Coconut hectareage in the country is 417,000 hectares with average yield per hectare around 6,000 nuts. Arising from severe shortfall in nut production in 2002, the coconut­ processing sector was greatly affected. However, with increased coconut production in 2003, industrial processing sector is being revived particularly, the desiccated coconut industry. But the coconut oil industry still lags behind due to price competition from imported edible oils and unavailability of coconuts. Coir and coir products are showing promising trend with contribution of over 40% to the total annual exports of all coconut products. On transfer of technology, Coconut Cultivation Board and Coconut Research Institute of Sri Lanka are engaged in transferring technology to coconut farmers through various ways such as seminars, workshops for extension workers and farmers, distributing instruction manuals and advisory circulars. The paper highlights a number of reasons for low coconut production and productivity that, amongst others, are heavy dependence on rainfall and climatic conditions, depletion of soil fertility, poor cultivation practices and also due to lack of high yielding varieties. Specific strategic efforts are being undertaken by the Government to enhance productivity and income of coconut farmers such as promoting drip irrigation, fertilizer application/moisture conservation, pest and weeds management and developing high yielding varieties.