Tuesday, 19 April 2016

Yield Vs. Cost: The Difference between Organic and Inorganic Farming in Sri Lanka

By Chatura Rodrigo
Research Economist, IPS

Chemical based paddy farming is geared towards achieving higher yields with new improved rice varieties and new farming techniques. Therefore, the popular argument against the adoption of organic paddy farming is that it does not generate enough yields and that might constrain the supply of rice for Sri Lankans. However, a majority of organic farmers defend their efforts guaranteeing same yields as chemical based paddy farmers. (Organic farming also provides additional benefits, mainly Ecosystem Goods and Services). If there is no difference in the yield, the question raises as to “why farmers do not adopt organic farming?”. Perhaps, it may be the case that it is not about the yield that farmers are concerned, but about the cost that they incur in the production process.

Friday, 8 January 2016

Reducing Fertilizer Dependency in Paddy Farming in Sri Lanka: Should We Change Our Approach?

By Chatura Rodrigo
Research Economist, IPS

Sri Lanka’s paddy farming solely depended on organic fertilizer many years ago; but the use of chemical fertilizer is now on the rise, and has become a much discussed topic. Many argue that farmers use excessive chemical fertilizer, well above the recommended levels, as they receive the products at considerably subsidized rates. However, the literature highlights that providing fertilizer subsidy for paddy farming proves to be less efficient in increasing production. Researchers suggest that policy makers should focus on other input subsidies such as reduced prices on seed paddy, financial assistance towards mechanization, and output subsidies such as guaranteed farm gate prices for paddy. Paddy farmers are currently given a guaranteed farm gate price.  

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For the past three years, research at the Institute of Policy Studies of Sri Lanka (IPS) argued that the fertilizer subsidy should be gradually removed from paddy farming; suggesting that the subsidy be removed from the non-commercial paddy farming areas in the short run and from the commercial areas in the long run. Meanwhile, the 2016 Budget came with a surprise proposal to completely remove the fertilizer subsidy and introduce a coupon system. Now, a paddy farmer is entitled to a maximum of LKR 25,000 per hectare of paddy land in the form of a voucher or coupon. This allows the farmer to buy fertilizer from private markets at a competitive rate, permitting private markets to develop. Whilst the argument made was for a smooth transition, the sudden removal of the subsidy raises more questions. Some burning questions are: Can poor farmers face competitive market prices of fertilizer? Would the inability to purchase large quantities of fertilizer drive the farmers to use more organic fertilizer? Is organic fertilizer ready to take on the role of a substitute? While trying to answer these questions, this article explores additional measures to reduce fertilizer dependence in paddy farming.