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Monday December 11th, 2023

Sri Lanka fertilizer ban too sudden, fraught with uncertainty, farmers unprepared

ECONOMYNEXT – Sri Lanka’s plan to move into organic fertilizer was a good move in principle but the sudden shift has left farmers fearful and the agriculture sector unprepared, private sector officials closely involved in agriculture have warned.

“It is a noble objective. It is an objective we have to pursue but there is a certain pathway,” Dilhan Fernando, Chief Executive of Dilmah Tea Company told a forum hosted by Ceylon Chamber of Commerce.

“It involves re-generation of soils, multiple adaptations including the infrastructural knowledge, the systems, and processes that will, first of all, establish the parameters.”

“None of these have been done. So, a lot of the discussions that are happening now should have happened a few years ago.”

Analysts have said one of the problems for Sri Lanka’s economic problems along with monetary instability (money printing and currency collapses) is regime uncertainty, which involves policy uncertainty and expropriation and nationalism, which triggers ethnic strife.

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Sri Lanka has banned fertilizer imports from the upcoming main Maha cultivation to save 400 million US dollars in import costs after money printing triggered foreign exchange shortages.

Sri Lanka Government Medical Officers Association an influential policy driver had said agrochemicals caused non-communicable diseases and Sri Lanka’s ancestors lived for 140 years in Roman times according to Pliny the Elder’s encyclopedia when there were no agrochemicals.

Muddy Mandates

After self-determination from British rule and the breaking of the permanent civil service, Sri Lanka has lost the ability to do evidence-based policy making, using green papers, white papers followed by expert and public consultation, critics have said.

Instead, policy upheavals are done by in ‘policy by manifesto’, a deadly process done in political backrooms by people with special interests and poor technical knowledge, experts with experience in evidenced-based policy-making have said.

They are then carried out on the basis of a ‘mandate’.

Sri Lanka’s misguided state priorities and how to reset them

“But this is a muddy mandate. Each manifesto contains a multiplicity of promises. Was the vote a considered approval for each of those promises?,” Rohan Samarajiva, founder of LIRNEasia, a regional think tank who was involved in Sri Lanka’s telecom and South Asian aviation liberalization questions.

“Manifesto making is political. Experts or those who are perceived as experts may be called in to contribute, but the principal criterion is not expertise, but trust.

“Those who have been involved in manifesto making will testify to the opacity of the process, wherein what is accepted one day can disappear in the next and new clauses and conditions can mysteriously appear even after “finalization.”

Meanwhile, Fernando said Bhutan, a South Asian neighbor that adopted similar methods but their consumer prices increased. Switzerland recently dropped a plan to ban agrochemicals.

In Sri Lanka, organic foods are already priced higher than ordinary products in supermarkets.

Government spokesmen themselves have claimed that organic foods fetch premiums in export markets while trying to convert a country where children of poor families already face malnutrition and stunting.

No Strategy

Rohan Fernando, Managing Director, Aitken Spence Plantation Managements said a practical strategy was needed to transform an entire agricultural sector.

“Like anything, you have to build a strategy and this is something long-term,” he said. “If we build a good strategy, it can be implemented but not something that could be done overnight. We could face unwanted problems.”

Dilhan Fernando, CEO of Dilmah Tea Company said the objective has to be reached incrementally and care should be taken not to generate greater risks.

“First we have to reduce artificial inputs,” Fernando said. “That is an absolute no-brainer because we cannot continue on this present trajectory but to be done step by step.

“If you have a population that has been depending on certain agricultural methods over centuries, suddenly to change over can introduce other use of chemicals that may have not been approved, that can create a far greater danger.”

Sri Lanka has banned fertilizer from the next season Maha or main cultivation season. Sri Lanka is also planning to import some organic fertilizers, which could also have various unknown impurities.

Fraught with Uncertainty

There have been widespread farmer protests. Farmers are also apprehensive due to uncertainty and lack of expertise.

“It is a situation of unknowns,” Charitha Subasinghe, President – Retail, John Keells Holdings, which works with farmers and sells fruits and vegetables through an island-wide chain said.

“When we talk with the farmers and work with them, the unknown is what is worrying the farmer. The question is that can we do it overnight or should it be phased out is the question that is working in the minds of the farmers.”

He said there seemed to be too many unknowns to predict how everything will pan out.

Shea Wickramasingha, Group Managing Director, Ceylon Biscuits Limited, the group had been involved in exporting organic spices, fruits, and coconut.

“The idea and thinking are very good but it can’t be done overnight,” she said.

“When we stopped using chemical fertilizers in soya cultivation, we did a lot of trials and research.

“And also you need to ensure farmers income does not come down. So when you are converting to organic fertilizers you need to do it in a way your output is not reduced.”

“There’s a lot of work, you cannot just say that from today you are going to use organic fertilizers, there is a lot of challenge but we need to have a strategy.” (Colombo/Aug26/2021)

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Sri Lanka’s ousted utilities regulatory chief convinced he’ll be president

ECONOMYNEXT — Sri Lanka’s former public utilities regulatory chief Janaka Ratnayake, who was removed in May following a parliamentary vote, has confirmed that he intends to run for president.

Speaking to reporters on Sunday December 11 in the wake of an hours-long island-wide power outage the previous evening, Ratanayake said he will be the definite winner at a future presidential poll.

“I announced [my intention to run] officially on December 07, my birthday. I’m definitely coming as a presidential candidate. That’s not all, I’m the definite president at a future presidential election,” he said.

Ratnayake, in his first media appearance in months, was responding to questions about newspaper advertisements published on December 07 announcing his future candidacy.

Sri Lanka’s parliament on May 24 opted to remove the former chairman of the Public Utilities Commission of Sri Lanka (PUCSL), with 123 members voting in favour. This marked the first time a head of an independent government commission was sacked by Sri Lanka’s parliament.

Power & Energy Minister Kanchana Wijesekara, who had been at loggerheads with the regulatory chief, said at the time that the official had acted obstinately without the concurrence of fellow commission members.

The minister levelled five charges against Ratnayake, the first twoof  which were based on a February 10 verdict by the Court of Appeal rejecting an application filed by the offiical against an electricity tariff hike. Opposition legislators slammed the decision saying it undermined independent commissions.

Ratnayake’s presidential ambitions have been known for some time. A day before parliament voted to remove him, he told reporters: “If I can change the country, I will definitely join politics, because my intention is to serve the people and what is right.”

Ratnayake had blocked delayed a tariff hike in early 2023, resulting in losses to the state-run Ceylon Electricity Board (CEB), Minister Wijesekara claimed at the time. The PUCSL had als onot enabled tariff hikes for nine years, requiring its governing law to be changed, Wijesekera said.

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Sri Lanka wants university research to lead to commercially viable products

ECONOMYNEXT – Sri Lanka’s ministry of industries wants to ensure commercially-ready products and services are produced by university research, by facilitating partnerships with factories and entrepreneurs.

After a currency crisis, Sri Lanka’s government is in a drive to boost its trade balance by increasing exports.

“Our export basket hasn’t changed recently, partly because our small and medium entrepreneurs don’t have sufficient research and development facilities (like the multinationals) to innovate their products for the export market,” Additional Secretary of the Ministry of Industries, Chaminda Pathiraja said.

“At the same time, state universities and research institutes produce a large amount of research findings yearly, which end up sitting in those institutions; they don’t reach the industry,” Pathiraja said at a press briefing to announce a program on commercialization of new products and research, to be held tomorrow at the Waters Edge.

The networking forum will bring innovators and manufacturers together to focus on the commercialization of research for the value added tea, coir, spice, dairy products, gem and jewellery and packaging products industries.

“We want to encourage collaboration, through programs like our University Business League etc, so that the research output can be commercialized, and what is produced by our factories can increase in quantity and quality. We must focus on the export market.”

The objective of this program, he said, was to reduce the gap in acquiring innovators’ ideas and skills by the investors, and ultimately boost the manufacturing sector’s efficiency in alignment with the export market.
(Colombo/Dec11/2023)

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Sri Lanka rupee opens at 327.00/50 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee opened at 327.00/50 to the US dollar on Monday, from 327.00/30 Friday, dealers said.

On the Colombo Stock Exchange, both indices opened up: The All Share Price Index 0.28 percent at 10,823, and the S&P SL20 0.35 percent at 3,113.85.

Bond yields were up.

A bond maturing on 01.08.2026 was quoted at 14.05/20 percent from 14.05/15 percent.

A bond maturing on 15.01.2027 was quoted at 14.05/20 percent from 14.10/25 percent.

A bond maturing on 01.07.2028 was quoted at 14.20/50 percent from 14.20/35 percent.
(Colombo/Dec11/2023)

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