The Sunday Leader

Farmers To Hike Prices Sans Fertilizer Subsidy

By Rasika Jayakody

Much to the detriment of Sri Lankan consumers – against a backdrop where telecommunication charges have shot up, milk powder prices have been increased and the prices of a number of imported food items have skyrocketed – paddy cultivators, too, warn that there might be a significant price hike towards March and April this year.

Paddy farmers alleged that fertilizer supply had reduced by 25 to 30% over the last few months and the quality of fertilizer was also declining. This trend, according to them, is an indication that the government is not interested in proceeding with the fertilizer subsidy that has been offered to farmers since the present government was elected to power.

“The government has made a strategic move to prevent farmers from using fertilizer. Even the Agriculture Minister has clearly stated that. As part of that plan, fertilizer subsidy has been cut down and, as a result of that, paddy farmers have less access to fertilizer. This has made a serious negative impact on the overall paddy cultivation of the country,” National Organizer of Socialist Farmers’ Union

Namal Karunarathne told The Sunday Leader.
Karunarathne asserts that farmers are not in a position to do away with chemical fertilizer overnight as they have been using them for years for paddy cultivation.
“As much as the farmers are used to chemical fertilizer, the soil is also used to that and we have no way of avoiding this situation as instructed by the government. When they reduce the use of chemical fertilizer, it affects the production,” he added.
As a result of this situation, the union leader added that the farmers are now forced to purchase additional fertilizer from the market for higher prices.
“Farmers have realized that there is no point in worrying about fertilizer subsidy. In a desperate attempt to ensure that there is no decline in production, they are now buying fertilizer from the market at higher rates. Even a child can understand that farmers are burdened with debt and they cannot afford to buy fertilizer at market prices. This has plunged them from the frying pan into the fire,” he said.

In 2005, the present government capitalized heavily on its promise to provide fertilizer at a subsidized price of Rs 350. That election pledge played a pivotal role in elevating the Mahinda Rajapaksa led United Peoples Freedom Alliance to power. Another paddy farmer, who wished to remain anonymous, said the government was rapidly moving away from its policy of providing subsidized fertilizer.
“In Sri Lanka, there are about 10 million farmers, among whom the large majority is paddy farmers. The government is neglecting the needs of paddy farmers and that is making a disastrous impact on the production. If the present trend continues, the overall paddy production will reduce by 25%, at least, in 2014,” he said.

When the demand-supply theory and other market dynamics are applied to this situation, one does not require Einsteinian wisdom to realize that paddy prices are likely to go up vis-à-vis the decline in production.
“But there is another problem. Although the paddy prices might go up, that does not mean that the farmers on the ground will get any benefit. When the production goes down, the paddy will be purchased by intermediaries at unreasonably low prices. In the same manner, the paddy will be sold to consumers at unreasonably high prices. In the end, intermediaries will thrive on such a situation,” he added.

On contrary to the views held by farmers and trade unions, Agriculture Minister Mahinda Yapa Abeywardena said excessive use of chemical fertilizer has become the bane of paddy cultivation of Sri Lanka.

“Experts at the Agriculture Ministry have repeatedly pointed out that there is a huge amount of chemicals in the soil and this is not a good omen for the country’s agriculture sector. That is why the government has made a decision to encourage farmers to use organic fertilizer and do away with chemicals. But the problem is that farmers do not seem to understand the gravity of the problem. They only look at short term benefits and not the long term consequences,” Agriculture Minister Mahinda Yapa Abeywardena told The Sunday Leader.

The Minister assured that the use of organic fertilizer instead of chemical fertilizer will not result in any difference where the overall production is concerned.
“We did not make this move as an ad hoc measure. Prior to making the decision, we had a number of discussions with experts and agriculture specialists. They clearly stated that the condition of Sri Lanka’s soil is deteriorating due to chemicals used in fertilizer. But the problem is that the farmers are not ready to embrace the change. They do not want to change their practice and they fear that organic fertilizer is less effective. There is no such issue and Sri Lanka has been using organic fertilizer quite successfully from time immemorial,” the Agriculture Minister said.
“But, there might be a decline in production due to extra-ordinary weather patterns, and that has nothing to do with the use of fertilizer,” he added.

The minister denied claims made by trade unions in the agriculture sector that the government is preparing ground to revoke the fertilizer subsidy. Although the ministry has decided to promote organic fertilizer over chemical ones, the minister said the government would proceed with the fertilizer subsidy.
A senior official involved in the Agriculture sector told The Sunday Leader that there is a serious communication gap between the government and the farmers.

“The farmers are not aware of the negative consequences of chemical fertilizer and, at the same time, the government is not giving solutions to the short term problems faced by paddy farmers. As a result, the farmers are greeting the decisions made by the government with suspicion,” he added.

When asked whether there will be a shortage of rice as a result of the decline in production, the official said the government would be inclined to export more rice if and when there is a drop in production.
“There will not be a shortage of rice. But that will make a serious negative impact on prices.”
Both the government and the paddy farmers are in agreement with the fact that there might be a decline in production in 2014, although they attribute the outcome to two different reasons.

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