Our Approach

In most rural areas of Sri Lanka, the population tends to be concentrated in geographically demarcated village communities with shared livelihood activities. In other words, many people in the same area produce the same product.

SEDCO's parent organization, Sewalanka, focuses on building the capacity of community-based organizations (CBOs) in this type of rural community. For many years, Sewalanka was able to provide the basic services requested by the CBOs: support to build institutional capacity, establish savings schemes and revolving loan funds, develop community infrastructure, increase production and link with government and other service providers

Advanced CBOs are now requesting new services from Sewalanka field staff. Most identify 'marketing' as their biggest constraint. When small-scale producers market individually, they have no bargaining power. For agriculture, production is seasonal and most farmers in a geographical area produce the same crops. Although regional crop prices are very low at harvest time, farmers are forced to sell because they lack storage facilities and because they need cash immediately for consumption and loan repayment. Fishermen face a similar problem. With no storage or processing facilities of their own, they are forced to sell their fish catch quickly before it spoils.

Rural producers are also affected by trade monopolies. Markets tend to be dominated by a few urban-based traders with storage, processing, transport, and retail facilities and strong political ties. There is a large gap between the price paid to the producer and the end retail price. Monopolistic traders are able to capture a major portion of the value chain and transfer the benefits to urban centers.

Another problem is that rural producers have limited understanding of consumer interests. They do not have access to information on demand, quality control requirements or value addition opportunities. Handicraft producers, for example, ask Sewalanka staff to 'find a market' for their products, but sometimes there is no demand for what they are producing. In this case, they need additional support to develop new designs or establish quality standards. Production planning is another constraint. Most producers do not have experience producing a consistent volume and quality of products. They need advisory services to transition to market-oriented production.

The producer groups we work with are requesting access to working capital, storage facilities and primary processing facilities, market information and technical advice. They have tried approaching microfinance lenders and commercial financial institutions, but neither has provisions for this type of collective post-production investment.

SEDCO addresses this gap in service provision through a market-oriented strategy that combines collective marketing and direct trade, value chain investments and service provision to rural producers and community enterprises. These services are linked because producer groups often require capital investment and technical advise to market collectively and access new market opportunities.