A GOOD CONCEPT REJECTED IN Sri Lanaka BUT WELCOMED ABROAD
Posted on August 24th, 2022

Sugath Kulatunga

A home-grown concept which has been accepted globally, has been considered irrelevant by the EDB which originated the concept. The rural sector in many developing countries offers potential for increased exports, as well as for expanded employment opportunities in what is often one of the poorer segments of the economy. Introducing programmes to stimulate exports from rural regions is a challenge in many countries because of the lack of entrepreneurial skills among the rural population, scattered and sometimes widely dispersed locations of producers, the small scale of production operations and lack of knowledge of market opportunities.

The concept of Export Production Villages (EPV) is based on the belief that there is tremendous potential to mobilize rural based products for export. But the lack of institutional arrangements and access to markets inhibit the development of rural exports. The strategy was to mobilize the producers in a collective institution and link them with established exporters. It envisaged the establishment of a series of Export Production Village Companies harnessing the entrepreneurial talents and skills of rural people through the development of products in the rural areas where they live and providing them with access to buyers. The concept has the advantage of replicability for almost any product group and in almost any geographical area.

As a response to this challenge, Sri Lanka adopted a new approach to develop rural-based exporters. The programme, called the “Export Production Village” scheme, was started in 1981with 21 EPVs which led to increased exports of several types of products as well as additional employment and higher income levels to the rural producers. Sri Lanka was able to capture the Lower Gulf marker for vegetables chiefly due to the competitive supplies from the NCP EPVs.

The marketability of the product depends not only on the international market but also the existence of an exporter committed to purchasing the products. One essential precondition for the approval of a project was therefore the existence of an “export-ready” exporter prepared to cooperate with the EPV. The exporter should have experience in that product line or in associated products, and also either already have orders in hand or be in a position to obtain orders within a short period.

Exporters cooperating with the EPVs are expected to provide feedback from the market on buyers’ requirements; assist in product upgrading; provide quality control, packaging and post-harvest advice (in regard to agricultural products); contribute transport and other servicing facilities if the EPV is unable to afford them; support producers in their requests for bank credit; and assist in technical and management training of EPV personnel.

The EPV scheme in Sri Lanka started as a pilot exercise to test a concept and design a methodology for the systematic development of rural exports.

Whatever the shortcomings of individual EPVs, the scheme has on the whole achieved the objective of validating the concept and the methodology adopted. The overall performance of 21 EPVs indicates that, in relation to the total investment made, the scheme has produced satisfactory results in income generation, export earnings and employment generation.

From a national export development point of view, the scheme has pioneered certain export products, induced exporters to work directly with village producers and demonstrated the potential for export supply development in the rural sector. It has generated greater awareness of the potential for export development in general and rural export development in particular, on a national scale.

EPVs have demonstrated that with proper organization, they can not only retain a higher share of the export benefits at the village level but also bring greater overall advantages to the country as a whole.

Above all, the scheme created a rural producers’ institution capable of doing business in the competitive field of export. One EPV in Dambadeniya has survived all problems and continue to provide employment in basket weaving for over 1000 rural women. This EPV has also was the origination of the Dambadeniya Foundation which has contributed on education, health and housing to the locality. https://www.srilankabusiness.com/emarketplace/emarketplace/seller/profile/shop/dambadeniya-export-products-development-co-ltd

Most of the information on Sri Lanka experience is culled from an article on https://www.thefreelibrary.com/Export+production+villages%3A+Sri+Lanka%27s+novel+approach.-a014345577?utm.

In 1989 at the invitation of the Ghana Export Promotion Council the former Director General of the EDB successfully introduced the EPV model to Ghana under an ITC (UNCTAD/WTO) consultancy. The performance of this project is given in brief quoting official reviews.

1.Extract from an IMF document  https://www.elibrary.imf.org/view/journals/002/2000/002/article-A002-en.xml gives a brief description of the EPV program in Ghana.

The Export Production Village is an example of a GEPC program to foster nontraditional exports. Under the program, small rural producers are organized in companies which interface directly with exporters. The GEPC assists with sponsorship, equity participation, sourcing of production inputs, and extension services. The coverage of the program includes agricultural products, mainly fruits, vegetables, spices, staples and tree crops; shrimp farming; handicraft goods such as batik, rattan furniture, straw baskets, jewelry, and wooden items; and manufactured items, such as salt, processed cashew nuts, and coconut fiber products.”

2. In a review of the Ghana: capacity-building for export-led poverty reduction Geneva 1999, it was said

the new UNDP-funded project of the Government of Ghana, the Government has identified a number of

priority rural districts (Bongo, Dangbe West, Afram Plains, Accra Metropolitan Area and Juabeso Bia) and

products (cashew, mango, honey and beeswax, mushrooms, fish, processed fish, packaged fruits and vegetables, black pepper, straw handicraft) for the development of a number of new EPVs. The project follows an earlier one implemented in the early 1990s) which had already launched various successful EPVs in the country.”

3. Review of ITC, ‘Ghana: Export Production Villages’ (Geneva, April 1998).

Ghana: wooden handicraft in the Aburi EPV Started with 35 woodcarvers in 1990, this EPV has grown to over 300 woodcarvers. It now employs nearly 700 persons (including the woodcarvers). Its annual export turnover has risen from US$ 160,000 in 1990 to US$ 3,250,000 in 1997. It has become a reliable supplier to Getrade and Pier One.”

After initial difficulties in obtaining reliable support from several public bodies for exporting its product, the EPV started in Bolgatanga turned to leading private-sector exporters of straw baskets and done extremely well and the number of women weavers associated with it has grown from 200 in 1993 to 1,000 in 1997. Basket weaving has become the main income-generating activity for women in this area.”

There is also the sad situation where innovative programs initiated during one regime are disregarded to deny any credit to the previous regime. In Sri Lanka a Minister of a changed regime has had the audacity to suggest restoring the EPV scheme under another name. Whereas the EPV model has been

successfully implemented in foreign countries and in fact becomes the seminal concept for wider international programs which are implemented internationally including in China.

With the experience of the successful implementation of the EPV model in several countries the ITC (UNCTED/WTO) conceptualized a wider project with the thrust on Poverty reduction, titled EXPORT LED POVERTY REDCTION. (EPRP).

EPRP projects were implemented in several countries: Bolivia, Brazil, Cambodia,
China, Ethiopia, El Salvador, India, Kenya, Mongolia, Vietnam and South Africa. Many
countries have approached ITC for similar projects, based on the results from existing
projects. The sectors selected included: agriculture products, Community Based Tourism
(CBT), leather products, textiles/clothing and light manufacturing, based on
product/market potential and local resource strengths.EPRP attempts to link small producers to the export value chain, often in collaboration with export-oriented enterprises.

ITC responded to several country requests for the implementation of EPRP projects. Work is currently underway in Bolivia, Brazil, Cambodia, China, Ethiopia, El Salvador, India, Kenya, Mongolia, South Africa and Vietnam.

Another 17 countries had requested ITC’s EPRP technical support and are on the
waiting list for future technical assistance, subject to the availability of funds.

Another success story was the Organic pepper project in Kerala This project was one of the proposals selected in the Development Marketplace Competition hosted by the World Bank in 1999, based on its innovative approaches to poverty reduction at the community level. The project aimed to organise small Indian spice farmers in a few villages, build capacity for organic production. and certification through partnerships with local NGOs, and ultimately provide access to higher-value export markets. The origin of the Project was the initial work done through a former ITC project on EPVs in Kerala done in collaboration with the Spice Board of India.

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