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Tuesday April 16th, 2024

After fertilizer policy failure, Sri Lanka leader offers record 95 rupees for paddy

President Gotabaya Rajapaksa

ECONOMYNEXT – Sri Lanka President Gotabaya Rajapaksa has ordered his agriculture minister to buy paddy for 95 rupees per kilogramme, amid a chorus of complaints about the government’s ban on inorganic fertilizer that led to a drop in production in the ‘Maha’ cultivation season.

The Maha season usually sees the largest paddy harvest in Sri Lanka’s farmlands found in the island’s rural areas that are home to 70 percent of its 22 million population.

Some farmers did not cultivate in the season because the government could not provide organic fertilizer on time as promised. Others cultivated with whatever they had, but now complain the yield is lower because no weedicide and pesticides were made available by the government.

President Rajapaksa banned agro-chemicals in April last year although the original plan was to phase them out gradually over a period of 10 as per his election manifesto.

Finance Minister Basil Rajapaksa on January 03 offered 75 rupees per kilogramme of paddy as compensation for paddy farmers due to the government’s fertilizer policy which has widely been called a failure.

However, President Rajapaksa has now ordered to raise it to 95 rupees, which is a record high for paddy in Sri Lanka.

“This morning when I met state minister Siripala Gamlath, I asked him ‘are you buying paddy?’ He said, ‘yes, harvest season in Vavuniya is around the corner’,” Rajapaksa said, referring to a legislator who owns one of the top private rice businesses in the country.

“I asked how much he was offering. He said wet paddy is purchased at 80 rupees a kilo while dried paddy is purchased at 90 rupees a kilo,” he added, speaking at a ceremony that marked the opening part of the central express highway from Mirigama to Kurunagala.

“All of you know farmers could not sell their paddy at 25 rupees in the past. Today they sell at 90 rupees. I told the agriculture minister if outsiders are buying at 90 rupees, the government should buy at 95 rupees. That money will go to the farmer. That’s okay,” the president told the gathering.

President Rajapaksa did not comment on the government’s new fertilzer policy, but said it was his government that gave fertilizer free of charge.

“Unfortunately, the opposition instigated several farmers to protest. But who gave fertilizer free of charge? Who increased the minimum price to 50 rupees? It is this government,” he said.

“I call on the farmers to trust us. Although there were some delays and hiccups in the beginning, we are now going forward, doing this the right way.

“I request farmers not to get carried away. I am a president who came forward on behalf of you. That’s why I gave fertilizer free of charge. We are committed protecting farmers.

“Our parents also cultivated. My father is famous among the public those days for coming to parliament straight from a paddy field after washing the mud on him. We will never ever forget farmers,” said Rajapaksa. (Colombo/Jan16/2022)

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Sri Lanka State FinMin meets BCIU in US; discusses post-crisis investment prospects 

ECONOMYNEXT – Sri Lanka’s State Finance Minister Shehan Semasinghe met Business Council for International Understanding( BCIU) in Washington on the sideline of the IMF/World Bank Spring Meetings late on Monday and discussed investment prospects in the island nation which is gradually recovering from an unprecedented economic crisis.
“Our discussion centered on the potential that Sri Lanka offers for international investors. Explored various sectors, including education, tourism, renewable energy, agriculture and technology, where strategic investments can drive sustainable economic growth and development,” Semasinghe said in his X (Twitter) platform. 
“We reviewed the current macro-economic landscape of Sri Lanka, including recent reforms that have transformed to results. Glad to concluded the forum by marking constructive dialogue and a shared commitment to support the economic development of Sri Lanka.” 
“We thank participants, stakeholders holders and global partners for the significant interest shown in unlocking the full potential of the Sri Lankan economy and fostering greater international understanding and cooperation.” (Colombo/April 16/2024) 
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India allows Sri Lanka to import 10,000MT of onions

ECONOMYNEXT – India has relaxed an export ban allowing 10,000 metric tonnes of onions to be shipped to Sri Lanka, the Indian High Commission in Colombo said.

“The exemption for Sri Lanka reiterated India’s Neighbourhood First policy, adding to the Sinhala and Tamil New Year festivities here,” the statement said.

Onion prices went up in Sri Lanka after India and Pakistan banned exports.

The Directorate General of Foreign Trade has issued a notice allowing National Co-operative Exports Limited to ship 10,000 MT of onions.

The UAE has also been allowed to import 10,000MT of onions on top of 24,400MT already permitted.

A large Indian and South Asian expat community lives in the UAE. (Colombo/Apr15/2024)

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Iran President to visit Sr Lanka amid rising tension, inaugurate Uma Oya project

ECONOMYNEXT – Iranian President Ebrahim Raisi will arrive in Sri Lanka on April 24 on a one-day official visit to inaugurate Tehran-assisted $529 million worth Uma Oya multipurpose development project with 120MW hydro power generation capacity, official sources said.

The announcement on President Raisi’s visit comes two days after Iran launched explosive drones and fired missiles at Israel in its first direct attack on Israeli territory, a retaliatory strike that raised the threat of a wider regional conflict.

“The President is visiting to inaugurate the Omaoya project. He will be on a one-day visit,” an official at Iran embassy in Colombo told EconomyNext.

A Sri Lankan Foreign Ministry official confirmed the move.

This is the first time an Iranian President coming to Sri Lanka Iranian after then President Mahmoud Ahmadinejad’s visit in April 2008.

The Omaoya project was originally scheduled to be completed in 2015, but had been delayed several times due to unexpected issued faced during the project cycle and funding issue after the United States imposed economic sanctions on Iran and economic crisis in Sri Lanka.

The project was started in 2010 and the funding was to be received as loan grant from the Iranian government. However, Iran was able to provide $50 million before the sanctions. Sri Lanka has to bear the cost after the sanctions.

The project includes storing water in two reservoirs with dams before being brought through a 23 km tunnel to two turbines located underground and generating hydro power with a capacity of 120 megawatts and added to the national grid.

After power generation, the water is expected to be brought to three reservoirs while supplying water to 20,000 acres of old and new paddy fields in both the Yala and Maha cultivating seasons.

The Memorandum of Understanding (MOU) for the construction was signed between the two countries in 2007 while Sri Lanka’s Cabinet approved the execution of the contract agreement between the Executing Agency, Sri Lanka’s Ministry of Irrigation and Water Management (MOIWM) of the GOSL and Iran’s FARAB Energy and Water Projects (FC).

When commencing the project on March 15, 2010, the scheduled date of completion of the project was on March 15, 2015. But the schedule completion date was extended to December 31, 2020 due to the unexpected water ingress into the head race tunnel and followed by social impacts.

The trade between the both countries suffered after the US sanctions. However, Sri Lanka inked a deal in December 2021 with Iran to set off export of tea to Iran against a legacy oil credit owed by state-run Ceylon Petroleum Corporation to the National Iranian Oil Company.

Sri Lanka owes $251 million for crude imported before the US imposed sanctions on Iran. (Colombo/April 15/2024)

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