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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 863

Rs. 50 Billion Fertilizer subsidy: An investment to re-establish Sri Lanka’s past Glory and Grandeur

A.A.M.Nizam in Colombo

president.jpgIt was due to the visionary agriculture policy adopted by President Mahinda Rajapakse that Sri Lanka felt no impact of the global food crisis that led to riots in many countries and which were even a forerunner for government changes.

As promised in the Mahinda Chintana, steps were taken by President Mahinda Rajapaksa from his first budget itself to provide fertilizer to farmers at a subsidized rate of Rs. 350/= per 50 kg bag. When it was announced many in the opposition claimed that it is not a sustainable move and they even predicted that it will be withdrawn within a few months, as the market price of a 50 kg bag of fertilizer at that time was Rs. 2,500/=.

Disproving these cynical predictions and despite prices of fertilizer in the international market more than quadrupling and even in the midst of fighting the terrorist war, the government has maintained its promise and offered fertilizer to paddy farmers without any interruption for 13 harvest seasons and for a period of six years since it was introduced.

Fulfilling the Mahinda Chintana Pledge

Delivering the 2006 Budget speech, the President said that “all arrangements are now being made to provide varieties of fertilizer at Rs. 350 / 50kg bag for paddy cultivation. A similar scheme will also be extended systematically to other small holder farmers to provide fertilizer at an affordable price. Financial incentives will be given to encourage the use of organic fertilizer in fruits and vegetable cultivation. We will focus on internationally accepted tariff controls to provide a proper balance for our locally grown produce, as well as to keep the price levels acceptable to consumers”.

The main reason that drove President Mahinda Rajapaksa to provide the fertilizer subsidy was his first hand experience about the problems faced by small scale farmers to purchase fertilizer. There were times that small scale farmers even pawned their jewelry to purchase fertilizers to small plots of paddy fields with an extent of one or two acres. Despite many pronouncements about the advantage of organic fertilizer these small plots of paddy lands were so adapted to chemical fertilizer and without which a good harvest became almost doubtful and hence they were forced to spend their hard earned wealth for the purchase of chemical fertilizer.

This uninterrupted measure of providing fertilizer at a subsidized rate has benefited Sri Lanka in two ways. It has removed the burden of the farmers of spending a large amount of money, which a few moons ago made them destitute and forced them to commit suicide in their hundreds, and encourage them to bring more land under paddy cultivation.

The Only Commodity with no change in price for over 6 years

The fertilizer subsidy together with the measures introduced in the very same budget for 2006 to revive the Paddy Marketing Board, which was made redundant by the previous United National Party government under its open market policies, and to offer guaranteed prices for paddy, thus salvaging farmers from being enslaved to the intermediate paddy mill owners and gave boost to paddy production in the country and made the country gradually self sufficient in rice. Fertilizer for paddy has been the only commodity that has remained without a price increase for the last six years.

While many countries in the region and other continents spend a large percentage of their annual budget for the import of their staple food, Sri Lanka was saved from this burden due to pragmatic, far sighted and farmer friendly policies introduced by the Mahinda Rajapaksa governments.

The fertilizer subsidy introduced in 2005 of providing 50 kg bag of Urea, TSP and MOP fertilizer at Rs. 350/= was only 10% of the actual cost of the fertilizer and 90% of the cost was absorbed by the government. In some seasons the price of 50 kgs bag of these fertilizer increased even up to Rs. 8,000/= and despite that the government continued to provide the fertilizer at the subsidized rate of Rs. 350/- per bag and continuously for 6 years covering 13 harvesting seasons. The government spends Rs. 34,850 Million annually for the fertilizer subsidy for paddy alone. The government considers this expenditure positively as an investment for paddy production.

Self Sufficiency in Rice production

Production of paddy which was only 3,246,000 metric tons in 2005 has increased to 4,044,000 metric tons by 2010. In 2008 Sri Lanka was only 80% self sufficient in rice production and this has increased to 117% by 2010.

Conference of Farmer Leaders

Meanwhile, a Special Conference will be held at Temple Trees, Colombo to educate the farmer community on the government’s fertilizer subsidy. This Conference will be held under the patronage of President Mahinda Rajapaksa on the 23rd of this month, and around five thousand farmer leaders are expected to attend the event.

The government has extended the fertilizer subsidy from paddy cultivation to other crops as well. Minister S.M. Chandrasena said that the farmer community is not properly aware about the government’s commitment to provide the fertilizer subsidy, and the objective of the Conference is to enlighten them about the facility available and advantage the farming community could avail under this scheme.

The Director of the National Fertilizer Secretariat Ranjith Dharmawadena said that the government has taken measures to import high quality fertilizer to the country, and the quality of the fertilizer is being closely monitored at the time of shipping, and till it is supplied to the farmers through various stages

Extension of the Subsidy to other crops

With the addition of fertilizer subsidy to other crops as well, the government will spend an additional expenditure of Rs. 16 Billion annually. Accordingly the total government expenditure on the fertilizer subsidy will amount to Rs. 50.16 Billion annually. There is no government in the world that spends such a huge percentage from its national budget on a subsidy to particular segment of the community.

In the meantime the government has also activated the Agrarian Services Centres throughout the country to assist the farming community to get their fertilizer and other requirements. These Centres which were established during the time Mr. Hector Kobbekaduwa, who was the Minister of Agriculture, died a natural death during the U.N.P. government period as government assistance to farmers and subsidies to farmers were either curtailed or bunged. There are 557 Agrarian Services Centres throughout the country.

Agrarian Centre Network

Services provided by these centres include solving farmers land and other problems, registration of Farmers Organisations, holding seminars and workshops to farmers to introduce modern techniques and cultivation methods, overseeing irrigation facilities, development of infrastructure required to the farming communities, planning cultivation activities on a streamlined manner, helping the farmers on obtaining bank loan and facilities required for improvement of their cultivation activities, testing of soil conditions and recommending necessary modifications, organizing the farmers for membership in Farmers Pension and other similar beneficial schemes, holding harvesting meetings for planning harvesting activities for the ensuing seasons, coordination with government departments on behalf of the farming community, providing data for the agrarian services department and the government, etc.

It is undoubtedly certain that President Mahinda Rajapaksa being the son of the farmer D.A.Rajapaksa who signed his nomination papers while working in the Medamulana paddy field has taken the correct visionary approach to improve the life standards of the farming community since majority of Sri Lankans belong to the farming community and it is in their endeavour to make Sri Lanka self sufficient in food requirements the country could sail through to make Sri Lanka the wonder national of Asia.

- Asian Tribune -

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