Once cultivated, traditional paddy that is grown organically will establish its own markets based on the consumer demand
For the longest time the word “sustainable agriculture” was a catch phrase only. It was discussed in national agenda and strategies, political forums and even among United Nations development goals.
Despite numerous discussions business went as usual and farmers kept on applying chemicals to agricultural produce and consumers ate them without questioning. However I admit to the fact that there were small-scale interventions in terms of promoting sustainable agriculture.
Motivated farmers drove most of these small-scale operations. They had little or no support from the private sector or the government agricultural institutes. There are several well-known individuals and organisations that implement organic framing to their available capacity.
In my view these operations were isolated efforts and had little impact in terms of promoting organic agriculture at a national level. Therefore, the popular model did not change. The fertiliser sellers had the bigger say where farmers sometimes got advice from them despite there being agricultural graduates who worked as “Agricultural Instructors”.
Farmers who practiced agriculture with organic fertiliser had many issues. Finding the required organic fertiliser was always an issue since heavy amount of organic fertiliser was needed for an acre. Most farmers could not meet the opportunity cost involved in making organic fertiliser. They failed to make fertiliser available at right amounts at the right time.
Organic agriculture practices most of the time require carefully managed interventions especially related to water management. This increases the overall management costs. Furthermore, organic agriculture is generally associated with traditional paddy varieties and they are hard to find in large quantities and are expensive. Despite all these problems I argue that the biggest issue was that they did not have a “voice”. There wasn’t a national program and an agenda backing them up.
The National Program on Toxin Free Food was the main program that was implemented recently which had the full blessings of the Government. Regardless of who conceptualised the program in terms of getting it the necessary political backup, the program itself is something that was essential to the country and to the future of the organic agriculture efforts. The initial aim of the program is on paddy and if things are successful there is the possibility of rolling it out for other crops as well.
In addition, the Government has given special emphasis on the development of the Trincomalee District as a “sustainable green district”. The Trincomalee sustainable green district program goes beyond organic agriculture. It focuses on rehabilitating the traditional inland tank system that facilitate irrigation agriculture, inland fisheries and rainwater harvest and also sustainable energy and sustainable road systems.
It’s only been two months for the program yet it is making a considerable success and has already rehabilitated more than 10 inland tanks. Under this there are more than 30,000 farmers who are practicing organic agriculture under rain-fed and irrigation systems. Arguably these are the two main State-sponsored interventions that promote sustainable agriculture. However the important aspect is the coordination between the two programs and resource sharing. Both these programs are focusing on bringing back the traditional knowledge and practices of agriculture therefore it related the topic of the articles.
The overall objective of the article is to see the relevance of these programs in making the agriculture sector sustainable again for the country. It is interesting to evaluate how these national interventions are addressing the most serious issues faced by sustainable/organic agriculture (I am referring to organic agriculture as the major sustainable agriculture intervention but I acknowledge other views as well).
The popular perception is that organic fertiliser is something easy to make. Many decades back the basic materials for organic fertiliser such as leaves, cow dung, paddy husk and sawdust were available abundantly at most agricultural households. However times have changed and these ingredients are hard to find and expensive. Therefore a significant cost is associated with finding ingredients for the preparation for organic fertiliser.
Most farmers (almost all small-scale paddy farmers) try to manufacture organic fertiliser by themselves. Hence they do not see the cost involved in own labour. The interesting question that should have been asked is, ‘If you were to pay for someone to make organic fertiliser at your house, how much would that be?’ Farmers who manufacture organic fertiliser by themselves fail to account this opportunity cost.
Therefore farmers’ cost of preparing organic fertiliser will increase as they look for materials and make the fertiliser themselves. Furthermore the amount of fertiliser needed is high. On average farmers put 200Kg of chemical fertiliser per acre. Studies have shown that on average a farmer has to put one ton of organic fertiliser for an acre. Now the challenge is to come up with an organic fertiliser that is affordable and requires less per acre.
The National Program on Toxin Free Food seems to have found a successful solution. Through rigorous experimental research work the program has been able to come up with a fertiliser mixture that can be commercialised at an affordable price and uses on average less than that of chemical fertiliser requirements per acre.
However the challenge is now to see the adaptability of this by the farmers. I have written previously that the price elasticity of chemical fertiliser is relatively inelastic. This shows that a suitable substitute is not in place for chemical fertiliser. It basically highlights the opportunity cost of making organic fertiliser available.
Now that we have found a suitable fertiliser, the challenge is to make it available. Making this affordable solves a part of the problem but still it has to be accessible. For that the supply chain has to be developed. The important questions to ask are:
(1) Who will manufacture this fertiliser?
(2) How will it be distributed among the organic farmers?
(3) Who will sell this to the organic farmer?
Whether the fertiliser should be manufactured by a private organisation or the Government is also an important question to answer. Giving or selling this to a private organisation may result in an organic fertiliser monopoly market. On the other hand manufacturing this by a Government organisation would result in control over the price yet there could be inefficiencies as we see in most State-owned institutes. Therefore one should seriously consider whether a public-private partnership would be an optimal solution. Ideally this fertiliser should be available at village level so that every farmer has easy access.
Costs associated with seeds and cultivation practices
As mentioned before, the popular thought is that organic fertiliser is something closely associated with traditional paddy varieties. This proposition has many downsides. Traditional paddy varieties are fast disappearing. Sri Lanka was home to more than 2,000 traditional paddy varieties, however only a handful exists. Many farmers go to great extents in finding the necessary amounts of seed paddy. Some farmers have to first build the seed paddy stock before cultivations. Therefore it is fair to say that traditional paddy varieties are a scare resource.
In addition traditional paddy varieties yield less compared to new improved paddy varieties (however I have seen experts who differ on this). Therefore when considering sustainable organic agriculture, traditional paddy varieties might create only a little motivation among farmers.
One attractive proposition is to promote organic farming with new, improved paddy varieties. There is a perception that organic fertiliser does not work very well with new, improved varieties since they are made to respond to chemical fertiliser. Field research under the National Program on Toxin Free Food has shown that new improved varieties are giving significantly higher yields under organic fertiliser. Hence it solves the main problem of cost and availability of seed paddy and low yields. However this still does not address one of the major issues with respect to using new improved varieties for organic farming.
The traditional varieties are known to have many medicinal properties and much research work proves this. These medicinal qualities, especially qualities such as low glycaemic index, cannot be expected from new improved varieties. Furthermore, such qualities allow the farmers to attract higher prices. Such benefits will be foregone if only new improved varieties are adopted. Therefore what is ideal is to have a mix of traditional as well as new improved varieties.
Once cultivated, traditional paddy that is grown organically will establish its own markets based on the consumer demand. This is fine since it is only a subset of consumers who demand traditional rice and a higher market share can be attracted if other rice varieties are also integrated into the cultivation mix. The price of the new, improved rice grown organically will have a lower price compared to traditional rice grown organically.
Water management is a vital component of paddy farming. Cost of water management could have a significant impact on fertiliser use. Water management cost could compete against the cost for fertiliser and farmers might end up using less than required when water management cost goes high (this is a hypothesis that is yet to be proven through research work).
There are field level activities prescribed by farmers to minimise the cost associated with water management. They are mainly focused on water conservation. However, for a national program these small-scale interventions might not be enough. The Trincomalee sustainable green district program has a better solution for that. Under this program a large collection of inland tanks will be rehabilitated, giving birth to the traditional “cascade tank system”. These systems come from the era of kings and proven to be very effective way of providing and managing irrigation water. Once these systems are in place, paddy farming can be sustainable in terms of managing costs associated with water management.
Organic paddy markets in Sri Lanka work mainly on trust and personal recommendations. As I have written many times, the consumer is interested in knowing “How organic is organic”. The organic certification system is costly, therefore individual farmers are not motivated in adopting them. Rather they depend on the recommendations of existing consumers, which is cheaper for them.
Some farmers have gone to the extent of describing how they cultivate in the packaging. This is again a strategy to avoid the cost of getting a proper certification. However, these activities will not be sufficient to drive a national program. Once there are many farmers in the value chain, it will be hard to distinguish each producer and a certification system becomes essential.
At the initial stage it may not be possible for each and every farmer to adopt organic certification. Therefore a certification is needed which might not be the most advanced but which would serve the purpose of the organic rice value chain. The best solution is to implement a certification system that can be monitored and controlled by the Government itself. Once the markets evolve, farmers can adopt more sophisticated certifications as required by the consumers.
When it comes to organic rice the certification might have to be tailor made. The majority of paddy lands that are being converted to organic are in fact the existing inorganic paddy lands. Therefore they already carry chemicals that have been dumped over time. On average it will take close to five years to remove the accumulated chemicals (this is based on the discussion I had among many organic farmers). Hence getting an organic certification for such a land will be problematic.
The National Program on Toxin Free Food has come up with a smart solution for this. For all the converted lands an initial certification will be issued that says the land is cultivated as organic only for that particular season. For every season the land/soil will be tested and a certification is issued. The complete organic certification will be issued once the land is cleared after soil tests.
One of the arguments against a Government-managed certification system was that it might create loopholes for farmers to justify their lands as organic when it is actually not. The proposed approach answers that concern and would probably help to build the trust among consumers. Now the consumer can make a conscious decision whether to buy organic rice that is partially organic or fully organic. The two categories might yield different prices for obvious reasons but that is how the price signals should work.
Prices and markets
I believe that organic produce should attract higher prices. Organic produce brings in something that other produce does not. These can be broadly categorised as Ecological Goods and Services (EGSs). Therefore they should attract a higher price.
Price premium is based on two things: the opportunity cost of supply by farmers and the willingness to pay by the consumers. At one point there has to be a tradeoff between these two elements and markets would clear at a particular quantity and price. This price setting is much more sustainable since it takes into account the proper market signals, the opportunity cost and the willingness to pay.
However, there could be a situation where the policymakers would prefer to provide organic rice at an affordable price to the consumer by absorbing the price premium to Government expenditure. The Government in this case will buy the organic rice at a higher price that reflects the opportunity cost of supply and will sell at a price that reflects the willingness to pay. The difference will be borne by the Government. While this could be a short-term solution that will encourage more farmers to cultivate and more consumers to consume organic rice, in my view it is not a sustainable solution. Subsidies in my view should be short-term solutions, not long-term.
However, one of the biggest problems that these national efforts on sustainable agriculture will face is the shortage of storage facilities. Once farmers start cultivating on a large scale, they would probably want to store the produce so that national supply can be managed in a sustainable manner. This might be a good situation for the Government to get involved. They could facilitate the building of storage facilities at community or farmer organisation level.
Scientific research in to organic agriculture must be a priority. A continuous innovation is needed in terms of new fertiliser mixtures, new paddy varieties and pests and disease management practices. I mentioned earlier that traditional rice varieties carry medicinal properties and that will be lost once new improved varieties starts integrating into the value chain. However it will open up research opportunities.
I do not believe the organic paddy value chain is backed up by enough socio-economic and market research. There are some interesting questions that need answers:
(1) Who are the main consumers?
(2) What is the profile of these consumers?
(3) What is the opportunity cost of accessing the necessary inputs?
(4) What role would the extension services play?
(5) What are the traceability mechanisms in place?
Policymakers need to think of two main aspects in promoting sustainable agriculture in Sri Lanka. These aspects represent the farmer side/the production side and the consumer side. These are:
(1) If organic farming is that good in terms of environment, health, social and economic, why won’t farmers adopt this easily?
(2) If organic rice is bringing in many benefits in terms of health and environment, why is the consumer base still low?
These questions are justified by research. Answers to these two aspects will help the policymakers to design the national programs better.
(Dr. Chatura Rodrigo is an agriculture and environment economist. The author can be reached at email@example.com and 94 77 986 7007.)