farmers, collecting and chilling centres, processing centres, packaging and marketing centres, and consumers.

Sri Lanka’s livestock sector is plagued by many problems:

  • Climate-related impacts from temperature increase, droughts, floods, depletion of freshwater, storms, and pests and diseases. 
  • Diminishing grazing land due to overexploitation and the effects of climate change. 
  • Lack of technical knowledge, particularly in relation to the biological risks associated with livestock and proper waste management techniques. 
  • Rising losses and waste during the transportation and distribution process.

As is evident when considering the three primary food production sectors in the country, farming practices and supply and value chains in Sri Lanka are already experiencing several weaknesses and inefficiencies. Climate disasters and crises such as COVID-19 only worsen these structural issues, compromising food security and hurting both consumers and agricultural operators. Accordingly, a transformation of the Sri Lankan food system and its supply chains is vital. 


Transforming the Sri Lankan food system into a resilient and regenerative food system is key to maintaining the sustainability of food production and ensuring food security within the country.

The regenerative property indicates transitioning from a food system that is carbon intensive to one that functions as a circular, carbon-negative economy with closed loops of energy and nutrients. The transition to regenerative food systems has begun on a global level, as is indicated by the Regenerative Organic Standard (ROC) launched in 2017. Creating a regenerative food system in Sri Lanka is vital to ensure food security whilst also repairing damaged ecosystems and protecting the livelihoods of those in the food production sector. Ensuring the resilience of local food systems involves strengthening food production and supply chains to withstand and recover from disruptions such as climate disasters and other crises, ensuring a sufficient supply of food for domestic consumption.

Specific activities that can be undertaken to enhance the sustainability and security of Sri Lanka’s food systems and promote regenerative and resilient production include:

  • Empowering smallholder farmers, with consideration for women farmers in particular. This includes providing better access to good quality seeds and fertilizer, investing in local supply chains, and improving access to agrarian knowledge.
  • Practicing intercropping and agroforestry and ensuring crop and seed diversification, including the promotion of drought- and flood-resilient crop varieties.
  • Implementing community-based climate adaptation measures.
  • Restoration and management of agricultural ecosystems including tank restoration and water and soil management. 
  • Implementing climate change mitigation programmes with the aim of reducing carbon and other greenhouse gas emissions within the food production sector, for example through regenerative agriculture.
  • Facilitating capacity building programmes to educate the fisheries and livestock sectors on sustainable fishing and animal-rearing practices. 
  • Promoting local breeding and awareness on disease management for the livestock sector.
  • Providing market data to all stakeholders in food supply chains.
  • Strengthening and improving loan and insurance facilities by the government and developing additional risk transfer mechanisms as needed.
  • Improving technology and infrastructure to minimize supply chain losses and implementing a digital food and nutrition surveillance system. 

Through the implementation of these strategies, Sri Lanka can work towards establishing a regenerative and resilient food system that can adapt to climate-related issues, contain the effects of other disruptions, protect food system livelihoods, and ensure food and nutritional security for the country’s population. 


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