Agriculture reform

In the first quarter of 2018 the overall economy grew by 3.2% but agricultural activities expanded by 4.8%. The agriculture sector, which recorded negative growth rates consecutively over several quarters due to unfavourable weather conditions, seems to have recovered and commenced recording positive growth rates since the fourth quarter of 2017 but much remains to be done to make this growth sustainable. 

Over several decades Sri Lanka’s major milestone achievement was rice self-sufficiency but the country fell behind its fight to infuse technology and competitiveness into the industry. Agriculture is heavily dependent on Government hand-outs such as the fertiliser subsidy and price control that comes at significant cost to public finance and consumer affordability.   

The share of the population employed in agriculture has remained at about 30% over the past 10 years, even as the share of the sector in national GDP has continued to decline to 7%. As much as 70% of Sri Lanka’s entire workforce is directly or indirectly involved in agriculture and a huge section of it is informal, which means they do not get the protection of welfare systems such as pensions. 

This implied and persistent inequality adds to the urgency to rethink the strategic direction of future agricultural development – how to sustainably increase rural incomes and promote the development of a modern agriculture sector that meets the needs of an upper-middle-income country that Sri Lanka aspires to be. 

It is widely-known that smallholder farmers in developing countries use too few modern inputs and technologies, which often results in low yields and poor quality crops. There’s a myth that labour is abundant and cheap, but the constraining factor for agriculture growth and profitability is labour availability and efficiency, especially given Sri Lanka’s battle to increase labour to the industry and services sectors that have fewer employees but higher productivity. 

Mechanised technology, drought-resistant crops and other innovations are a huge need in the local agriculture sector. Products that can be exported, such as organic fruits and vegetables, need to evolve so smaller farmers can also benefit.  

Open access technologies are an essential principle, especially seed, where all recent technological advances are based on 10,000 years of collective experimentation and sharing. No one and no corporations should be allowed to privatise the results of ongoing research. Companies can sell their new varieties, but once sold, they re-enter the common pool that anyone should be able to use and improve on at will.

Post-harvest mechanisation can also make a major impact in product quantity and quality. More productive use of land, water, fertiliser and labour can increase productivity. Sri Lanka also has high levels of post-harvest losses, about 40% of all fruits and vegetables that are grown end up in garbage dumps because there are few competent storage systems and links to the market. Sri Lanka also lacks regulatory mechanisms and labs for research and development in agriculture including getting patents and meeting regulations for export to developed markets like the European Union (EU).  

Traditionally, State involvement produces uneven benefits, favouring farmers with financial resources of their own, with access to more land and with some formal education. The majority of resource-poor farmers are excluded from public support for agriculture, with infrastructure and institutional frameworks designed for the minority to benefit. The Government has to make sure that the latest funding is used to reach as many people as possible and it becomes the start of a larger sustained program of agriculture modernisation and food security.