Sri Lanka is an island country situated south-east of Indian Sub-Continent with an area of 62,705 km2, of which 29% is arable land. In 2001, the total population of the country was estimated at 19.6 million with an average growth rate of 1.5% during the period of 2001 to 2002.
Since independence in 1948, Sri Lanka has put their policy importance on human development, which resulted in achieving health and education outcomes more consistent with those of high income countries. Thus, the infant mortality rate has reduced from 48 to 15 deaths per 1,000 live births, and average life expectancy at birth has increased from 67 to 73 years during the period of 1970 to 2000. The completion rates of primary education is around 100 percent, and the country's literacy rates, of men and women are 90% and 85% respectively.
Despite twenty year long civil conflict, Sri Lanka had maintained a relatively healthy economic growth between the mid-1980s and the mid-1990s. Since transforming a market economy based on liberalized trade, foreign exchange and investment arrangements in the late of 1970s, the country's gross domestic product has grown at a moderate rate of 4 to 6 percent a year. In 2001, the county's GDP per capita was US$ 830, which is higher than that of most of its South Asian countries.
However, the progress in poverty reduction has been less than anticipated. Twenty-five percent of the population still lives below the poverty line, and of which ninety percent lives in rural areas and engage in agriculture related activities. Although introducing high yield rice variety and improvement of irrigation infrastructure has contributed to achieve 90% of rice self-sufficiency in 1980s, majority of poor households, predominantly small-scale farmers and landless labourers, are still experiencing seasonal food shortages. Their food security is highly dependent on rainfall patterns, and due to irregular rainfall, recurrent drought and neglect in maintaining irrigation infrastructure, the agricultural productivity of small-scale farm has declined over the past decades. In order to achieve poverty alleviation and food security, assistance to agricultural sector to improve farmers' livelihood is quite important. (Source of figures: World Bank in Sri Lanka)