A number of factors indicate the state of the economy of a country. Among these are growth rate, trade deficit (TD), exchange rate (Rs/US $) and debts. The growth rate of Sri Lanka has declined after 2015. It dwindled to 4.5% in 2016 and 3.1% in 2017 and in 2020 it was -3.6 %. The Trade Deficit (the difference between exports and imports- TD) shows a decrease, but at present it stands at – 6.1 US$ billion. Exchange rate continued to increase from Rs. 111 to a US $ in 2010 to Rs. 186 in 2020. Currently it is around Rs. 200. At the end of 2020, the total outstanding external debt was US $ 49.2 billion. These figures indicate that Sri Lanka is heading towards an unprecedented economic crisis.

Research studies conducted in Sri Lanka and elsewhere indicate that application of inorganic fertilisers tends to increase growth and yields of crops. The recent decision taken by the government to ban the import of fertilisers and pesticides, is likely to retard crop production in the country and a drop in the yields of all crops. Currently the average paddy production in Sri Lanka is about 4 t/ha, and this is likely to be reduced if inorganic fertilisers, such as urea, are not applied at correct times. Already paddy farmers in some areas are complaining that basal fertilisers were not available for their Yala crop. If this situation continues to prevail, local crop production including rice will decrease, causing food imports such as rice, pulses, etc., to increase.

Even at present, annually we spend nearly US $ 2 million on food imports. Increase in expenditure on food imports will exacerbate the present economic and social problems in the country. Reduction in local food production will affect the food security situation of the country and a rise in food prices which we are experiencing at present. Decrease in productivity will make the farmers poorer, which will tend to reduce their buying capacity, affecting local industries and thereby increasing unemployment. There are around one million farmers and when their incomes go down it will seriously affect their standard of living, their heath, and the education of their children.

The Soil Science Society of Sri Lanka, (SSSSL) the membership of which includes soil scientists representing the university academia, the Department of Agriculture, the Department of Export Agriculture, etc., in a letter sent to President Gotabaya Rajapaksa, , has expressed its concerns over the proposed move to shift towards organic fertilisers. According to the SSSSL, banning import of inorganic fertilisers will have disastrous effects on the crop sector.

Sri Lanka Agricultural Economics Association (SAEA) is the professional body representing the agricultural economists of Sri Lanka. The SAEA too predicts massive economic losses due to potential yield losses, in the absence of proper substitutes for chemical fertilizers and pesticides. The immediate adverse impacts on food security, farm incomes, foreign exchange earnings and rural poverty can be detrimental.

Our annual export earnings from tea is around US $ 1 billion, and non-availability of inorganic fertilisers will also reduce tea production, which will cause a decline in export income resulting in a rise in the Trade Deficit, which at present is around -6.1 million US $. The non-availability of fertilisers, such as urea, will affect tea production and the incomes of the plantation workers as well. According to the Chairman of Tea Traders Association, the Sri Lanka tea industry will stand to lose its key markets.

Around 70% of Sri Lanka’s total tea production comes from tea small holders, and this sector comprises approximately 500,000 tea land owners covering 138,900 hectares. According to the Chairman of the Sri Lanka Federation of the Tea Small Holders, because of the fertiliser shortage, tea production will drop by 30% by the end of 2021 and 50% by March 2022. . This will lead to a reduction in the incomes of the tea small holders, which will affect nearly 1. 5 million individuals who depend on the tea industry. Reduction of their income will affect the living standards and health of their families, and the education of their children.

Thus, banning fertilisers will have disastrous effects on the country’s economy. Those in the government appear to have not realised the gravity of banning imports of fertilisers and pesticides. It is essential that the relevant authorities seriously consider all the repercussions of banning import of inorganic fertilsers and other agrochemicals, and take appropriate action. If not, the country is going to be doomed.

Source from: C.S. WEERARATNA(2021). Fertiliser ban and economic crisis. Retrieve from: The Island Online(July 15, 2021). https://island.lk/fertiliser-ban-and-economic-crisis/