ECONOMYNEXT – A cash payment instead of an in-kind subsidized fertilizer in the years 2016 and 2017 sharply reduced fertilizer imports and use but there was no fall in agriculture yields, Plantations Minister Ramesh Pathirana said.
“In 2016-2017 there was a decrease in fertilizer use,” Minister Pathirana told reporters on June 06.
“The Yahapalanaya government gave cash transfer (mool-yer sahanadarayer) instead of an in-kind subsidy (murtha adaarayer).
“In 2016, after the decision though the use of fertilizer was reduced, there wasn’t a considerable amount of decrease in economic and agricultural productivity (paler-daitharwer)”.
Pathirana said last year 900,000 tonnes of fertilizer was imported.
But in 2016 only 400,000 was imported.
“When compared to that year, 900,000 MT of fertilizer was imported last year,” he said. “Even though the import amount has doubled, the yield did not double.”
This year 300,000 tonnes were imported, he said.
In 2016 and 2017 the cash handout also led to fertilizer disruptions due to price controls imposed by one arm of the government, which the policy making section seemed not be aware of.
Sri Lanka price controls, state interventions hit fertilizer sector
“Despite an increase in global prices of fertilizer and the devaluation of the rupee against the dollar, we were unable to increase selling price in line with these market developments due to government dictating ceiling prices of urea, MOP and TSP,” Sri Lanka’s Agstar Fertilizers said later.
The last administration which came to office promising a ‘social market economy’ kept on many of the earlier price controls and also imposed new ones.
Sri Lanka President Gotabaya Rajapaksa has halted fertilizer imports and said organic fertilizer will be mandatory from the next season amid forex shortages coming from money printing.
Farmers are protesting around the country.
Pathirana said there were fertilizer stocks in the country, but they were not coming to the market and there were disruptions.
Sri Lanka vegetable farmers and small tea farmers are complaining that specialist fertilizer for young plants are not available and the green leaf output will also progressively fall as other types of fertilizer also runs out.
Minister Pathirana said tea needed specific mixes of phosphate and urea and the blended fertilizer was not coming to the market due to distribution disruptions. (Colombo/July07/2021)