Creating a New Poor: the Fertiliser Ban that Marked the Beginning of the End
Photo courtesy of Japan Times
Although Sri Lanka takes pride in being an agricultural economy, the agricultural sector only contributes to 7.4% of the national Gross Domestic Production (GDP) out of which only 5.2% comes from farming. Despite the relatively low contribution to GDP, employment in the agricultural sector has remained disproportionately large. In 2020, labour force participation in the agricultural sector was 23.7%, meaning that nearly a quarter of the labour force engages in natural resource dependent livelihoods. Being dependent on a natural resource base increases risks associated with vulnerable livelihoods due to plant growth aspects, market factors, and erratic changes in weather patterns, that have been both frequent and severe in the recent past. It is because farmers assume such financial risks the fertiliser subsidy was introduced for paddy in 1962 to allow farmers to switch from farming traditional rice varieties to high yielding rice varieties and to meet the demand for paddy.
Unforeseen at the time, the implementation of the policy has led to an overdependence on and overuse of chemical fertiliser by farmers, which has undoubtedly created a detrimental effect on farming, farmer health and the environment over the years. It is under this guise that the former administration led by then President Gotabaya Rajapaksa banned the importation of chemical fertiliser, essentially overnight, in a dramatic and an unforeseen speed. The subsidy was removed once before in 1990 on account of its burden on the treasury but was re-implemented four years later. The 2019 ban differs from its 1990 precursor in that the fertiliser subsidy was reversed in favour of consumer health, as justified by President Rajapaksa. However, evidence coming to light shows that the ban was implemented in an attempt to curtail the mounting debt crisis Sri Lanka was facing as it was at the brink of bankruptcy in early 2020.
On the whole, the consequences of the ban on the economy and farmer livelihoods have been catastrophic. It has resulted in the Maha seasonal harvest in 2020/21 to drop by 37% as opposed to the previous year. In fact, the last Maha seasonal harvest was the record lowest yield the country had witnessed since 2003/04, with the exception of 2016/17 which experienced prolonged droughts since mid 2016 due to a climate anomaly that caused an unusual switch between La Nina and El Nino phenomenon; a sequence witnessed only 4 times in the past 150 years. The drop in yield in 2020/21 Maha season has precipitated a national food crisis amidst food shortages and price hikes and has drastically reduced the already low income of a group of people that are vulnerable to climate challenges, essentially pushing them into a new class of poor.
“This fertiliser ban dragged our livelihoods into a crisis. We had to purchase and make organic fertiliser, but it didn’t work out well. In the last Maha season, my harvest reduced by more than 50 per cent,” said a large scale rainfed paddy farmer.
Anecdotal evidence from farmers interviewed in August 2022 for a study on the interlinkages of environmental and sustainable development policies done in collaboration with the Stockholm Environment Institute (SEI) shows that farmers have seen a decline in their yield in 2020/21 Maha season and were anticipating a further decline in the yield in the then forthcoming Yalaseason. Farmers have offset the resultant decline in income by cutting down on major expense groups such as food expenditure. Some had even shifted from commercial farming to subsistence farming in order to ensure that their own families had something to eat.
“We are getting a very low harvest and as a result of that our earnings have gone down. Due to the skyrocketing prices of goods, our expenditure has gone up by two or three times. We reduced our fish and meat consumption. We used to consume fish quite often but now we rarely consume fish. Our appetite also has reduced as there is no fish or meat on our plates. As a result of that the food intake has gone down. We don’t eat as much as we did,” said a smallholder.
Exacerbating the situation of vulnerability, the rise in input cost following the fertiliser ban – including labour, fuel and available inorganic fertiliser – has meant that farmers have shifted away from agriculture in search of other livelihood opportunities that help them make ends meet. This has essentially disrupted a livelihood system upon that the majority of rural dwellers depended.
In general, the safety nets available to farmers are the Farmer’s Pension and Social Security Scheme and Agricultural Insurance of which the latter covers crop damages from climate risks and wild animal attacks. Neither scheme was applicable to cover losses borne by the fertiliser ban. Even if they had been so, it would have been inaccessible to many beneficiaries as these two policies are known for being inefficient and/or having difficult bureaucratic and paperwork procedures.
The only relief made available to farmers during this period has been the haphazard handing out of the Rs. 5,000 relief packages and, at times, the ration pack, which has been adopted as a quick response to crises since the beginning of the COVID-19 pandemic; a pill for every ill. There has been no cohesive way of addressing this issue as the uncoordinated distribution of relief packages have also put a strain on the national economy. In a way, such relief measures were designed to address the symptoms of a larger condition which the policymakers and other government officials had failed to acknowledge and address in the first place. When the farmers themselves raised their concerns over decreasing yields, incomes and conditions of living, the government decided to implement a grievance mechanism to compensate for the losses borne by farmers. However, this mechanism was conditional as the government required farmers to provide evidence of the lack of chemical fertiliser having caused the losses they experienced. Proper processes of acknowledgement and accountability could not be seen from the government.
The impact of this ad hoc policy ban was not the only thing that affected the farmers and their families. The political and economic crisis due to the cumulative result of COVID-19 coupled with inefficient and incompetent fiscal and monetary policy decisions by the government have also affected farmers. While food prices skyrocketed, in part due to the chemical fertiliser ban, a situation arose wherein there was a supply shortage of produce and food in the domestic market. As the foreign reserves declined, the government struggled to import the needed food items into the country. This provides great insights into the lack of synergy and incoherence between different policies, acting in silos within the national framework, deterring a conducive environment in achieving a larger national.
Although the government entered into agreements, loans and credit lines in order to secure food items and other essentials, they have not aided the public in a meaningful way. This is reflected in the ever increasing inflation rates (69.8% as of September 2022), food insecurity (an estimated 6.3 million individuals as of September 2022) food inflation (94.9% as of September 2022) and malnutrition among people, especially children (an estimated 1.7 million children; the second-highest rate of malnutrition in children in South Asia). Apart from the credit lines secured for fuel, Sri Lanka secured a credit line of further $55 million from India Exim Bank in order to purchase fertiliser.
In hoping to address the lack of organic fertiliser, the government attempted to import 20,000 tonnes of organic fertiliser from Qingdao Seawin Biotech Group based in China. However, as the fertiliser consignment reached the country, the National Plant Quarantine Service (NPQ) released a statement claiming the imported batch of organic fertiliser not being sterile and not suitable for use. Offended by this statement, Qingdao Seawin pressured the government into compensating for the already shipped organic fertiliser consignment. The government was compelled to pay Qingdao Seawin $6.87 million, pointing to the need for transparency, accountability and standardisation processes in government decision making.
Perhaps the most visible manifestation of this crisis is the fuel shortage that has made farming even more difficult. The effort required in securing fuel meant that farmers could no longer rely on machinery, which affected farmers’ productivity heavily.
“Using machinery for harvesting was basically a gamble for us. The nearest petrol station is a couple of kilometres away from our farm. We couldn’t know for sure whether there would be fuel at the station. So, we would then go to the petrol station wasting the little amount of fuel we had left and come back home again with nothing. It’s a difficult period for us now. Combined with the increased cost of labour and fuel price hikes, we will essentially be farming at a loss. So, it makes more sense not to engage in farming at all,” said a smallholder.
A report by the Rice Research and Development Institute (RRDI) in 2013 recommends that a mixture of both organic and chemical fertilisers at a ratio of 30:70 to be used with organic fertiliser application not exceeding 50%. This proposition was drafted considering the difficulty or impossibility in switching completely to organic farming methods, which would require large amounts of organic material and the likelihood of resulting in a possible food shortage due to lower yields as well as concerns over affordability. However, this policy was not operationalised until the introduction of the chemical fertiliser ban in 2021. Although farmers were compelled to start using more organic fertiliser, it has indeed come at a significant cost at the farmers and food security.
Policymakers often forget that there is a nexus between the environment and society when policies are formulated, enacted and implemented. Although the conservation of the environment and sustainable development are of utmost importance, implementing policies to this end could lead to major societal costs when there is no coherence between the implemented policies. There is more of a likelihood of such poorly implemented policies affecting those who lack the means and agency to protect themselves from their (un)intended consequences; the poor. While those who have the means to remain unaffected by the results of incoherent policies – the ever increasing food shortages, malnutrition and food inflation in this instance – those who are already vulnerable are pushed further into poverty, exacerbating inequalities persistent within society.
Banning organic fertiliser was implemented to deal with avoiding bankruptcy under the guise of promoting organic and sustainable agriculture and nutritious food. Masking the real reason shows the lack of foresight and concern over the impact on its citizenry, wherein saving face by attempting to ease the country of its debt burdens, albeit strategically, comes first. However in doing so, the government only succeeded in creating a new poor and adding further foreign debt and credit lines to its portfolio.
The article can also be read at https://www.cepa.lk/blog/creating-a-new-poor-the-fertiliser-ban-that-marked-the-beginning-of-the-end/