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Sri Lanka foregoes US$1.04 billion in man –made crop disaster

Sri Lanka’s unplanned shift to organic farming from chemical based agriculture practices has triggered a man-made crop disaster and incurred a massive loss of around US$1.04 billion, official provisional estimates and data of trading economic indicator models showed.

The total cost (fertiliser and rice imports) from the government’s attempts to transform the country’s chemical fertiliser farming to organic farming was $1.84 billion whereas all this cost could have been saved if the authorities had allowed the import of chemical fertiliser, spending only $400 million, according to a Finance Ministry source.

Sri Lanka is grappling with a severe food crisis. Food prices have skyrocketed and people are suffering from food inflation leading to potential economic crisis, an economic expert said.

The Finance Ministry and the Central Bank have to provide foreign exchange to import rice and essential food commodities when the country is struggling to find dollars, official sources said.

The total cost for rice imports will be $180 million and if the government had to import vegetables and fruits to meet any shortage, then the total food commodity import bill will be in the region of over $650 million, the ministry official said.

It has been planned to spend Rs. 3.8 billion to purchase organic fertiliser from local producers during the current Maha cultivation season.

The cost to import nano nitrogen liquid fertiliser from India is $44.2 million while another sum of $63.7 million has been paid to import 30,000 tons of potassium chloride fertiliser up to now.

Sri Lanka’s unplanned shift to organic farming from chemical based agriculture practices has triggered man made crop disaster incurring massive economic loss of millions of dollars.

The total economic loss up to now was around US$ 1.04 billion ($1044.8 million), official provisional estimates and data of trading economic indicator models showed.

Sri Lanka’s decision to shift to organic farming has been taken under economic pressure due to dwindling foreign exchange reserves, depreciating currency and loss in revenue, several economic experts said.

But the back firing of this decision of trying to force organic farming overnight without following a phasing out programme for natural farming along with inorganic farming has now compelled the government to find dollars for food imports.

  • The Finance Ministry and the Central Bank are in compulsion to provide the required foreign exchange to import rice and essential food commodities at a time the country is struggling to save dollars, official sources divulged.

The trade ministry is now taking measures to import 300000 metric tons of rice with a cabinet approval granted in its first meeting this year held on Monday 10 spending around US$ 134 million amidst a severe dollar crisis at present.

It will also import 100,000 Metric Tons of rice from Myanmar in order to maintain a buffer stock via State Trading Corporation at a cost of $46 million.

Sri Lanka is on the verge of facing unfavorable impacts on food security, agriculture industry revenue, foreign exchange earnings and rural poverty pushing the country into a grave crisis, official statistics and mathematical modeling data revealed.  

This was the direct result of shifting the current local agricultural practices to organic farming without considering the technological, environmental, and economic costs and benefits, 

On top of it the government has allocated Rs. 40 billion to compensate farmers for the losses incurred during this Maha season due to the government’s policy of banning the use of chemical fertilisers.

The government has paid $ 6.9 Million to Qingdao Seawin Biotech Group Co., Ltd of China as per the Letter of Credit opened for the purchase of organic fertiliser after rejecting the shipment of 99,000 metric tons of organic fertiliser at a cost of $ 63 million.

 In addition the country’s transformation to organic farming  from the present practice has cost the country more than US$ 800 million from the import of chemical fertiliser after the partial lifting of the ban, spare parts to manufacture machinery to produce organic fertiliser locally and owing to the loss of export crop production.

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