Mannar:40,000 Tamil IDPs from Mannar are living outside the region, and an additional 30,000 Tamil refugees from Mannar live in camps in Tamilnaadu!

Mannar have we forgotten its potential?

The total area in the Mannar district is around 2,002 sq. km and hosts around 104,000 people. Out of this 89,232 persons are permanent residents while 14,456 are displaced from other districts. This latter figure is likely to be higher now, given the recent IDP situation in Vanni. It is also estimated that nearly 40,000 displaced persons from Mannar are living outside the region, and an additional 30,000 refugees from Mannar live in camps in South India.

In terms of land use, 65 percent of the land are is forest reserve, while around 10 percent is paddy cultivation, and 4.5 percent is coconut and palmyrah. Mannar has a variety of soil types, which can support paddy, other field crops, vegetables, horticulture as well as palmyrah and coconut (especially on Mannar Island).

Out of the land available for cultivation, the crop distribution is mainly towards paddy and palmyrah. Coconut, cashew and other highland crops are also grown. In addition to this, the Mannar seas are extremely rich in marine resources.

Decades of neglect followed by the war has meant that the people of Mannar suffer greatly from poverty. Recent household income surveys haven’t included the North due to the security situation.


Mannar ‘Rice Bowl’ used to produce SL’s biggest harvest

But this is to be done soon, and would shed more light on the poverty status in Mannar. Water and sanitation is also a key issue for the people, as Mannar is in one of the driest parts of the country. Much of the coastal area water is saline and deep tube wells are needed to reach fresh water aquifers.

Mannar - ‘Rice Bowl’
Nearly 20 years ago, Sri Lanka’s biggest paddy crop was harvested from this rice bowl. Over 60 percent of Mannar’s population are involved in paddy cultivation. After the district was liberated from the LTTE in June last year, programs are underway to get paddy cultivation back on track in Mannar.

The ‘Yali Pibidemu’ project of the Ministry of Nation Building is working to increase the paddy harvest obtained from Nanatam, Adampan and Musali in the Rice Bowl area. The farmers in the area are free to engage in their paddy cultivation, as lands have been de-mined and regular livelihood activities are underway. Nearly 25,000 acres are to be cultivated under this program.

As seen in figure 2, the paddy harvest is slowly returning to the high levels in the early 1980s. However, cultivation now is still far below full capacity and much work needs to be done to reverse the beating it took during the years of conflict. To return it to its previous Rice Bowl glory, Rex Culas, President of the Mannar District Chamber of Commerce said that, “the immediate need is for the displaced people to be resettled and opportunities for basic paddy farming livelihoods returned to normalcy.”

Key issue: milling facilities
A major constraint in the district is the severe lack of milling facilities for paddy produced in the district. Following the displacement of people in 1985 and 1990, the 20 rice or so rice mills operating there closed down. In the past there used to be a large rice mill in Nanattan, run by the Paddy Marketing Board, available for all paddy farmers in Mannar. Currently there are a few small scale rice mills capable of milling only to satisfy local consumption, and that too, barely.

As we see in some parts of the East as well, much of the paddy produced in Mannar is transported to Vavuniya and other areas and is milled there and re-transported back to Mannar as rice.

The people in Mannar, including the paddy producers, thus have to pay higher prices for the finished product despite having sold the paddy at a lower price. Quality rice milling facilities is an urgent need in Mannar.

The World Bank provided Rs. 385 million under its ‘Re-awakening’ project to rehabilitate the ‘Giants Tank’. It provides irrigation to over 30,000 acres in the area and channels water to over 162 small tanks and waterways. The project is said to be completed in 2010 and will benefit over 6,500 families. In addition there are other major tanks like Sannar, Kooral, Akathimurippu and Viyayadhikulam which have a capacity to feed 5,000 acres.

Mannar - Fishing industry
Mannar district has a coastal belt stretching 163 km, from Theavnpiddi in the North to Mullikulam in the East and Talaimannar in the South. In addition, Mannar island is encircled by a shallow continental shelf, rich in fishing banks, a pearl bank and a prawn bank.

The full extent of the Mannar seas has a remarkable marine environment suitable for fishing. Although many of the anchorage facilities are in disrepair, there are nearly 30 small fishing harbours spread along this coastline.

The diverse marine environment here has led to a strong tradition of lagoon, coastal and off shore fishing as well as fishing for other marine products through diving. However, most of the fishing now is only coastal fishing. Inland fishing was abandoned during the years of conflict and offshore fishing is constrained by the restrictions placed on multi-day boats, due to security reasons.

There are over 9,000 active fisherman in Mannar, but prior to the conflict there used to be around 17,000. Estimates indicate that around 20,000 more fisherman remain inactive in the district. Fisheries provide employment to around 25 percent of the population, and in some core fishing areas as much as 40-50 percent of the population relies heavily on fishing. Mannar fishermen produce around 8,500 mt of fish annually, on par with Trincomalee and Batticaloa.

However, this can be raised to 10,000 mt, as were the levels prior to the conflict. 15 percent of fish production is utilised for dry fish production, 5 percent for local consumption and the remaining 80 percent is transported to other districts.

The reduction in Mannar fish production not only directly impacts fisheries livelihoods, but also supporting private businesses like those dealing in lubricants, batteries and boat and out-board motor repairs, to name a few.

Potential for high value fisheries
A lucrative business activity which has foreign exchange earning potential is the export of Beche-de-mer - Sea Cucumber. A few businesses under the chamber of commerce are already engaged in Beche-de-mer processing. However, stronger private traders who have better export linkages tend to exploit the Mannar Beche-de-mer fisherman.

It is a highly sought after commodity for Chinese food in Singapore, malaysia, Taiwan, Korea, Japan and China, as well as increasingly in Australia, Europe and America due to the growing Chinese food market there. Previously, the Southern coastal belt had potential in this, but it gradually waned.

The sea cucumber is a high value fish species, and depending on the type, it can fetch between Rs. 400 and Rs. 1,500 per animal. These fishermen ought to be assisted to gain direct access to this lucrative export market.

However, a couple of immediate constraints hamper the fishing industry in Mannar.

Issue 1:Restrictions on fishing

Due to the security issues that prevail, fishermen are only allowed day fishing and only 50 litres of fuel at a time. They are only allowed to travel up to 5 nautical miles off the coast. Powerful 25 horsepower engines are not allowed to be fitted to fishing boats, thus limiting the fishing hours even further as more time is taken to travel to and from the fishing locations.

Issue 2: Lack of cold storage and processing facilities

If the fisheries sector is to pick up strong, improvements to the value chain and logistical capabilities need to come about - everything from cold storage to freezer trucks.

Cold storage is not available in Mannar and Vankalai, and this, together with the dearth in ice, has hampered marketing opportunities for these fishermen. In addition, the delays in cross loading in Medawachchiya cause loss of produce by the melting of ice.

In the 1960s the Ceylon Fisheries Corporation had an operation in Pesalai in Mannar, realising the potential of the fishing industry there. Its main objective was the production of ice to cater to the needs of the district’s fisherman as well as making canned fish using the huge quantity of fish caught in the area daily.

In produced around 20MT of ice and around 5000 tins of fish daily. Following the displacement of people to India, production came to standstill, and despite being restarted the original levels have not been reached.

Production of canned fish has been stopped completely. It is reported that the factory previously employed close to 200 workers directly. The buildings are reportedly still in good condition and need only minor repairs. If this is done and a few pieces of new equipment are provided to kick start the operation once more, around 40MT of ice and 7500 tins of fish could be produced daily. Excluding staff salaries, this operation could make around 100 million annually.

Ice is very scarce and has to be mostly brought from outside. There are a few ice factories run by private individuals and one flake ice factory run by a Fisherman’s Cooperative Society.

The production in private ice factories is far from sufficient to meet the demand and the flake ice factory is not functioning at present as the plant has to be repaired. Mr. Rex Culas of the Mannar chamber noted that “the cost of repairs would be in the range of Rs. 500,000. The fishermen in the area suffer greatly from the lack of local access to ice, and having to bring in much of it from outside the district”.

Issue 3:Boat repair plant needed

An urgent need for the fisheries sector in Mannar is a workshop and spare parts facility to repair outboard and fibre glass boats in operation there. Estimates indicate that there are around 3,000 fibre glass boats in active operation in Mannar, many of which have outboard motors.

Out of this, many require repair and tinkering on a daily basis. Due to the lack of such a facility, the fisherman face interruptions to their livelihoods and loss of income, until such time as repairs are made and the boats are sea worthy. The Mannar chamber has suggested that the Government agent could set aside a piece of land near the present fish market, and then an appropriate Government agency, semi or non-government organisation could set up the building. It would be run by a private entrepreneur.

Issue 4:Intrusion by Indian fishing trawlers

A major concern expressed by the fishing industry in Mannar is the intrusion of Indian trawlers into the fishing seas off Mannar. They report that hundreds of Indian fishing trawlers enter Mannar seas 3 nights a week and engage in extensive trawl-net fishing, sweeping a large stock of Mannar’s fish resources, particularly lucrative varieties like Beche-de-mer, prawns and chunk.

These trawlers also damage drift-nets used by local fisherman. Local fisherman complain that they are almost completely unable to engage in fishing for about three days in a week, as the ‘seas are controlled by Indian fishermen’. This has led to confrontations between the two groups quite often.

Mannar - Petroleum resources
Seismic data had shown potential for around one billion barrels of oil under the sea off Sri Lanka’s North West Coast, particularly in the Mannar Basin. Following several international roadshows, the Petroleum Ministry had called for bids from international oil companies for exploration of petroleum hydrocarbons in Blocks 2,3 and 4 in the Mannar Basin.

This first phase of the project is a 3,300 sq. km area. Cairns Lanka Ltd, the local subsidiary of Cairns India Ltd, was the successful licensee to obtain Sri Lanka’s first ‘Petroleum Exploration License’ for Block 2. It will commence exploration activities this year, with an investment of more than $110 million.

It will be nearly 4 years before the first barrel of oil is obtained, but this will certainly give Mannar an identity in the country’s economic landscape.

Mannar - Vingear production
Palmyrah and coconut trees are in abundance in Mannar. The large quantity of palmyrah toddy tapped daily in Mannar was much more than needed for local consumption. After studying the feasibility of commercialising this opportunity, the UNDP provided machinery worth around Rs. 5 million.

However, marketing the product became a problem owing to a bad odour emanating from it. According to reports, no technical expertise has been yet deployed to resolve this problem. Also, market linkages are needed to sell the produce. The chamber reports that the vinegar industry employed around 125 tappers and many more in the production phase, and around 2,000 bottles could be produced daily with the existing equipment.

Mannar - Salt and clay
Although the main livelihoods are in fishing and paddy, prior to the conflict the industrial sector in Mannar was slowly growing. Apart from the two larger scale industries, the salt factory and the Pesalai fish processing centre, there were nearly 500 small and medium scale industries in the past. The Mannar saltern, under the Manthai Salt Corporation, produced around 4,000 MT of salt annually, however now this is reduced by a third. It still supplies limited quantities to the fishing industry for dry fish production and ice manufacture.

However, this far from meets demand and capacity needs to be increased. On this, Mr. Rex Culas noted that, “to get salt production underway, a couple of small bunds need to be erected in the lagoon and a few water pumps need to be set up.

This will cost around Rs. 1 million. As the site is along the main road, transport and other facilities are easily accessible”. Standard clay is available in various parts of Mannar, particularly in Murunkan, and as once used as a raw material by the KKS cement factory. There is potential for tile, brick and pottery industries as well.

Mannar - Way Forward Credit facilities
Credit facilities are very poor in Mannar, with banks very hesitant in granting loans and overdraft facilities. This is largely due to the prevailing local situation, where business turnover is very poor and collateral is weak. Many farmers, fishermen as well as local businessmen urge the need for SME concessionary lending schemes to fill this lacuna in financing.

Particularly to spur SME industrialists, a soft loan scheme could be introduced to encourage restarting of the 500 odd businesses that were in Mannar. Given the hesitation among banks to lend to enterprises with poor turnover, this lending could be accompanied by some training in running an SME business.

Lack of telecom connectivity
One of the biggest difficulties faced by ordinary Mannar residents in that there is no mobile phone or CDMA connectivity in the entire district! Even land phones are disconnected in nearly all parts of the district except in Mannar town.

The Mannar chamber of commerce had made several representations to higher authorities to rectify this, but there has been no resolution to the problem up to now. Also, internet connectivity exists (via dial-up only), but businesses complain that it is extremely slow. The urgent need of full restoration of mobile and CDMA connectivity ought to be looked at soon, once appropriate security considerations are made.

Transport infrastructure
Due to the years of conflict, the economic infrastructure in Mannar is very run down. Particularly in improving transport infrastructure, several projects are now underway. A major project recently concluded was the construction of a new Mannar bridge and the improvement of causeways and connecting roads by the Japan International Cooperation Agency (JICA).

This will open up opportunities for the access of people and goods. The new Mannar bridge, re-built at a cost of $19 million, will benefit over 50,000 people as it is the only connection between the mainland and Mannar island.

The Mannar chamber remarks that the main constraint to business in Mannar is the restricted movement of goods beyond the Medawachchiya checkpoint and the delays and resultant increased costs due to cross-loading there. Once the security situation improves, however, this constraint will surely ease. Mannar - Working Begins - reinvesting in the district, reversing the neglect

Some initiatives are underway to improve the situation in Mannar. The Government spent nearly Rs. 1.7 billion in 2007 alone, mainly in agriculture, human settlements and transport infrastructure. Non-Governmental organisations spent around Rs. 325 million in 2007, with nearly half of this going towards human settlements but spending as also on social and economic infrastructure.

Given the inflow of IDPs to Vavuniya and some of them being brought to Mannar as well, the focus will be on humanitarian efforts in the immediate weeks and months.

However, it will be important to simultaneously engage the local farmers, fishermen and businessmen in understanding what they need fixed in order to revive the Mannar economy once more. Its rich natural resources, whether it be in fisheries or paddy, must be tapped. Focused efforts are needed to improve the various facilities to spur better marketing of, and higher earning from, this fish and agro produce.

Economic Affairs Unit Secretariat for Coordinating the Peace Process

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