Minister of Agriculture Mahinda Amaraweera told media that the cabinet agreed to provide compensation using funds from crop insurance scheme.
The minister said around 58,770 acres of paddy and other crops were damaged due to the drought.
The southwest monsoon that farmers rely on for the Yala harvest season was less than expected due to the El Nino weather pattern, he said.
The southwest monsoon was only activated in recent weeks, and there is minor flooding in some parts of the country now.
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