Views of farmers and grass root level government officers on the present fertilizer subsidy programme in Sri Lanka

Transcription

1 Views of farmers and grass root level government officers on the present fertilizer subsidy programme in Sri Lanka L.H.P.Gunaratne and Ryan Rienzie Agribusiness Centre Faculty of Agriculture University of Peradeniya

2 Background Input subsidies: Various input subsidies have been tried in Sri Lanka but failed to live up to expectations and phased out. Fertilizer subsidy: First started to promote green revolution. Then terminated, revised and introduced number of times, 1963, 1988, 1990, 1994, 1997 and Kethata Aruna fertilizer subsidy scheme (2005): A 50 kg bag of fertilizer was initially given at LKR 350 for paddy. Later on, this has expanded to other annual and plantation crops but with slightly higher price.

3 Issues Public budget allocation: On average consumes 2% annual government expenditure. During , the government expenditure on this has amounted to LKR billion. Logistical inefficiencies: Lack of resources at Agrarian Service Centres such as storage and transport problems cause long delays in supply Negative externalities: Over use of fertilizer has caused a number of environmental problems Economic inefficiencies: Rent seeking through corrupt practices, leading to leakages.

4 The need Rationalize the government expenditure Improve the efficiency to optimize the expected social and economic benefits Building input markets must go with the building of the output markets

5 Restructured Programme New scheme: An cash allowance of LKR 25,000 for two seasons for paddy who cultivate below one hectare. Or LKR 5,000/season/acre. Estimated government expenditure LKR 37.5 billion/year

6 Grass root level parties contacted Department of Agriculture (DoA): The DoA responsible for technical aspects of agriculture including fertilizer recommendations Agricultural Instructors Department of Agrarian Development (DAD): The DAD involves in distribution of subsidized fetilizers Agricultural Research and Production Assistants Farmer Organizations President/Secretary Non-government organizations Development workers

7 Views of the field officers of the Department of Agriculture Strengths of the old scheme Availability of recommended amount fertilizer for crop cultivation Increased use of fertilizer due to low cost Availability of fertilizer for OFC at lower price Productivity improvements Bringing more lands in to paddy cultivation

8 Views of the field officers of the Department of Agriculture Weaknesses Over application of fertilizer due to subsidized price. Also, application was done without testing of soil. Solely depend on inorganic fertilizer Degradation of soil and its properties (chemical, biological, physical)

9 Views of the grass-root level officers of he Department of Agrarian Development Strengths of the old scheme Provision of fertilizer to farmers doorstep Increase organization of farmers and participation of farmer organizations Commissions revenues to the farmer organizations Free crop insurance for farmers Time spending for buying fertilizer is less Recommended amount is applied Transportation done by farmers hence it enhance the funds for farmer organizations Surplus of fertilizer can be easily applied for the other field crop cultivations Whole quantity supplied at once hence low transportation cost for fertilizer

10 Views of the grass-root level officers of he Department of Agrarian Development Weaknesses Did not able to provide on time, in some situations Labeled quantity was not actually available Lower level of applying organic fertilizer Subsidy may obtain by people who are not involved in farming but with own farming lands Misuse of fertilizer such as Illegal selling of fertilizer

11 Views of the representatives of Farmer Organizations Strengths Strengthen farmer organizations More dynamic rural set up (to transport and distribute fertilizer) Relief to the high cost of cultivation burden Better links with the DAD officers

12 Views of the representatives of Farmer Organizations Weaknesses Moving people towards chemical agriculture from the traditional low input agriculture Not on time provision, i.e., late supply Transport difficulties in remote areas Low quality, in some situations

13 Views of NGO representatives Strengths Low price and reasonably availability Support to poor rural people Boost the agricultural production Surplus of fertilizer can be easily applied for the other filed crop cultivations

14 Views of NGOs Weaknesses Low quality fertilizer supply Eg., Inclusion of heavy metals Moving away from livestock or integrated farming Increase the use of other external inputs such as pesticides

15 Evaluation of revised scheme Views of the officers of the Department of Agriculture The revised scheme has some inclination to move farmers towards to use of organic manure. However, the technologies developed by the department require chemical fertilizer and other inputs. Alternative fertilizer productions are not available There is a high probability of less use of fertilizer so that might affect to the national production. Although the low-input sustainable production systems are ecological friendly, there are trade-offs

16 Evaluation of revised scheme Views of the officers of the Agrarian Development Department Money provide not only for cultivating farmers but also for non cultivating farmers Financial support is sufficient for rain-fed but not for irrigated agriculture Misuse of money Farmers are more interested in application of Urea but not other kind of fertilizers. Organic fertilizer: High quantity requirement; high transportation cost Therefore, it is better to continue old method while addressing its weaknesses. A coupon method can be incorporated with definite amount of organic fertilizer.

17 Evaluation of revised scheme Farmer Organizations New method of subsidy will not be able to overcome the weaknesses Amount of money provided is not sufficient for purchasing of total fertilizer requirement. Delays incurred when transferring money to the farmers through their bank accounts may adversely affect to on time application In rural areas, only a few shops are selling fertilizer, so farmers have to spend more time for searching fertilizer Quality of fertilizer is not ensured. Negatively affect to the coherence among farmers and farmer organizations

18 Evaluation of revised scheme NGO representatives New scheme is incapable of handling the inefficiencies of the previous scheme. However, some of the intended environmental benefits could be achived, if monitored well Should make available information about the alternative source of fertilizer. Provision of money is not enough and along with it, fertilizer recommendation should be provided to the farmers. Name of subsidy should be replaced by incentives for cultivation

19 Concluding remarks Overall, the previous scheme receives a strong support from all the groups, except from NGOs. They believe that by correcting the weaknesses, the old scheme brings more benefits. Also they think that with new scheme, the overall fertilizer use and the agricultural production will decline. Public budgetary burden or fiscal consolidation is not a concern at grass root level; Even the environmental pollution is not convinced well.

20 Thank you