Sri Lanka’s government was recently toppled amid the worst economic crisis since the island nation gained independence in 1948. The country’s ruling Rajapaksa family is blamed for severely mismanaging the economy, resulting in a default on Sri Lanka’s sovereign debt, the collapse of its currency, and a humanitarian crisis due to a severe shortage of essentials. While the list of missteps made by the Rajapaksa government is long, the country’s ill-conceived agricultural policy is one that particularly stands out amid the world’s burgeoning food crisis.
Gotabaya Rajapaksa became President of Sri Lanka in 2019, campaigning on a platform that included a promise to convert the country’s entire agricultural sector to organic. Sticking to that pledge, and against the advice of agricultural experts and industry, Rajapaksa banned the import of chemical fertilizers and pesticides in April of 2021 and ordered the country’s farmers to go organic. The new policy was imposed virtually overnight and came with no prior warning to farmers, nor any education or instruction on how to implement organic practices.
At the time, less than 3% of Sri Lanka’s agricultural land was farmed without chemicals. The government also subsidized anywhere from 48%-to-88% of fertilizer costs. The Sri Lankan economy is dependent on agricultural exports such as tea, rubber, coconut, and spices, while rice is the staple food crop. Tea is the biggest export, and 89% of tea and rubber plantations relied on chemical fertilizers. Nonetheless, about a third of Sri Lanka’s agricultural land is estimated to have been left dormant last year because of the import ban.
The end result was a -14% decline in rice production, turning Sri Lanka into a net rice importer for the first time in over a decade. The combined annual output of the two paddy crops was 2.92 million metric tons (MMT) compared to 3.39 MMT the previous year. The more significant “Maha” (winter crop), which accounts for 60% of total production, saw a staggering -45% drop in production. The “Yala” (summer crop) was less impacted, likely because by the time the bans were enacted, most chemical inputs had already been imported.
Overall, grain output declined by nearly -43%, including a -70% drop in corn output, while vegetable production was down by -30%. Due to shortages in domestic corn production, for the first time Sri Lanka last year authorized imports of wheat for animal feed. The chemical ban also severely impacted tea production, a crop that supports over 3 million of the country’s most impoverished citizens and accounts for about 10% of the country’s export income. Tea production fell -18% year-over-year, while tea exports so far this year have plunged to the lowest since 1999. Tea brokering firm Asia Siyaka blamed the drop on the agrochemical ban and the fact that there simply is not enough organic fertilizer in the country to replace synthetics.
While the chemical ban was lifted by October following backlash from the industry and mass farmer protests, farmers were still left unable to access fertilizer and other chemicals. When the government implemented the ban last year, most of the companies dealing in ag chemical imports sold down their stocks. Now, importers say they’ve been unable to replenish supplies because of a lack of foreign exchange currency.
The problems have only been exacerbated by the domestic economic crisis with inflation now soaring above +20%, and the war in Ukraine, which has sent the price of fuel, pesticides, and fertilizer soaring. Seeds have also become unaffordable for many. The skyrocketing costs have led many farmers to abandon planting crops at all this season, or scale back what they had initially planned and/or hoard part of their production for their families. Still others can’t find – or can’t afford – the fuel to power equipment. Most Sri Lankan insiders fear it will all add up to another year of severe crop production shortfalls and a full-blown food crisis.
While Sri Lanka’s organic policy may not be to blame for its economic failure, it’s hard to argue that the experiment was conducted responsibly. By banning costly foreign exchange draining fertilizer and agrochemical imports, the Sri Lankan government also aimed to generate significant import cost savings, so there is more to the story than simply a naive misunderstanding of organic farming’s limitations. Still, as governments around the world consider their own organic policies, Sri Lanka should serve as a cautionary tale on how complicated and costly such a transition might be. (Sources: USDA, Foreign Policy, The Guardian, National Geographic, The Economist)
