Turning a livelihood into a business

Thursday, 7 July 2011 00:00 -     - {{hitsCtrl.values.hits}}

AGRICULTURE is in many ways the lifeblood of Sri Lanka. Even though the contribution to the national economy is only 12%, far below its potential, in terms of providing a livelihood for the people it continues to generate much income. Interestingly, 35% of Sri Lankans are directly or indirectly employed by the agriculture sector, but this number increases to 60% in rural areas. This alone gives an indication of the importance of this industry.

However, is the way agriculture is thought about right? Is considering it a livelihood the best way to maximise its return? Does agriculture need to evolve as more of a business and be considered less as a livelihood? Everyone admits that Sri Lanka’s agriculture and fisheries have underperformed consistently. Lack of research and development, high productivity costs and low production are some of the problems that have plagued agriculture for decades. Lack of diversification, targeting niche markets and developing the understanding of farmers so that they can decrease their post harvest losses are all points that need to be dealt with.

Given the high dependence on agriculture, it is imperative that this sector is nurtured, for many other businesses depend on the buying power of the rural masses for their profit. If the agriculture sector suffers, then the network of other businesses is bound to undergo a tenuous stretch as well. Therefore, it is clear that developing the agriculture sector would result in inclusive development. Another point is that agriculture is in a very real sense about food security. As food prices increase, poorer nations are finding that they are vulnerable to slowing of economic growth and social tensions. Sri Lanka can minimise these evils if more attention is paid to this crucial sector.

Another point is that Sri Lanka spends a large amount of money on food imports. Every year billions are spent on basics such as milk power, Maldive fish and a host of other goods that can easily be produced in Sri Lanka. In fact, dairy farming as been identified as one of the most profitable branches of agriculture by private companies. This will save much foreign exchange for Sri Lanka while increasing food security.

Warehouse and storage facilities must be developed with the private sector so that prices are kept stable and the ‘lean and glut’ phases that the economy goes through are reduced. At present, due to bad logistics, as much as 40% of vegetables, fruits and fish are wasted. These losses can be minimised if infrastructure is connected to agriculture trade.

From paddy to tea, rubber and coconut, Sri Lanka’s agriculture has performed well below potential. Facing a strong labour shortage, the industry needs new technology to face growing population demands. Instilling respect for the sector will also reduce the brain drain and ensure that a new generation will be equipped to consolidate Sri Lanka’s access to quality food.

The plantations sector is another branch that has needs. One of the aspects that the Government can consider is providing long-term credit to the plantation companies. As many know, growing crops is a long-term investment and currently experts concede that loans are limited to four to five years, which is too short a time span. This, together with new technology and attitudes, is essential for the sector to grow.

Agriculture should be seen as a business for the people and not as just a livelihood.