Sri Lanka’s rubber industry—long considered one of the country’s most stable plantation sectors—is grappling with falling yields, declining exports, and severe post-disaster setbacks, even as the Government secures new international funding to revive the sector through sustainable practices. This week’s Cabinet approval of an €8 million European Union (EU) grant has placed renewed focus on an industry struggling to recover both economically and environmentally.
The project, titled Agri-Green Initiatives for Green Economic Growth, will be implemented across the country’s major rubber-growing provinces, including Sabaragamuwa, Western, Central, Uva, Eastern, North-Central and Southern regions. With the German development agency GIZ designated as the lead implementing authority, the programme aims to modernise farming methods, improve soil and water conservation, and support climate-resilient replanting.
The urgency is clear: Sri Lanka’s natural rubber output has dropped significantly over the past decade. Production fell from more than 150,000 metric tonnes a decade ago to around 78,000–82,000 tonnes in recent years, due to poor replanting cycles, ageing trees, labour shortages, and land fragmentation. Compounding the problem, Cyclone Ditwah devastated plantations in Sabaragamuwa and Kalutara two of the island’s most productive regions—damaging tapping fields, uprooting mature trees, and disrupting smallholder livelihoods.
Rubber exports, a key foreign-exchange earner, have also suffered. Earnings that once exceeded US$ 1 billion annually have slipped to US$ 700–800 million, reflecting both lower global demand and Sri Lanka’s weakening supply capacity. Processed rubber products such as tyres, industrial goods, and gloves still contribute significantly to export revenue, but manufacturers warn that shrinking domestic raw rubber supplies are forcing increased reliance on imports—undermining the industry’s competitiveness.
The EU-funded initiative therefore comes at a critical moment. According to the Government, the programme is expected to introduce climate-smart agricultural practices, promote efficient land management, and encourage sustainable production and consumption patterns. It also aims to strengthen food security within plantation communities while reducing environmental degradation linked to outdated farming methods.
Importantly, the initiative places strong emphasis on engaging youth and women—two groups largely absent from traditional plantation work but essential for the sector’s long-term survival. With more than 70% of rubber tapping now done by ageing workers, labour shortages have become one of the industry’s most acute challenges. Training programmes in green agriculture, value-addition, and digital monitoring systems are expected to open new income pathways within rubber-based supply chains.
Still, industry analysts caution that sustainability funding alone cannot resolve Sri Lanka’s structural issues. Replanting rates remain far below required levels, many smallholders lack access to credit, and post-disaster rehabilitation has been slow. Without coordinated national action to restore damaged estates, upgrade processing facilities, and address labour gaps, the sector may continue to contract despite international support.
As Sri Lanka attempts to rebuild after Cyclone Ditwah, the EU’s €8 million grant offers a timely lifeline. Whether it becomes a turning point for the rubber industryor merely a temporary relief measure will depend on how effectively the country can align green development goals with the urgent realities facing growers and exporters.
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