PM’s subsidy offer makes no sense, experts say

Government moves to provide chemical fertiliser at subsidised rates doesn’t mean everything is rosy and results in a bumper harvest; on the contrary Sri Lanka still does not have money to buy it and even if it does time is running out as the next cultivation season ends in August.

“Saying sorry” is not going to solve the problems and without the necessary nutrients at affordable prices at the right time, things cannot be turned around now, Peradeniya University Crop Science Senior Prof. Buddhi Marambe told the Business Times.

He was reacting to Prime Minister Mahinda Rajapaksa’s address to the nation that highlighted a return to the chemical fertiliser subsidy and where it was agreed that this was not the right time to adopt organic farming practices.

“We know damages can be done in a flash but recovery is a longer period,” Prof. Marambe explained.

In this respect, recovery is hard to come by without a good plan in place for the next two to three seasons for a productivity enhancement package.

With global fertiliser prices skyrocketing this is the time the government needs to provide its farmers with subsidised fertiliser.

“We need the subsidy more than ever if we are to take the initial steps of agriculture forward,” he asserted.

Farmers were provided fertiliser at 90 per cent subsidy since 2005 and in 2020 it was given free. Then from 2021 the government introduced its plan to impose a complete ban on chemical fertiliser and provide organic fertiliser at no cost.

Moreover, farmers also require 2.5 million bushels of seed paddy annually out of which one third is needed for the next Yala season and two thirds for the Maha season.

And now due to the existing fuel crisis some farmers are finding it difficult to harvest from the last season as they are unable to use their machinery, it was pointed out.

Meanwhile, the Treasury has been obtaining information from fertiliser importers on the amount of stocks available in the local market and whether they can import it and possible prices at which they could be sold.

Importers told the Business Times they were uncertain whether the government really can understand the situation.

Even if LCs are opened now in April the cargo will be delivered only by June by which time it will be too late to provide the necessary fertiliser for the plants.

The Yala season requires about 200-250, 000 MT of fertiliser and one of the inputs required being Potassium is hard to obtain. Importers have not sent quotes to purchase Potassium inspite of a government tender being opened in this regard. Potassium is obtained mainly from Belarus but due to sanctions being imposed on exports it is not possible to purchase this fertiliser.

In addition the government still owes fertiliser importers Rs. 23 billion in subsidy payments for purchases made a year back.

In addition, it was pointed out that the 25 per cent interest rate has also caused a further strain on the industry.

As one importer stated, “to balance the farmer protests they are trying to verbally balance (it) but they don’t’ have the resources to do it.”