Blue Green Revolution in Sri Lanka fades as fertiliser subsidy backfires
The Sri Lankan Government has been forced to bring back the previous chemical fertiliser subsidy scheme as farmers countrywide have vehemently rejected the cash for fertiliser programme aimed at creating a blue green agriculture revolution.
The plan to convert the subsidy to a cash allowance of Rs. 25,000 a year to encourage farmers to move away from using chemical fertilisers was one of the reasons for the local government election debacle of the coalition government, several political and economic advisors to the President have said.
At a Presidential Secretariat meeting recently, they emphasised the need to revise the current fertiliser subsidy programme while ensuring that there will be no fertiliser shortage.
Since 2016 the farmers have been constantly complaining that this money was not sufficient to buy their fertiliser requirement and they were also not receiving the money on time as the Treasury used to delay in depositing the cash allowance in the bank accounts of recipients.
Agriculture Minister Duminda Dissanayake’s proposal to abolish the present subsidy scheme and re-introduce the previous system has been approved by the cabinet.
He has proposed to provide facilities for paddy farmers to buy a 50 kg bag of fertilizer at any retail outlet at a price of Rs. 500.Other crop and vegetable farmers will be able to purchase a sack of fertilizer at a subsidised price of Rs.1200.
A delay in the tender process and a subsequent cancellation resulted in a severe shortage of fertiliser and led to an artificial increase in prices in the recent past.
The minister has proposed several measures to ensure that the fertiliser will be available to farmers on time, including early import of stocks.
As an immediate remedy, a decision has been taken to release the money from the Treasury to paddy, corn. soya, chilies, big onions and potato farmers to buy fertiliser.
The previous fertiliser subsidy was Rs. 350 and with the insurance policy of Rs. 150 it came to a total of Rs. 500 per 50 kg bag.
The Treasury has abolished this scheme under the 2016 budget proposal to reduce its financial burden vis–vis the fertiliser subsidy in which some Rs.50 to 60 billion was paid annually to fertiliser importing companies.
Due to the Treasury’s financial constraints, subsidy payments have got delayed and led to these companies facing severe cash-flow and liquidity problems.
At present the Government provides only Rs. 2,500 per 50 kg fertiliser bag with a total subsidy of Rs. 25,000, but its’ market price is Rs.3000, an independent check made by the Business Times revealed.
The farmers had to pay Rs.500 more than the government’s cash allowance of Rs.300 and they need at least Rs. 30,000 to buy 10 sacks of fertiliser to cultivate in two seasons.
Most of the farmers used to spend the cash allowance on their day-to-day needs, officials said.
National Organiser of the All Ceylon Farmers’ Federation Namal Karunaratne said “they wanted the restoration of the previous fertiliser subsidy scheme and a new certified price for paddy”.
If the government fails to bring back the previous subsidy scheme all farmers will take to the streets in massive countrywide protest to win their demand, he added.
The National Economic Council (NEC) convened under the patronage of President Maithripala Sirisena at the Presidential Secretariat recently, for the first time after the local government elections has decided to review the present fertiliser subsidy scheme of granting cash allowance for formers to buy fertiliser.