According to the UN, agricultural production is the main source of livelihood in the affected area and this season's rice harvest has been badly damaged, leading to increased food insecurity.
The World Food Programme (WFP) estimates about 500,000 residents are food-insecure.
In the worst affected districts of Ampara, Batticaloa, and Trincomalee in Eastern Province, heavy rains between 8 and 12 January left more than 101,171 hectares of paddy fields damaged, of which more than 81,000ha suffered moderate to severe damage, initial estimates suggest.
The UN Food and Agriculture Organization (FAO) estimates a loss of about 450,000 tons or US$120 million.
"The potential loss has been calculated to be in the region of 15.5 percent," Calvin Piggott, FAO's senior northern recovery coordinator in Sri Lanka, told IRIN.
The flooding, some of the worst in 100 years, came just two months before fields were to be harvested for the Maha - the principal growing season in the island nation. More than 607,000ha are cultivated during this time, with over one-fifth of that in the four districts hit by the floods.
In some towns such as Manampitiya, along the border between Polonnaruwa and Batticaloa districts, hundreds of hectares were affected.
Here, water hyacinth - regarded as the world's worst water weed - was washed into the fields with the flood waters, covering 81ha of paddy land in one stretch, Manhina Banda, the government agriculture officer for the area, said.
"You can't do anything but wait for the weed to die. Taking it out will be a colossal expenditure," he said.
Elsewhere, when the paddy was under water for two to three days, the harvest was either destroyed or will be woefully low.
"The paddy can look fine, but if it was under water for over a day there will be no harvest," farmer Sarath Weerasinghe from Kirimitiya, an interior village in the Polonnaruwa district, explained.
Weerasinghe is typical of many small-time paddy cultivators in Sri Lanka who depend on rice as their primary source of income. He cultivated 1.2ha, spending around $600 per 0.4ha, and hoped to make about $1,000 per 0.4ha from the harvest.
Weerasinghe financed the cultivation from a small loan obtained from a local businessman. He has no insurance and no way of recouping his losses unless he receives direct assistance.
But rice farmers are not the only ones reeling; other small crops have suffered losses, though estimates have yet to be finalized.
"There will be multiple effects felt right across the country," Seenithamby Manoharan, a senior rural development specialist with the World Bank Sri Lanka office, told IRIN, warning that in addition to the losses suffered by farmers, there were likely to be price rises when the harvest fell short of expectations.
Since the rains began at the end of 2010, the Economic Centre in central Dambulla, the country's main bulk vegetable distribution centre, has recorded price increases of more than 80 percent, the UN said.
Another area of heavy losses is likely to be livestock. In Verugal, a village in the Trincomalee District with 12,000 people, the loss of livestock was over 10,000, Ponnambalam Thanesveran, the divisional secretary for the village, said. So far no figures have been established for the total loss of livestock due to the flooding.
The FAO is conducting a detailed study of the flood damage, Piggott said, with initial assistance likely to begin in the next three weeks targeting the most vulnerable.
The government has held talks with the World Bank on how to assist the famers, but so far there has been no concrete assistance targeting the destroyed crops or livestock. In most areas, local officials were gathering information last week to be sent to government authorities in the capital Colombo.
"Something has to be done fast, some of these people have lost their only means of income," Thanesveran said.
On 20 January, the UN and its partners launched a $51 million appeal to assist more than one million people over the next six months. Of this, $22 million is designated for food security, agriculture and livelihoods.
The appeal is expected to be revised within the next month to reflect needs as the situation changes and assessments are made available.