The Sunday Times Economic Analysis

The Minister of Agricultural Development, Chamal Rajapaksa has articulated the firm desire to be self sufficient in food. It is no doubt one perspective of the Mahinda Chinthanaya and a cardinal principle of the government's economic and agricultural policies.

In fact it has been an objective of successive governments since Independence. There has been a continuous rhetoric of wanting to attain self-sufficiency in food. The Government's objective, as articulated by the Minister recently was to be "self sufficient in all local food and nutritional requirements".

This is neither realistic nor realisable nor an economically desirable one. Since all our requirements of wheat have to be imported, the government has also indicated that its pricing policy would be such, as to make wheat flour and bread expensive, while rice prices would be relatively cheaper. This policy is likely to succeed to some extent.

In past periods when the relative prices changed there have been shifts in consumption from the dearer to the cheaper cereal. However there are limits to this as ingrained habits and convenience are more on the side of wheat flour. The experience in all rice producing countries of Asia has been one of a shift in favour of wheat. Nevertheless the demand for rice will increase in the future owing to an increase in the population.

Despite the slowing down of an increase in population, during the next twenty years the population is expected to rise by about 4 million. This means that in 2025 we require an additional 400 million kilograms or 0.4 million metric tonnes of additional rice produced in the country to remain self-sufficient. The requirement may be somewhat less if we take into consideration a declining trend in rice consumption.

Even then it may be around 350 million kilograms. Conversely, wheat imports would continue to increase in the future. Since wheat is entirely imported, the projections in demand indicate that wheat imports are likely to increase from the current levels of around 1.10 million metric tonnes to about 1.13 million metric tonnes by 2021. This is a 2.5 per cent increase in imports in the next 15 years.

In the early years after Independence the objective was to be mainly self-sufficient in rice. It was a time when the country imported over one half the rice requirement to feed a population of a little over 7 million. The situation has changed drastically and today the country is more or less self-sufficient in rice in spite of the population being over 19 million. This was achieved by both an increase in domestic production of paddy and a shift in consumption from rice to wheat flour, mainly in the form of bread. In the latter half of the 1950s the government adopted a comprehensive support programme and institutional changes for the development of food crops, especially rice.

A policy of strict control of food imports in the 1960's led to import substitution of other food crops like chillies, onions and potatoes as well as poultry. Food crop production increased till the 1980s. This does not however mean that we should follow the same policies today when both the domestic and global situations have changed.

A recently published study by the Sri Lanka Economics Association (SLEA), gives projections of consumption and production of the main food items. These indicate that there are realistic possibilities of achieving self- sufficiency in a few commodities, while the country would have to be dependent on the import of others like sugar, and milk. The broad implication of this analysis was that self-sufficiency could be achieved in only some areas of agricultural production. The country would have to continue to import substantial amounts of many significant items of food. Self-sufficiency in all food is not possible.

The SLEA study presented at its last annual sessions and published recently in the book Private-Public Partnership in Economic Development, points out that since there are land and water constraints to increasing the extent of paddy cultivation, the sustainability of self-sufficiency in rice would require an increase in yields from current levels of around 3.9 metric tonnes per hectare to about 4.5 metric tonnes. This is an attainable level, as it is still less than half the potential yield level of 10.5 metric tonnes and levels achieved in several parts of the main paddy producing areas such as Ampara, Polonnaruwa and Batticaloa.

The expected scenario with respect to other food is somewhat different. Although the country will continue to be self-sufficient in coconut, the export surplus would be reduced unless there are significant gains in production. Since the extent of land available for new cultivation of coconut is very limited, the increase in coconut production too would have to be achieved by higher yielding, and replanting in existing coconut areas, higher levels of fertilisation and encouragement of coconut cultivation in home gardens. There are efforts currently underway by both the Coconut Research Institute (CRI) and the Coconut Development Authority to boost production. Yet these are seen as rather inadequate in terms of the challenges faced by the industry and the more attractive competing uses for coconut lands. There are no sweet expectations in sugar production. This same study indicates that the country continues to be highly dependent on sugar imports as the trends in sugar production have been unsatisfactory whereas concurrently per capita consumption has increased. By 2021 the country is likely to require importing about 95 per cent of the country's sugar needs. Even with a drastic improvement in production, it is not likely that even 10 per cent of the needs could be met by domestic production. International sugar prices are rising but the country's capacity to increase production is constraints by many factors. So the Minister's expectations are more a dream than a realistic prospect. Current trends in the production of milk lends hope of local milk production achieving levels that could meet about 40 to 50 percent of consumption requirements in 2021. However, much higher investment in the industry spurred by higher prices is needed to achieve this target. The projections in fish production indicate that about 75 percent of the consumption could be met by local production. Since fish production does not have to contend with natural resource constrains, especially as the country has a right to a 200 mile ocean radius, the expansion and modernisation of the fishing fleet and improvement in fishing infrastructure could result in achieving self-sufficiency in fish. However the restoration of peace and normality in the North and East is a pre-requisite.