One of the major problems
impeding the economic advancement of Sri Lanka is the backwardness of its
agriculture, particularly the paddy sector. This has resulted in retarding the
growth of an internal market and in a failure to release workers (apart from
women, freed by herbicides from their traditional task of weeding) to the
labour market.
Underemployment
Low labour productivity has
dogged Sri Lanka’s agricultural sector, a few years after the British
Occupation became entrenched, following the Colebrooke-Cameron Reforms (from
which historians, conventionally, date the so-called ‘Modern Era’ of Sri
Lanka).
The expropriation of common
land under the Crown Lands (Encroachment) Ordinance and the later Wastelands
Ordinance, removed from the peasantry their access to a marketable surplus.
Their consequent position as subsistence farmers became entrenched when they
became enmeshed in debt traps to usurious trader/moneylenders. Despite the
Paddy Lands Act and Land Reform, the average holding size remains uneconomic,
and farmers do not have the wherewithal to introduce labour-saving
technologies.
The dichotomy of rural
under-employment combined with a labour shortage is not unique to Sri Lanka.
The peculiarities of paddy cultivation cause it to be a problem, even in richer
countries such as Thailand, where a lack of land reform has resulted in a
shortage of labour for its export-based manufacturing industry.
Policy framework
The newly-elected
Government’s National Policy Framework (NPF), the summary of which saw the
light of day on December 14, envisages the solution of the agrarian crisis
though a mixture of structural changes, welfare measures and technological
fixes. It hopes, to make the country self-sufficient in agricultural products.
It has mooted introducing a
‘New National Agricultural Policy’, after an in-depth review of the present
policies. One hopes that this will revisit the structure of the subsistence
paddy economy.
The measures stated in the
NPF suggest modernising agriculture, by introducing environment-friendly
farming, economising water use and promoting solar-powered pumps, introducing
high tech agriculture, and promoting the cultivation of other food crops.
Incidentally, the NPF
reveals one of the major shortcomings in Sri Lanka’s development thinking, by
suggesting the import of tax-free solar powered water pumps and solar cells.
Why import, when the agricultural sector should be providing a market for
locally-manufactured farm machinery? Sri Lanka has a developed
pump-manufacturing industry, which could be encouraged to produce solar-powered
pumps locally, and manufacturing solar cells is not rocket science any more.
This is especially relevant
because the NPF depends on garnering the “energies and capacities of
universities, research institutes and private sector” in developing the
agricultural sector.
Progressive
One of the more progressive
measures the NPF suggests is to expand agriculture production by providing good
seed and planting materials, introducing a ‘domestic seeds policy’ to produce
international-standard seeds, compulsory certification of imported seeds, and
establishing a seeds bank under the Ministry of Agriculture to ensure seed
safety. Although the document does not include a policy on genetically modified
organisms, no doubt the seeds policy will address this controversial topic.
One may also laud the plan
to promote and popularise organic agriculture, by converting traditional
farming villages to exclusive organic fertiliser use, developing two million
organically-fertilised home gardens, producing bio-fertiliser and organic
fertiliser of high standard –using the forests and wetlands – and initiating a
proper waste management system. The NPF advocates introducing an
internationally acceptable organic product certification system,by improving
the Sri Lanka Standards Institute to secure the certification.
One of the major problems
faced by consumers is the high level of produce wastage in harvesting, storing
and transportation. The NPF seeks to tackle this by combining public and
private sectors in a program of action and expanding the role of railways in
transporting produce, introducing new rolling stock and improving railway
infrastructure.
A major issue facing the
sector is the disinterest of the younger generation in cultivating paddy or
other crops. The NPF envisages incentivising them by promoting youth
agricultural entrepreneurship and providing tariff benefits and low-interest
loans for the budding agri-businesspersons.
Farmers’ problems
The truly progressive side
of the NPF’s agricultural policy comes out where it does take on the problems
faced by the farmers.
A key issue they face is
uncertainty, in the face of the vagaries of the climate (exacerbated by global
warming) and of cycles of shortage and glut. The NPF seeks to mitigate these
uncertainties by introducing a new, attractive insurance scheme as well as a
new crop insurance scheme.
The proposal to re-establish
the pension scheme for farmers would, of course, remove the uncertainty over
the income that farmers have in their retirement.
Given the small size of the
average paddy land holding, land productivity has crucial importance for paddy
farmers. The NPF deals with this issue as well, by introducing a methodology to
bring lands to productive uses as well as an integrated soil fertility
management system. It also envisages introducing an Agriculture Crop Management
System, which would optimise output.
It also proposes a revolution
in the use of Fertiliser, by replacing the existing fertiliser subsidy scheme
with an alternative system, providing both inorganic and organic fertiliser
free of charge to farmers. Costs will presumably be reduced through its
proposal to initiate a programme to produce all essential fertilisers
domestically.
The real bite of the NFP, as
far as agriculture is concerned, is nestled unobtrusively in various locations
throughout the text.Breaking the mould
The crucial issue
confronting Sri Lanka’s agrarian sector, both paddy and other crops, lies in
the structure of subsistence farming. Farmers are enmeshed in debt, often to
buyers of their produce, and are subject to the stranglehold of middlemen.
The NPF seeks to deal with
the problem of usury, by introducing a simple, low-interest agricultural credit
scheme for farmers. This would have the advantage for the government of
bringing part of the black economy into the white, by eliminating agrarian
‘gini poli’ (usurious interest, getting its name from the defunct British
‘guinea’ currency – interest being a shilling on a pound, or a guinea return
for a pound loan, 5%).
The proposal to promote a
pre-contracts system along value chains would also benefit farmers. Prices
would be stabilised by a combination of controlling import of agricultural
products, setting up different guaranteed prices for a kilogram of different
varieties of paddy, and expanding the role of the Paddy Marketing Board to
purchase paddy without delay.
It also intends promoting
co-operative farms at regional level. The country gained considerable
experience in farming co-operatives during the 1970s, with a unique system of
farmers holding their land, but pooling all their other resources. In
developing the new agrarian policy, the government should take note of such
experiences.
The agrarian policy should
also take note of the experiences of other countries, which have broken out of
the rural underdevelopment mould and transformed into modern agricultural
economies.
It should observe,
particularly countries such as Japan, South Korea and Taiwan (Chinese Taipei)
advanced their agriculture through land reform (the maximum holding being 1-4
ha, compared to 10 ha in Sri Lanka), mechanisation and outsourcing of
industrial manufacture to farmers (enabling them to use their leisure hours for
income generation).
One of the major problems
faced by consumers is the high level of produce wastage in harvesting, storing
and transportation. The NPF seeks to tackle this by combining public and
private sectors in a program of action and expanding the role of railways in
transporting produce, introducing new rolling stock and improving railway
infrastructure.