As Yala Season approaches: Is There Adequate Organic or Chemical Fertiliser?

By Sulochana Ramiah Mohan | Published: 2:00 AM Jan 15 2022
Focus As Yala Season approaches: Is There Adequate Organic or Chemical Fertiliser?

By Sulochana Ramiah Mohan

Following the Government’s announcement that the private sector would be required to import chemical fertiliser, while the government would only provide free organic fertiliser to farmer families, Ceylon Today has learnt that the Department of Agriculture is preparing to call for bids to import chemical fertiliser while China will be sending its organic shipment for the Yala season.

At the current price of chemicals in the global market, which is exorbitantly high, the government may wait a few more weeks to place the order in the hope that the price will fall.

The government banned chemical fertilisers in April 2021, but due to public outrage, the President considered lifting the ban in November, partially lifting the ban after seven months. The partial lifting of the ban allowed the private sector to import and farmers to buy it in the open market.

It’s been almost two months and for farmers who use chemical fertliser, the next step is to look into purchasing chemical fertliser. According to Senior Professor - Weed Science, President - Weed Science Society of Sri Lanka (WSSSL), Chairman, National Invasive Species Specialist Group (NISSG), Ministry of Environment Prof Buddhi Marambe, approximately ten companies have placed orders to import fertiliser.

He told Ceylon Today that even before the gazette was revoked on 30 November 2021, the Minister of Plantation had obtained Cabinet approval to order 98,000 tonnes of Ammonium Sulfate, of which only 30,000 tonnes had been imported so far.

Fertiliser prices are currently exorbitantly high in the global market. For example, a metric ton of urea, which was previously priced between US$ 300 and 400, is now priced between US$1,000 and 1,200. 

Sri Lanka typically avoids placing fertiliser import orders in the fourth quarter and in January because world market prices are typically high. As a result, many regular importers are currently hesitant to place orders.

The first issue is the high price (both imported and local market), and the second is the limited or non-release of US dollars to open LCs. Even if fertiliser is imported, higher in-country prices will affect agricultural production and raise the cost of food for consumers unless the government provides incentives.

“In general, approximately one out of every six (16 per cent) people in Sri Lanka are considered multidimensionally poor,” according to the Weed Scientist (DCS 2021). However, we have heard that some farmers are still purchasing fertilisers at higher prices, such as more than Rs. 20,000 per 50 kg bag of urea. Perhaps they spend such high prices because the production is primarily for domestic consumption. If not, the market price of the produce will rise further, affecting the consumer due to higher production costs.

Considering the fact that about 45.5% of the total land area is agricultural land, there are about 2.1 million farming households (that do crop or animal farming) totalling about 8.1 million of the agrarian population, as per the Department of Census and Statistics (DCS) data, he said.

New research on fertiliser 

Meanwhile, Jeevika Weerahewa of the University of Peradeniya, Athula Senaratne of the Institute of Policy Studies and Suresh Babu of the International Food Policy Research Institute in Washington DC conducted a survey titled ‘Reforming Fertiliser Import Policies for Sustainable Intensification of Agricultural Systems in Sri Lanka: Is There a Policy Failure?’ and released their report on 27 August 2021.

The key message of their research was:  • Sri Lanka recently banned the importation of chemical fertilisers. • While easing of the foreign exchange burden from chemical fertiliser imports is the prime motive behind the new policy, the policy will very likely result in yield losses of key crops, increased rural poverty and rural-urban migration, agricultural export revenue loss, and an increased food import bill • Other adverse effects of the ban are likely to include rent seeking behaviour, creation of monopoly power, importation of sub-standard organic fertiliser substitutes, and illegal trade of items under the ban • Potential alternatives to the ban are economic instruments and regulatory measures to reduce inappropriate use of chemical fertilisers, strengthening the implementation of Good Agricultural Practices (GAP) to enhance food safety and providing targeted assistance for the adoption of sustainable land use management practices.

Since 1962, successive governments provided fertiliser subsidy in various forms focusing on supplying nitrogen, phosphorous and potassium for paddy, other field crops, and plantation crops with an exception during the period of 1990-1994 when no subsidy was provided. An attempt was made to cut expenditure on the subsidy by converting it into an equivalent cash grants scheme in 2016, but this approach lasted only two years.

 In 2019, the rate of fertiliser subsidy provided to paddy farmers was approximately 86 per cent and it ranged between 48% and 88% for other crops. In 2020, fertiliser subsidy was provided for all crops at a subsidised rate. From mid - 2020, for the first time in history, fertiliser was provided free of charge for paddy up to a cultivation extent of five acres. On 6 May 2021, Imports & Exports (Control) Regulation No 07 of 2021 was issued banning importation of chemical fertilisers, pesticides and herbicides (Finance Ministry of Sri Lanka, 2019 and 2020).

On 31 July 2021, an import licensing requirement for chemical fertilisers replaced the said import ban. Until the time of writing this policy brief no licenses have been issued to import chemical fertilisers despite the change in regulation.

Fertiliser subsidies along with other incentives provided to promote local food production led to increased food availability, export earnings, farm incomes and food self-sufficiency in Sri Lanka over the years. However, the high cost of these subsidies crowded out other public expenditure needed within the agricultural sector. In 2020, approximately US$ 188.4711 million (LKR 34,966 million) was spent on fertiliser subsidy for food crops which constituted 53.57% of the government expenditure on the agriculture sector in 2020 (Finance Ministry of Sri Lanka, 2020).

Professor of Agricultural Economics University of Peradeniya Jeevika Weerahewa, in her research dated 8 January 2022, on the topic ‘Making the Agricultural Systems in Sri Lanka Toxin Free: Government Policy Measures in 2021 and their Implications’, remarked that extremist policies can incur unintended and long-lasting devastating economic costs on a society. She pointed out that:

- The decision to ban chemical fertilisers and pesticides was done in haste with no scientific basis.

- The scientific community did not anticipate such an extreme policy move, hence no concrete ‘local’ evidence on implications were available (though ample reviews on feasibility of organic agriculture elsewhere).

- Economic way of thinking is not adequately inculcated in public policy making.

- Formal and informal institutions are to be reformed to instil scientific evidence based policy decision making process.

Giving her views to Ceylon Today on Friday, she added that for 60 years, awarding subsidies to farmers had not resulted in a change, and the practice should be completely prohibited. At this point, if you ban chemical fertiliser and state that you will have to purchase it in the future, they will be unable to bear it. “This policy of offering subsidiary should change gradually and award such concessions to vulnerable farmers,” she believes. Farmers should see a shift toward industrialisation.

She stated that imposing and lifting the ban on importing fertilisers is a bad policy and not an acceptable practice. In Sri Lanka, there is no formal sector for organic farming.

Agricultural household survey

 The Agricultural Household Survey (AHS) of 2016/2017 is the latest available in the DCS. According to AHS (A results, estimated number of households with agricultural operators in the country was 2.1 million and estimated population of these households was 8.1 million. On average an agricultural operating household has 3.8 persons and 81% agricultural operating households were headed by males. 

In Sri Lanka, family members of agricultural operating households were also contributing to production activities frequently. Therefore, age and sex of household members are two important variables. A survey found that 48.8% of household population was males and balance was females. Among agricultural operating household population 71% reported as aged 20 years and above and 17% reported age 60 and above years.

According to the findings of survey, average cost of production of paddy was between Rs 20,000 to 30,000 per acre. This cost includes only cash payments. Almost half of the production cost has been spent on labour and machinery. Cost of fertiliser and insecticide /weedicide were 20% and 10% of total cost respectively.

 Financial loans were taken by a considerable number of agricultural operators for their cultivation activities. According to the survey, based on the number of loans reported, the majority were taken from banks (53%). Almost 40% of loans were taken from institutions providing agriculture inputs, NGOs, money lenders, finance/leasing companies and pawning centers. A majority of loans were taken to purchase seeds, fertilisers, pesticides, insecticides, and to rent agricultural equipment.

 Data revealed that cultivators of fruit, such as mango, banana, papaw, pineapple, Rambutan, Avocado etc. were 66,091 for the Maha season and 44,358 for the Yala season. Survey results shows that more than 80% of these growers were male. The highest number of fruit cultivating operators was reported from the Hambantota district in 2017.

Also, the survey found there were approximately 365,000 tea cultivators, 55,000 rubber growers and 167,000 coconut growers operators. 

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By Sulochana Ramiah Mohan | Published: 2:00 AM Jan 15 2022

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