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Local Empowerment through Economic Development and Reconciliation Project (LEED+) - Final evaluation

eval_number:

3552

eval_url:

https://webapps.ilo.org/ievaldiscovery/eval/3552

lessons_learned:

themes:

theme:

Global supply/value chains

category:

Enterprises

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comments:

The vulnerable people targeted by the Project, and the partner private sector entity.

challenges:

As already indicated, the interest on dried chillies production was based on import restrictions imposed by the Government. The annual country requirement of dried chili is around 55,000-60,000 MT; the local production is only about 5,000-7,500 MT c50,000-55,000 MT. With the improvements to economy, the Government is now contemplating reducing the import tax as local production of dried chillies is inadequate for consumption. The main challenge is the fluctuating green chillies prices (Fig. A). As would be seen, there is significant variation in the prices of green chillies. Production of 1 kg of dried chillies requires 5 kg of fresh (ripened) chillies. The cost of drying, including labour has been estimated at approximately LKR 100/kg. Thus the cost of production of 1 kg dried chillies is LKR 4,100/kg based on June 2023 green chillies prices (LKR 800/kg) (Table A). ausing a shortfall of about

success:

The positive aspect is the engagement of farmers through provision of inputs and extension services, and the assurance of buy-back of the produce.

context:

Enhanced interest in dried chillies production is a result of the Government’s ban/levying a high import tax on imported dried chillies. The private sector entity was assured a regular supply of dried chillies for their manufacturing. From their part, the private sector provided inputs (on a loan to be recovered from sales), extension support, and regular monitoring. The Project provided some equipment and driers. The precondition was that the farmers would sell their produce to the private company. The ‘loyalty’ of the farmers was not consistent; when the green chillies prices increased in the open market, some farmers would sell green chillies in the outside market surreptitiously. The private sector entity realised this problem, and allowed the farmers to sell part of their production in the open market (see: Good Practice # 5).

description:

The Project facilitated the establishment of the chilli value chain; the growers would cultivate chillies and dry it; the dried chillies would be purchased by a private sector entity for value addition (chillies powder, chilli flakes etc.). The value chain collapsed when the market price of imported dried chillies dropped significantly below the cost of production. In order to provide evidence on the robustness of the value chain and to avoid risks, the Project should have taken into consideration the cost of production of green chillies as a part of the design of the model. This intervention contributes to Outcome # 1 of the Project wherein improvements to income for the beneficiaries are envisaged.

administrative_issues:

In order to provide evidence on the robustness of the value chain, the Project should have calculated the cost of production of green chillies (as a part of the design of the model.

url:

https://webapps.ilo.org/ievaldiscovery/lessons/256909

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location:

country:

Sri Lanka

region:

Asia and the Pacific

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eval_title:

Local Empowerment through Economic Development and Reconciliation Project (LEED+) - Final evaluation