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Thursday February 29th, 2024

Sri Lanka moves to relax fertilizer ban for some crops as food prices soar

CLOSED SHOP: The economic centre in Nuwara Eliya was closed after farmers refused to send produce.

ECONOMYNEXT – Sri Lanka is progressively relaxing a sudden ban on chemical fertilizer and allowing urea and ‘plant nutrients’ for several crops, a top official has said, while the minister of agriculture has denied any relaxation for paddy or vegetables.

Secretary of the Ministry of Agriculture Udith K Jayasinghe has told media that it was not possible to meet all fertilizer needs from domestically produced fertilizer.

“The nitrogen content of organic fertilizer is about 3 to 4 percent,” Jayasinghe explained. “For paddy, 80,000 metric tonnes of nitrogen is needed for this season.”

“This cannot be done entirely from compost fertilizer domestically.”

However, Agriculture Minister Mahindanda Aluthgamage has denied that chemical fertilizer would be allowed for paddy and vegetables.

Sri Lanka’s vegetable prices have almost doubled to around 300 to 600 rupees kilogram witph heavy rains also adding to the problem. In Sri Lanka, vegetable prices tend to move up in November and December but the 2021 price spikes are unusually high.

Sri Lanka has also been printing money over the past year, driving up excess liquidity to around 200 billion rupees at one time.

When money is printed excess demand in the domestic economic drives up prices as their recipients – usually state workers – appropriate goods and services and forex shortages are also created as import demand goes up. Later recipients of printed money see prices go up.

The economic centre in Nuwara Eliya, a key vegetable producing region was closed Sunday after farmers refused to send crops.

Traders at economic centres have said that incoming crops had plunged. At Colombo’s Manning Market, daily inflows of vegetables have fallen from 2.5 million kilos to around 500,000 tonnes.

Jayasinghe said heavy rains had contributed to washing away fertilizer.

He said permission had been given to import fertilizer for export crops such as tea, rubber and coconut and also specialist fertilizer needed for greenhouse cultivations.

Jayasinghe said second-generation fertilizer has been recommended by expert committees who went into the matter.

In Sri Lanka due to subsidies on basic chemical fertilizer which started in 2005 advanced fertilizer use is limited and excessive use has been promoted, critics have said.

Minister Shashindra Rajapaksa said a decision will be taken at a meeting with President Gotabaya Rajapaksa on Monday on the fertilizer ban.

Minister Aluthgamage told parliament late on Monday that a specialist fertilizer and agro-chemicals for vegetables had been allowed to be imported.

Sri Lanka banned chemical fertilizer after the Government Medical Officers Association and a Buddhist monk Athuraliye Rathana carried on a campaign against them, claiming that kidney and other non-communicable diseases were caused by agrochemicals (wusser visser).

The GMOA has said that according to Pliny the Elder, a Roman author ancient Sri Lankans had lived for over 140 years when there were no chemical fertilizers.

“Do not think that just because we say chemical fertilizer it is poisoned (wussais vissai),” he said.

He said science should be used for decision-making.

Jayasinghe said insecticides and weedicides had been allowed.

He said a tonne of urea had moved up to 800 to 1,000 US dollars and there were difficulties in getting the best quality fertilizer.

There may be some possibilities of getting fertilizer to government deals, he said. (Colombo/Nov20/2021)

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Sri Lanka’s RAMIS online tax collection system “not operatable”: IT Minister

ECONOMYNEXT – Sri Lanka’s online tax collection system RAMIS is “not operatable”, and the Ministry of Information Technology is ready to do for an independent audit to find the shortcomings, State IT Minister Kanaka Herath said.

The Revenue Administration Management Information System (RAMIS) was introduced to the Inland Revenue Department (IRD) when the island nation signed for its 16th International Monetary Fund (IMF) programme in 2016.

However, trade unions at the IRD protested the move, claiming that the system was malfunctioning despite billions being spent for it amid allegations that the new system was reducing the direct contacts between taxpayers and the IRD to reduce corruption.

The RAMIS had to be stopped after taxpayers faced massive penalties because of blunders made by heads of the IT division, computer operators and system errors at the IRD, government officials have said.

“The whole of Sri Lanka admits RAMIS is a failure. The annual fee is very high for that. This should be told in public,” Herath told reporters at a media briefing in Colombo on Thursday (29)

“In future, we want all the ministries to get the guidelines from our ministry when they go for ERP (Enterprise resource planning).”

President Ranil Wickremesinghe’s government said the RAMIS system will be operational from December last year.

However, the failure has delayed some tax collection which could have been paid via online.

“It is not under our ministry. It is under the finance ministry. We have no involvement with it, but still, it is not operatable,” Herath said.

“So, there are so many issues going on and I have no idea what the technical part of it. We can carry out an independent audit to find out the shortcomings of the software.”

Finance Ministry officials say IRD employees and trade unions had been resisting the RAMIS because it prevents direct interactions with taxpayers and possible bribes for defaulting or under paying taxes.

The crisis-hit island nation is struggling to boost its revenue in line with the target it has committed to the IMF in return for a 3 billion-dollar extended fund facility. (Colombo/Feb 29/2024) 

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Sri Lanka aims to boost SME with Sancharaka Udawa tourism expo

ECONOMYNEXT – Sri Lanka is hosting Sancharaka Udawa, a tourism industry exhibition which will bring together businesses ranging from hotels to travel agents and airlines, and will allow the small and medium sector build links with the rest of the industry, officials said.

There will be over 250 exhibitors, with the annual event held for the 11th time expected to draw around 10,000 visitors, the organizers said.

“SMEs play a big role, from homestays to under three-star categories,” Sri Lanka Tourism Promotion Bureau Chairman, Chalaka Gajabahu told reporters.

“It is very important that we develop those markets as well.”

The Sancharaka Udawa fair comes as the Indian Ocean island is experiencing a tourism revival.

Sri Lanka had welcomed 191,000 tourists up to February 25, compared to 107,639 in February 2023.

“We have been hitting back-to-back double centuries,” Gajabahu said. “January was over 200,000.”

The exhibition to be held on May 17-18, is organized by the Sri Lanka Association of Inbound Tour Operators.

It aims to establish a networking platform for small and medium sized service providers within the industry including the smallest sector.

“Homestays have been increasingly popular in areas such as Ella, Down South, Knuckles and Kandy,” SLAITO President, Nishad Wijethunga, said.

In the northern Jaffna peninsula, both domestic and international tourism was helping hotels.

A representative of the Northern Province Tourism Sector said that the Northern Province has 170 hotels, all of which have 60-70 percent occupancy.

Further, domestic airlines from Colombo to Palali and the inter-city train have been popular with local and international visitors, especially Indian tourists. (Colombo/Feb29/2024)

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Sri Lanka rupee closes at 309.50/70 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 309.50/70 to the US dollar Thursday, from 310.00/15 on Wednesday, dealers said.

Bond yields were slightly higher.

A bond maturing on 01.02.2026 closed at 10.50/70 percent down from 10.60/80 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.10 percent from 11.90/12.00 percent.

A bond maturing on 01.07.2028 closed at 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.30/45 percent up from 12.20/50 percent.

A bond maturing on 15.05.2030 closed at 12.35/50 percent up from 12.25/40 percent.

A bond maturing on 01.07.2032 closed at 12.55/13.00 percent up from 12.50/90 percent. (Colombo/Feb29/2024)

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