Rs. 4.5 b fertiliser subsidy move for Cabinet approval

Wednesday, 29 December 2010 00:34 - - {{hitsCtrl.values.hits}}

By Uditha Jayasinghe

The increase in coconut prices has prompted the Government to reintroduce the fertiliser subsidy from next year, costing Rs. 4.5 billion annually in an effort to prevent shortages in the future.

Coconut Cultivation Board Chairman Sarath Keerthiratne told the Daily FT that the decision would first have to gain Cabinet approval and steps were being taken to present the proposal at the next meeting.

If it is approved, the subsidy could be available as early as next month.

The Government hopes that this will encourage smallholders – who form around 80% of the growers – to fertilise their estates more frequently, thereby doubling the output.

“Most smallholders don’t fertilise their trees regularly as it cuts into their short-term profits. But we are trying to provide each bag of fertiliser at Rs. 1,000, which is a Rs. 2,000 discount,” he said, adding that even if Rs. 150 extra is spent on each tree at current prices, production would increase.

The actual number of fertiliser bags and how they will be distributed to the smallholders is still being discussed with the Treasury, according to the Chairman.

The Cabinet paper has to be presented through the relevant subject ministry of Minister Jagath Pushpakumara.

The Coconut Cultivation Board has 17 regional offices and a network of distribution could be streamlined through agrarian services offices as well.

Last week Economic Development Minister Basil Rajapaksa held discussions with coconut growers, where the association pointed out that a coconut palm required at least three kg of fertiliser a year to double its produce within a year.