Sri Lanka: Food Security and Livelihood Recovery Emergency Assistance Project

Sovereign Project | 56175-001

The Government of Sri Lanka requested emergency assistance in May 2022 in response to a food insecurity crisis in the country to ensure access to food and protect livelihoods for the poor and vulnerable. From May 2022 to date, food security and livelihoods have continued to deteriorate, and the emergency is expected to worsen through 2022 and into 2023. Against this background of a national emergency, the project aims to improve food security and protect the livelihoods of the poor and vulnerable nationwide, especially women and children, by expanding direct financial support to compensate for food price increases, supporting livelihood development activities to counteract food shortages and income losses, and enhancing social protection systems to ensure that the project reaches its intended beneficiaries and to strengthen responsiveness to future emergencies.

Project Details

  • Project Officer
    Maruyama, Asako
    South Asia Department
    Request for information
  • Country/Economy
    Sri Lanka
  • Sector
    • Public sector management
Project Name Food Security and Livelihood Recovery Emergency Assistance Project
Project Number 56175-001
Country / Economy Sri Lanka
Project Status Active
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 9229-SRI: Food Security and Livelihood Recovery Emergency Assistance Project
Japan Fund for Prosperous and Resilient Asia and the Pacific US$ 3.00 million
Loan 4205-SRI: Food Security and Livelihood Recovery Emergency Assistance Project
Ordinary capital resources US$ 200.00 million
Loan: Food Security and Livelihood Recovery Emergency Assistance Project
World Bank US$ 275.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development

Public sector management / Social protection initiatives

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The Government of Sri Lanka requested emergency assistance in May 2022 in response to a food insecurity crisis in the country to ensure access to food and protect livelihoods for the poor and vulnerable. From May 2022 to date, food security and livelihoods have continued to deteriorate, and the emergency is expected to worsen through 2022 and into 2023. Against this background of a national emergency, the project aims to improve food security and protect the livelihoods of the poor and vulnerable nationwide, especially women and children, by expanding direct financial support to compensate for food price increases, supporting livelihood development activities to counteract food shortages and income losses, and enhancing social protection systems to ensure that the project reaches its intended beneficiaries and to strengthen responsiveness to future emergencies.
Project Rationale and Linkage to Country/Regional Strategy

Food price inflation reached 58.0% year-on-year in May 2022 and soared to 75.8% in June 2022. During the month of June 2022 alone, significant increases have been recorded in food prices (7.25%). The food insecurity emergency has been caused by the convergence of multiple factors. A sharp rise in food and fuel prices globally beginning in March 2022 (caused by the Russian Federation's invasion of Ukraine) has aggravated rising prices of imported basic food items and locally produced food commodities in Sri Lanka that began in 2021 and has increased the cost of living and reduced access to nutritious food, especially for the poor and vulnerable. The spike in food and fuel prices has coincided with ongoing struggles to recover from the coronavirus disease (COVID-19) pandemic, which left a significant portion of the population with reduced incomes and savings due to employment losses and disruptions. Fuel shortages and daily power cuts since March 2022 have been triggering further disruptions in daily lives, livelihoods, and domestic supply chains, particularly related to agricultural products, contributing additionally to income losses, food price hikes, and food shortages. As a result, about 38% of households or 6.3 million people (3.3 million women and girls) are facing moderate or severe food insecurity, with 65,600 people considered as severely food insecure.

Household expenditure on food has jumped sharply to around 75.0%, compared to 35.1% in 2019. Households have coped with rising food prices and income losses by reducing their food consumption and/or purchasing cheaper but less nutritious food. About 95.0% of households are eating less preferred or less expensive food, 83.0% limiting the portion size of meals, and 66.0% reducing the number of meals per day. The prolonged increase in food prices, which started to rise in 2021 and are expected to increase further in 2022-2023, is aggravating malnutrition among vulnerable households, with detrimental impacts on health, especially of children. Even before the pandemic, low-nutrition diets among children were prevalent, resulting in high child undernutrition rates, with significant prevalence among children under five years of age of stunting (17.3%), wasting (15.0%), and underweight (20.5%).__

Since the start of the pandemic, household economies have come under severe strain and their emotional, psychological, and social well-being has diminished. Consequently, gender-based and domestic violence and high-risk child protection incidents (e.g., sexual assault, physical abuse, and child negligence) have increased significantly, with growing numbers of women and children requiring protection and services. Many cases of domestic violence and child protection remain unreported, due to lack of effective outreach and support mechanisms._

A worsening agricultural crisis also contributes to the livelihood, food, and nutrition insecurity. The crisis is affecting 2.2 million people who engage with agriculture (27.1% of the employed population)._Until the 2020-2021 cultivation season, chemical fertilizers were heavily subsidized in Sri Lanka, leading to excessive application of fertilizers, soil degradation, and groundwater pollution. The government banned imports of chemical fertilizers and pesticides in May 2021 without adequate preparation and farmer training, resulting in rice and maize production losses of 50%-60% in 2021-2022. Although the ban was lifted in November 2021, shortages and high prices of fuel, fertilizers, and other agricultural inputs have negatively impacted crop yields in 2022 and increased import requirements, especially of rice (Sri Lanka was previously self-sufficient in rice). Exorbitant costs of agricultural inputs and lower yields have forced farmers to move out of the sector in search of employment and other livelihood opportunities. Lack of timely supply of fertilizers and other agricultural inputs would result in lower crop yields in 2023, further exacerbating food insecurity.

Impact

Adverse effects of food insecurity mitigated (Prime Minister's statement on the roadmap to revive the economy)

Project Outcome
Description of Outcome

Food security and livelihoods of the poor and vulnerable, especially women and children, improved

Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Scaled-up and broadened direct financial support for the poor and vulnerable provided

Livelihood development activities of the poor and vulnerable better supported

Social protection systems enhanced

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The project activities will have no or very minimal environmental impacts. No civil works are anticipated.
Involuntary Resettlement The project activities will not involve civil works nor trigger land acquisition or involuntary resettlement.
Indigenous Peoples The scope of the project is nationwide and does not specifically target indigenous peoples. Indigenous peoples may participate in and benefit from the project activities. The project will not directly or indirectly affect the dignity, human rights, livelihood systems, or culture of indigenous peoples, or affect the territories or natural or cultural resources that indigenous peoples own, use, occupy, or claim as their ancestral domain.
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services All consultants will be recruited according to ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time). Two small consulting firm contracts and three individual consultant contracts will be financed by the JFPR grant. The consulting firms will be engaged using single source selection method and the individual consultants will be engaged using individual consultant selection method. All consulting service contracts will be subject to ADB's prior review.
Procurement Three goods (IT equipment) contracts and two IT product and service contracts (additional module development for the Samurdhi Customer Relationship Management system and second phase development of the GeoGoviya platform) are expected to be financed by ADB. The open competitive bidding (OCB) method will be used for ADB-financed goods contracts. All contracts to be procured using the OCB method will be internationally advertised, except one contract (automated teller machines) which will be nationally advertised. Due to the proprietary nature and the continuation of previous and/or ongoing contracts, the IT product and service contracts will be procured using the direct contracting method. All goods and IT product and service contracts will be subject to ADB's prior review.
Responsible ADB Officer Maruyama, Asako
Responsible ADB Department South Asia Department
Responsible ADB Division Human and Social Development Division, SARD
Executing Agencies
Ministry of Finance
Timetable
Concept Clearance -
Fact Finding 24 Jun 2022 to 08 Jul 2022
MRM 21 Jul 2022
Approval 30 Aug 2022
Last Review Mission -
Last PDS Update 30 Aug 2022

Grant 9229-SRI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Aug 2022 09 Sep 2022 16 Sep 2022 31 Aug 2024 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 3.36 Cumulative Contract Awards
ADB 0.00 16 Nov 2022 0.00 0.00 0%
Counterpart 0.36 Cumulative Disbursements
Cofinancing 3.00 16 Nov 2022 0.00 0.00 0%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Unsatisfactory Unsatisfactory - Unsatisfactory

Loan 4205-SRI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Aug 2022 09 Sep 2022 16 Sep 2022 31 Aug 2024 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 200.00 Cumulative Contract Awards
ADB 200.00 16 Nov 2022 59.96 0.00 30%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 16 Nov 2022 75.00 0.00 38%

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.


Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

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Tenders

No tenders for this project were found.


Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Replenishment of Advance (October 2022) Loan 4205 24 Oct 2022 Various | Sri Lanka Ministry of Finance 59,962,165.78