01. Programme Components: SAPP has 3 main program components; all the components have two subcomponents each. The main components are listed below:* Access to commercial partnership: This component will focus on the establishment of Public-Private-Producer Partnerships (4Ps) and on the institutional strengthening and capacity building of producer groups within a market-driven model. The component is of USD 51.2 million or 49% of the total cost.
* Access to rural finance: This component will aim at facilitating access to rural financial services in a sustainable manner and at affordable rates. The component is of USD 43.6 million or 42% of total cost.
* Programme management and policy dialogue: This component will focus on activities to manage and facilitate the implementation of the operational activities. The component is of USD 5.8 million or 6% of the total cost.
02. The Component 1 Access to commercial partnership has two sub-components: i) Component 1 (1): Establishing 4Ps and ii) Component 1 (2): Institutional strengthening and capacity building of Farmer Organizations (FOs) / Producer Organizations (POs) and farmer groups. These sub-components will be implemented through the following implementation modalities
The programme will support the establishment of market-driven 4Ps under the following three categories,
01. New 4Ps schemes led by private companies,
02. Geographical/outreach expansion or scaling-up of National Agribusiness Development Programme (NADeP)-supported 4P schemes; and
03. New 4P schemes explicitly working with FOs / POs and farmer groups.
The Programme will also provide targeted support to rural youth to become entrepreneurs, and to respond to the demand for services generated along the 4Ps
01.The programme will aim to support capacity building of FOs / POs and farmer groups.The start-up funding at group level will be complemented with support in the form of business mentoring, training, exchange visits and digressive support to FOs / POs and farmer groups for their management.
02.The Component 2, access to rural finance has two sub components: i) Component 2 (1): Financing of 4Ps and ii) Component 2 (2): Institutional strengthening for the financial services sector.
03.A Line of credit (LOC) will be set up at the Regional Development Department (RDD) of the Central Bank of Sri Lanka (CBSL) to finance the investment and working capital need of the smallholders under the 4Ps, target smallholders of NADeP, SPENDeP, DZP, SAPP including women youth. The LOC would as well fund to landless youths in the project areas.
04.PFIs (accredited by CBSL) and the CBSL would also be supportedin the elaboration and dissemination of new regulations for the microfinance sector, thus ensuring adequate participation opportunities for rural communities, and in training of licensed Micro Finance Institutions (MFIs) on these new regulations. Furthermore, some critical support to PFIs, including commercial banks and deposit-taking MFIs, would be provided to enhance their capacity in rural, micro and agricultural finance for low income groups, mostly through training,technical assistance and the operating cost support to reduce the transaction cost of both PFIs & clients which will lead to existence of sustainable inclusive financial door for smallholders in Sri Lanka.
05.The Component 3, Programme Management and Policy Dialogue, covers the costs of initiating, developing and implementing the programme. The component 3 has two sub components: i)Component 3.1: Programme and knowledge management and ii) Component 3.2: Policy Dialogue.
06.The financial and administrative procedures would spell out establishment of management, finance and administrative procedures including accounting, auditing and a monitoring and evaluation system. Under policy dialogue, the component will support activities aiming at improving the policy environment for equitable and sustainable smallholder farmer-sourced agribusiness development.