Government to import 42,000 MT of fertiliser

Thursday, 9 June 2016 00:10 - - {{hitsCtrl.values.hits}}

By Uditha Jayasinghe

Bowing to public pressure, Cabinet yesterday gave the green light for the Government to import 42,000 metric tons of fertiliser to be distributed to farmers under a “fair price”.

The decision was made under a proposal made by Agriculture Minister Duminda Dissanayake to purchase 42,000 MT of fertiliser to be provided to farmers at a fair price as per the recommendations made by the Cabinet Appointed Special Standing Procurement Committee.

“We have taken the views of all stakeholders under consideration as this is an issue that is very close to the heart of President Maithripala Sirisena and arrived at this decision,” Government Spokesman Media Minister Gayantha Karunatilleke told reporters at the weekly Cabinet briefing.

Under the 2016 Budget, the Government decided to convert the subsidy to a cash allowance of Rs. 25,000 a year to encourage farmers to move away from using chemical fertilisers and to ensure that they are given good quality fertiliser, instead of the cheaper kind that is often given under the subsidy.

Paddy cultivation is a major source of livelihood in Sri Lanka, providing more than 1.8 million people with employment opportunities.

However farmer associations had informed the Government that farmers face difficulties in purchasing fertiliser stocks. Farmers in Bandarawela, Welimada, Keppetipola and the Hambantota District were the worst hit by the fertiliser shortage, according to previous reports. In response President Maithripala Sirisena intervened and established a maximum fertiliser price of Rs. 2,500 per bag in February this year. But many farmers continued to complain that the directive was not universally implemented.

In March the Government also decided to extend the existing fertiliser subsidy to tea, rubber and vegetable farmers and allocated Rs. 2 billion to provide fertiliser to tea and rubber smallholders as well. An additional Rs. 4 billion will be provided by the Treasury for vegetable farmers, the Government has promised.

This will be in addition to the previous Government allocation of Rs. 37 billion as fertiliser subsidy for paddy farmers this year.

As in many developing countries, fertiliser subsidies represent a major component of agricultural policy in Sri Lanka. Since 2005, the fertiliser subsidy has accounted for 2-2.5% of total Government expenditure and the subsidy is given for all three major fertilisers (Urea, Murate of Potash – MoP, and Triple Super Phosphate – TSP), according to research done by the Institute of Policy Studies.

Over the years, the subsidy has significantly contributed to increasing paddy production, stabilising the milled rice price], and helped the country attain self-sufficiency in rice. However, there are questions on the effectiveness and sustainability of the programme because of concerns around the overuse of subsidised fertiliser and its use for crops other than paddy. The excessive use of fertiliser has also raised concerns over soil and water pollution, food safety and the burden on the National Budget.