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Rising global fertiliser price burdens farmers struggling with input costs
View(s):Despite the government introducing a controlled price of Rs 10,200 for fertiliser, farmers say they do not have enough cash to go around for the costs they have to bear.
Farmers can collect a 50-kilo bag of urea at the controlled price per acre and are forced to source the remainder from the market.
Rasarathinam Ilankumaran, 60, a farmer from Vaddakachchi in Kilinochchi, told the Sunday Times that many farmers are in debt, having pawned their jewellery or buying on credit at higher prices.
“The dried paddy price has also dropped in recent weeks; farmers are unable to sell their remaining stocks to meet the rising costs of diesel and labour,” he said, expressing a bleak outcome from his five acres of land for the Yala season.
“The cost of production of paddy increased significantly this season from Rs 120,000 per acre to Rs 140,000. With paddy prices going down, I am not sure how we are going to manage this situation.’’
Even if fertiliser is available, Mr Ilankumaran noted that farmers are unable to purchase enough because they don’t have enough money.
To meet the fertiliser needs and combat the ‘fertiliser black market mafia’, the government has decided to supply urea at a fixed price of Rs 10,200 by purchasing from companies at a higher price and selling it at a subsidised controlled price.
Addressing Parliament on April 7, President Anura Kumara Dissanayake said the government would absorb an additional Rs. 3,000 per bag, with the market price estimated at Rs. 13,500 to Rs 14,000 per bag.
The total cost of this intervention is estimated at Rs 1.7 billion.
According to the World Bank Group’s latest Commodity Markets Outlook, fertiliser prices are projected to increase by 31% this year, driven by a 60% jump in urea prices.
Fertiliser affordability will fall to its worst level since 2022, eroding farmers’ incomes and threatening future crop yields, the report stressed.
On March 31, the price of urea – the world’s most widely used nitrogen fertiliser – reportedly jumped from around US$400 per tonne to US$700 and later spiked to US$800 as well due to the closure of the Strait of Hormuz in the Middle East, through which over 30 per cent of fertiliser supplies are distributed.
Deputy Agriculture, Livestock, Land, and Irrigation Minister Namal Karunaratne said last Friday (1 May) that fertiliser prices would increase in the coming months due to higher shipping costs linked to the West Asian war.
When asked whether the government has enough fertiliser stock, Mr Karunaratne said the government would not be able to distribute the required amount to farmers. “That’s why we introduced the rationing system.”
“In addition, we will also distribute a cash grant of Rs 60,000 per hectare to farmers,” he said, adding that the cash is being credited.
National Agrarians Unity, a collective of farmers’ unions, urged the government to ensure the timely distribution of required fertilisers and cash grants.
Anuradha Thennakoon, president of the collective, told the reporters this week: “What they distribute to farmers is not enough. The government has to ensure adequate fertiliser is available at a reasonable price.”
Soon after the West Asian tensions erupted in early March, Agriculture, Livestock, Land and Irrigation Minister Lal Kantha assured that there was no shortage of fertiliser and that the government had adequate stocks in its warehouses.
But in the underground market and in some companies, Mr LaL Kantha observed, prices on existing stock had been raised.
A 50 kg bag of urea is priced at Rs 14,000 to 15,000. Farmers said they purchased the same quantity for the last Yala season (2025) for Rs 8,500.
Mr Lal Kantha also indicated that the moves are underway to import fertiliser from China on a government-to-government basis ahead of the upcoming Maha season as well.
| Viet Nam offers 10MT of fertiliser The government secured a donation of 100 MT of fertiliser on Friday during the bilateral visit of Viet Nam’s President To Lam. The consignment was presented by Viet Nam’s Minister of Finance, Ngo Van Tuan, and the Chief Executive Officer of the Viet Nam National Chemical Group, Nguyen Huu Tu, to the Secretary to the Ministry of Agriculture, D. P. Wickramasinghe. President Anura Kumara Dissanayake said the Vietnamese government had responded positively to Sri Lanka’s request to procure fertiliser from Vietnam. | |
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