September 15, 2011

Australian cows seen to support Sri Lanka's economy

Sri Lanka finance ministry said they are getting cows from Australia to lower the country's foreign exchange resources depletion and become self-sufficient in milk.

In the first phase 2,000 animals would be imported to the Bopaththalawa farm of the state-run National Livestock Development Board.

Based on the success of the project another 2,500 cows will be imported to farms in Nikaweratiya and Siringapatha.

Improving breeds, feed, health, research, extension services and a processing network is the current administration's strategy to promote the dairy industry.

Sri Lanka has run into frequent 'balance of payments crises' since the creation of a soft-pegged central bank in 1951 which targets interest rates and exchange rate simultaneously.

Many post-independence economic policies have been devised with the aim of 'saving foreign exchange'.

The country has entered another period of balance of payments pressure, with heavy foreign reserve sales to maintain a dollar peg.

A US$12.9 million project co-financed by Australia's Export Finance Insurance Corporation (EFIC) Cooperative and Centrale Raiffeisen-Boerenleenbank (Rabobank) of Netherlands will see 2,000 cows being imported to state-run farms. The goal was to reduce a "drain on the country's foreign exchange resources", increase employment and incomes, the finance ministry said.