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Wednesday, 19 February 2020 02:03 - - {{hitsCtrl.values.hits}}
By Chandani Kirinde
The Government spends millions of rupees annually to import harmful fertiliser into the country, which studies have linked to kidney disease reaching epidemic levels in the country, despite having the possibility of manufacturing far less harmful varieties using the Eppawala phosphate deposits, Auditor General W.P.C. Wickramaratne disclosed in a report released recently. In 2018, fertiliser imports cost the State over Rs. 2.3 billion.
“The import of fertiliser with over 5 mg of cadmium per one kilogram of phosphate to the country has been prohibited. Nevertheless, countries such as China, Belarus, Jordan, Uzbekistan and Malaysia that are endowed with phosphate deposits with very high percentages of cadmium and arsenic, as research reports have pointed out, are the major countries from which Triple Super Phosphate (TSP) is imported to Sri Lanka as per the information made available by the National Fertiliser Secretariat,” the Special Audit Report on Evaluation of Optimum Utilisation of the Eppawala Phosphate Deposit for the Development of Sri Lanka found.
The AG recommended that immediate steps been taken to implement the decision taken by the Fertiliser Advisory Committee of the Ministry of Agriculture in July 2019 to encourage farmers to use Single Super Phosphate (SSP) manufactured using Eppawala rock phosphate which can be substituted for TSP as this decision had not been complied with even by November 2019.
“It has been identified that the use of these imported fertilisers had resulted in outbreak of several diseases, whereas action had not been taken to manufacture fertiliser using phosphate with the least amount of cadmium and arsenic and to limit fertiliser importation,” the AG said.
The AG’s report said that the Government spent $ 1,276,500 (around Rs. 2.3 billion) in 2018 to import 3,508.5 metric tons of Single Super Phosphate (SSP) despite the possibility of manufacturing the SSP using Eppawala rock phosphate.
This is while the State-owned company Lanka Phosphate Ltd. (LPL), the main objective of which is to manufacture and export fertiliser, nearly 27 years since its inception, failed to manufacture phosphate based fertiliser for short term crops or diversify the other products other than selling phosphate to several companies as a raw material and manufacturing fertiliser for coconut. According to the Cabinet Memorandum submitted in March 2018 by the then Minister of Agriculture, the national requirement of TSP, the main fertiliser containing phosphate, has been 96,000 metric tons for 2018 while the expenditure incurred for the import of TSP has increased gradually going from 0.025% in 2014 to 0.129% in 2018.
The Department of Geological Survey found two rock phosphate deposits at Eppawala and Kavisigamuwa areas in 1971 with the largest deposit with an economic value located in Eppawala area of the Thalawa Divisional Secretariat in the Anuradhapura District. This phosphate deposit covers an area of around 6 km with its North deposit containing around 40 million metric tons of phosphate and its South deposit around 20 million metric tons. Only about 1.4 million metric tons out of the entire phosphate deposit has been utilised by LPL and Government institutions from 1976 to 2019.
The specialty in the Eppawala Phosphate Deposit is that it has been found that cadmium and arsenic contained generally in phosphate are present in insignificant levels in this deposit with the International Fertiliser Development Corporation putting its composition of cadmium at 0.0005%. A project report on the manufacture of SSP submitted to the Ministry of Agriculture by LPL also confirmed that the cadmium and arsenic levels in the phosphate deposit at Eppawela are at very minute levels, whereas the chemicals content in imported chemical fertilisers was very high. The Eppawela deposit considered are among the 10 best deposits in the world, the Report said.
The report said studies have shown phosphate as a raw material can be used for the manufacture of fertiliser for long-term and short-term crops, production of animal feed, production of water softeners, production of various chemicals, artificial bone production, manufacture of ceramics, medicines and paints. The LPL at present provides raw material to 12 private companies for the manufacture of fertiliser required for perennial crops such as tea, rubber, different kinds of spices as well as coconut with 276,431 metric tons sold to these companies during the five-year period between 2013 to 2018. LPL earned around Rs. 2,483 million from the sale of phosphate during this period.
According to Central Bank Reports for the years 2014 to 2018, Sri Lanka had cultivated paddy in an average of approximately 1,033,000 hectares per year and 35,991 metric tons of imported TSP fertiliser had been used by farmers according to data from the National Fertiliser Secretariat shows. A project report had been submitted in 2006 by LPL on the manufacture of SSP to the Ministry of Agriculture detailing the many benefits of such a project and Cabinet approval had been given in September 2006 to implement the project. It was estimated that the average expenditure of Rs. 900 million incurred annually at that time on the import of fertiliser would be saved; and the total funds required for commencing the industry would be Rs. 681 million with 50% of this amount provided by local banks and the remaining 50% would be borne by LPL.
The preliminary project proposal for manufacturing of SSP fertiliser using local phosphate rock was prepared in 2006 by LPL and presented to the Ministry of Industrial Development. The Ministry had put the capital investment for the fertiliser manufacturing plant with the capacity to manufacture 60,000 metric tons of SSP annually, as well as a facility to produce sulphuric acid at Rs. 1,222 million with a payback period would be six-and-a-half years. However, this project had been abandoned and instead in 2017, another project proposal for manufacturing SSP had been presented with an estimated cost of Rs. 9 billion be invested to manufacture 100,000 metric tons of SSP.
The Report referred to the importance of establishing a plant to produce sulphuric acid which is required to manufacture SSP using rock phosphate found in Eppawala saying producing it locally is profitable and would save foreign exchange. Customs Department data shows that a sum of over Rs. 100 million is spent annually on sulphuric acid imports needed for manufacture of products such as batteries, detergent, fertiliser, lubricating oils, oil additives and agricultural chemicals. The Audit Report said that of the total cost incurred by LPL for the five preceding years, about 46.2% had been on its employees with its annual cost per employee standing at Rs. 718,089 but LPL’s contribution to the economy was insufficient in relation to the said cost. A decline of 76% was also observed in the profit of the company for the year 2018/19 as against the year 2014/15.
It added that the Coconut Fertiliser Mixing Plant established by LPL in Wariyapola in 2014 has been running at a loss from 2015 onwards and necessary steps be taken to make the plant a profitable institute and to increase the profits of LPL.
The Auditor General also recommended that a formal inquiry be held to ascertain the reason behind the non-implementation of the project to set up the SSP manufacturing plant as well as the sulphuric acid plant for which Cabinet approval was given in 2006.
