Sri Lanka struggles to settle massive organic fertiliser bill
Sri Lanka’s Treasury, due to a decision to reverse the move of resorting to organic agriculture, is compelled to pay billions of rupees for organic fertiliser stocks procured from local manufacturers last year.
Organic fertiliser producers have demanded the Finance Ministry to pay Rs.14 billion for their supplies.
As a result of spending almost all the allocation of the agriculture sector for organic farming, the Treasury is left with a meagre sum of Rs. 3.8 billion for the payment of organic fertiliser procurement to local producers although their bill was a massive Rs.14 billion.
In 2021, the Government allocated Rs. 50.7 billion on food crops such as paddy, maize, potatoes, big onions, vegetables and fruits including expenditure on the organic fertiliser subsidy amounting to Rs. 35 billion.
The Treasury has released a sum of Rs. 40 billion to compensate farmers for the losses incurred during the Yala and Maha seasons 2021 due to the government’s policy of banning the use of chemical fertilisers, a senior Treasury official said.
The cost to import nano nitrogen liquid fertiliser (Nano urea) from India was Rs. 9 billion while another sum of Rs.1.3 billion was paid to import 30,000 tonnes of potassium chloride fertiliser.
Local producers have supplied their stocks in accordance with proper tender requirements on the recommendation of the Agriculture Director General and under the supervision of the National Fertiliser Secretariat, President of the Environment-Friendly Fertiliser Producers Association, Shammi Kirinde disclosed.
Although the total value of the stock was Rs. 22 million in accordance with the tender documents, they have been able to supply fertiliser to the value of Rs.16 billion due to the urgent need of farmers, he said adding that even after handing over the necessary documents to relevant authorities, only a sum of Rs 2.4 billion has been paid as a part payment.
A National Fertiliser Secretariat top official, who wished to remain anonymous, told the Business Times that a stock of organic fertiliser worth Rs.12 billion has been distributed among farmers and Rs.2 billion has been paid due to financial constraints.
The Treasury is releasing money on the basis of Rs.100 million per fertiliser manufacturer and the Secretariat has paid a sum of Rs.2 billion to them up to now, he revealed.
Fertiliser stocks have been handed over to the authorities in accordance with a government tender and the agreement with the Lak Pohora Company and Colombo Commercial Fertilisers Ltd, Secretary of the Fertiliser Producers Association Shaminda Kankanamge said.
Although the payment should be paid within 28 days after handing over the stocks the authorities have so far failed to make their payments, he added.
He noted that several manufacturers have spent Rs. 600-700 million for the organic fertiliser production and others had to bear Rs.100-200 million and they had to pay hundreds of thousands of rupees for plastic containers and bags to these suppliers.
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