Introduction Sri Lanka is facing a severe food security crisis. Food price inflation drastically increased in over a year with year-on-year food inflation peaking at 94.9% in September 2022, one of the highest in the world. This sharp increase in food prices reduced access to nutritious food, especially for the poor and vulnerable who have lost income and livelihood due to economic disruption during the COVID-19 pandemic and the ongoing economic crisis. As a result, one in three Sri Lankan, or 6.2 million people, are food insecure and in need of assistance.[1] In response to escalating food insecurity, Sri Lanka’s development partners, including the Asian Development Bank (ADB), are supporting multi-pronged interventions, working in collaboration with each other and the private sector to address the multifaceted challenges facing the country. Causes of Food Insecurity The food security crisis in Sri Lanka is a result of the convergence of global and domestic factors. Global supply shocks emanating from pandemic-related lockdowns, and uncertain climate conditions, among others, were already causing significant increases in global food, fertilizer, and fuel prices in 2021. The Food and Agriculture Organization’s (FAO) annual food price index reached a 10-year high in 2021.[2] In early 2022, the Russian invasion of Ukraine caused a further sharp increase in global food and fuel prices, which was reflected in the monthly FAO food index, reaching a record high in March. On the domestic front, the decision of the Government of Sri Lanka to ban imports of chemical fertilizers and pesticides in May 2021 resulted in the sharp decline in the production of key agricultural products. For example, production of paddy, the main staple food, is forecast to drop by 42% to 3 million tonnes in 2022 from the previous year (footnote 1). Although the ban was lifted in December 2021, shortages and high prices of fuel, fertilizers, and other agricultural inputs continued to negatively impact crop yields this year, and increased import requirements. However, importing essential items is difficult because of low foreign currency reserves and low confidence of international suppliers and banks to assume Sri Lanka’s credit risk. Food price inflation and livelihood disruptions reduced the purchasing power of households. As per the findings of the FAO and World Food Programme’s (WFP) Crop and Food Security Assessment Mission 2022 (footnote 1), 61% of households in Sri Lanka have resorted to food-based coping strategies due to lack of adequate food or money to buy food. Nearly 40% of households were not consuming an adequate diet, and close to 50% of households reported limiting their meal portion sizes. These include low-income and less educated households, larger families, and daily wage laborers. Holistic and Integrated Interventions The food security situation in Sri Lanka is multifaceted and requires coordinated interventions. Recognizing this, ADB is working closely with the government, private sector, and other development partners, including World Bank, WFP, FAO, United Nations Children’s Emergency Fund (UNICEF), and the Government of Japan, to ensure complementarity of actions. Interventions are closely aligned with the six priority goals of the International Financial Institution (IFI) Action Plan to Address Food Insecurity[3]: (i) supporting vulnerable people, (ii) promoting open trade, (iii) mitigating fertilizer shortages, (iv) supporting food production now, (v) investing in climate-resilient agriculture for the future, and (vi) coordinating for maximum impact. Financial support for temporary income, consumption assistance, and livelihood development. Cash transfers are often one of immediate policy measures to augment social safety nets in the face of crises, such as food insecurity. Countries with strong social safety nets should use temporary and targeted cash transfers to lessen the impact of the crises on the most poor and vulnerable, while countries where social safety nets are not strong enough should attempt to expand the coverage of their existing program by increasing benefit levels and coverage.[4] While Sri Lanka has social safety net programs, there are identified weaknesses around the selection, monitoring and evaluation, and updating of beneficiaries; the grievance redress mechanism; and cash delivery mechanism. With funds repurposed from ongoing projects, ADB is helping the government improve the existing programs in collaboration with other development partners through the Food Security and Livelihood Recovery Emergency Assistance Project. To compensate for the sharp rise in the prices of food and other essentials, the project is supporting a temporary increase in the benefit level and the number of beneficiaries (i.e., pregnant and lactating women and malnourished children) for at least 3 months. It will also upgrade livelihood development programs for low-income families and incentivize farmers to engage in food production with financial support. It supports the further development and resilience of the agriculture sector through various initiatives, such as training, certification, and an IT platform with a focus on climate-smart agronomic advisory services. As of 12 December, ADB has disbursed $171.5 million under the project, which reached 3.1 million low-income families and disadvantaged individuals (elders, people with disabilities, and chronic kidney disease patients). The project is aligned with priority goals (i), (iv), (v) and (vi) of the IFI Action Plan. Support agricultural production. ADB recently repurposed an ongoing project, the Mahaweli Water Security Investment Program, to support the importation of Muriate of Potash (MoP), a fertilizer that is essential for growth of crops, such as rice and maize. Repurposed funds will also provide agricultural inputs to encourage farmers to grow high-value crops. It is aligned with goals (iii), (iv), (v), and (vi) of IFI Action Plan. Facilitate international trade. Through the Trade and Supply Chain Finance Program, ADB is facilitating international trade in Sri Lanka and supporting the importation of essential items, such as food, fuel, and fertilizer as well as inputs that support export production, which will directly and indirectly address food security challenges. Over the last 18 months, the program has supported the importation of $75 million worth of staple food, fertilizer, and animal feed, all critical for Sri Lankan farmers and food security. The program is aligned with goals (ii), (iv) and (vi) of the IFI Action Plan. ADB is also exploring further support to agribusiness companies to import essential items for food production. To complement and expedite the mobilization of repurposed funds for the importation of essential goods, including agricultural inputs, ADB also established an emergency trade finance facility. This is not a new lending or guarantee facility but an innovative initiative for scaled-up collaboration within ADB to utilize the trade finance program’s existing guarantee products as tools for addressing credit risks of national banks in procuring imported goods. ADB’s strategy to support food security in Sri Lanka uses different interventions linked to short- to long-term solutions. The cash transfer program augments the income of the poor and vulnerable and focuses on immediate need, while supports to facilitate agricultural production through direct inputs (such as fertilizer) and capacity building are adopting a medium- to long-term approach. In the meantime, the Trade and Supply Chain Finance Program works with the private sector to facilitate international trade. As the food security crisis continues to escalate in Sri Lanka, ADB will continuously assess the situation, together with the government and other development partners, and adapt interventions accordingly. [1] FAO/World Food Programme. 2022. FAO/WFP Crop and Food Security Assessment Mission (CFSAM) to the Democratic Socialist Republic of Sri Lanka - September 2022. [2] Food and Agriculture Organization. World Food Situation. [3] African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, International Fund for Agricultural Development, International Monetary Fund, and the World Bank Group. 2022. International Financial Institution (IFI) Action Plan to Address Food Insecurity. 18 May. Washington DC. [4] D. Amaglobeli et al. 2022. Response to High Food, Energy Prices Should Focus on Most Vulnerable. IMF Blog. International Monetary Fund. Resources Asian Development Bank (ADB). Emergency Assistance Webpage for Sri Lanka. ADB. Food Security and Livelihood Recovery Emergency Assistance Project in Sri Lanka. ADB. Mahaweli Water Security Investment Program in Sri Lanka. ADB. Trade and Supply Chain Finance Program. African Development Bank, ADB, European Bank for Reconstruction and Development, Inter-American Development Bank, International Fund for Agricultural Development, International Monetary Fund, and the World Bank Group. 2022. International Financial Institution (IFI) Action Plan to Address Food Insecurity. 18 May. Washington DC. D. Amaglobeli et al. 2022. Response to High Food, Energy Prices Should Focus on Most Vulnerable. IMF Blog. International Monetary Fund. Food and Agriculture Organization (FAO). World Food Situation. FAO/World Food Programme. 2022. FAO/WFP Crop and Food Security Assessment Mission (CFSAM) to the Democratic Socialist Republic of Sri Lanka - September 2022. Ask the Experts Asako Maruyama Senior Education Specialist, Human and Social Development Sector Office, Sectors Group, Asian Development Bank Asako Maruyama has worked for over 20 years in Africa, Asia, Latin America, and the Caribbean in education, employment and social security, public sector management, science, technology, and innovation with Inter-American Development Bank, JICA, UNESCO, and the World Bank. At ADB, she led projects in Mongolia and the People’s Republic of China, and currently manages projects in Bangladesh, India, and Sri Lanka, covering all levels of education, TVET, and social protection. She holds a PhD from the University of Tokyo. Neha Noronha Investment Specialist, Private Sector Operations Department, Asian Development Bank Neha Noronha is the relationship manager for ADB’s Trade and Supply Chain Finance Program in South Asia and the Pacific, which works toward closing market gaps for trade finance to support economic growth, jobs, and development from trade. Prior to joining ADB, she was in corporate and institutional banking focusing on trade finance and risk management. She has an Economics degree from St. Stephen’s College, University of Delhi and a Master’s in Economics from the University of Melbourne. Sanath Ranawana Director, Agriculture, Food, Nature, and Rural Development Sector Office, Sectors Group, Asian Development Bank Sanath Ranawana has over 25 years of work experience with international development organizations (ADB, World Bank, and UNEP) in agriculture, natural resources, environment, and rural development (ANRD) sectors. He holds masters’ degrees from the University of North Carolina at Chapel Hill and the University of Texas at Austin and an undergraduate degree from the State University of New York, College of Environmental Science and Forestry. Santosh Pokharel Senior Private Sector Development Specialist, South Asia Department, Asian Development Bank Santosh Pokharel leads ADB’s private sector development work in Sri Lanka. He has over 12 years’ experience in emerging and frontier markets in different institutional environments (multilateral banks, private sector, and academia). At ADB, he was with the trade and supply chain finance team before working in the urban and water sector. Prior to ADB, he was with the International Finance Corporation. He has a graduate degree in Economics from University of Virginia and is a chartered financial analyst. Asian Development Bank (ADB) The Asian Development Bank is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 69 members—49 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. Follow Asian Development Bank (ADB) on Leave your question or comment in the section below: View the discussion thread.