Welcome to the ‘CLIMATEnet Blog’, - launched under the Climate Policy Network of the Institute of Policy Studies of Sri Lanka (IPS).
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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
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.
Prices Will Reduce The Use Of Fertilizer - But At What Cost?
IPS Research points out that increasing fertilizer prices will
significantly reduce its usage. The proposed coupon system might allow farmers
to use fertilizer on the same proportions as the subsidy system; however, they
now have to face the private market prices. If that happens, the dependence on fertilizer
will not minimize. If the coupon does not cover the same quantity of fertilizer
as before, then the farmer will have to find additional funding, limit fertilizer
use or reduce the cultivation area. Seeking additional funding can drive poor
farmers to deeper poverty, while reducing the area of cultivation can decrease
the rice supply, threaten rice self-sufficiency and increase farm gate prices. The
ideal solution would be to reduce chemical fertilizer use and substitute it
with organic fertilizer. However, the million dollar question is whether the
organic fertilizer market is ready to take on the demand?
Is Organic Fertilizer a
Even today, organic paddy production is only around 5% of the
country’s total paddy production. Unless the government provides a considerable
subsidy on organic fertilizer, the farmers may not opt to utilize organic
fertilizer. Added to that, there are other concerns. Organic paddy farming goes
hand in hand with traditional paddy varieties. Though traditional paddy
varieties have health benefits, the consumer preference towards these varieties
is largely at debate. Many farmers rely on leafy and animal manure as their
source of organic fertilizer, which is not sufficient at a commercial scale.
Commercial organic fertilizer is hard to come by and mostly not affordable for
farmers. Further, there are no price regulations for organic rice. While the
urban consumers are willing to pay around LKR 90 – 120 for 1Kg of organic rice,
the average urban store price is between LKR 180-250. As a result, organic rice
only attracts a high income segment of the society. Therefore, it is not ideal
to rely on organic fertilizer to reduce chemical fertilizer dependence. It may
reduce the chemical fertilizer use in the long run but it will take a national
level policy intervention to strongly push the adaption of organic fertilizer
in the short and medium terms. The constraints in adapting to organic
fertilizer are even visible through the analysis of empirical data. A recent IPS
study shows that the demand for fertilizer is relatively inelastic with regard to
the price of chemical fertilizer. This shows that organic fertilizer is still
not fully ready to take on a substitution role.
Lead to Less Fertilizer Use?
Labour is becoming less available. The increasing labour prices
across the country are evidence of this. One way to reduce labour dependence is
to introduce more mechanization to paddy cultivation. According to IPS research,
an increase in labour prices leads to an increase in the use of chemical
fertilizer. Therefore, it is essential to increase the level of mechanization
in paddy farming so that less labour is required and chemical fertilizer use
will reduce ultimately. However, a majority of paddy farmers in Sri Lanka are
small farmers that cultivate average lands of 0.5-2 acres. Therefore, most of
these farmers cannot afford large scale machinery, as they simply lack economies
of scale. To this date, only basic machinery is used to plough the land and
threshing of paddy. However, a majority of small scale farmers still use labour
for a large part of land preparation, seed sowing, planting and harvesting.
Paddy cultivation in Sri Lanka has little room to introduce a
higher level of mechanization due to land size and scale of operations. A
rational farmer will not be persuaded to spend more money to introduce
mechanization just to reduce the use of fertilizer, unless mechanization is
financed by an external source. Therefore, while increased mechanization may
reduce the use of chemical fertilizer, it shows little promise in achieving the
objectives unless the government facilitates mechanization.
Pesticides Free Paddy
Farming – A First Step?
The next complementary input in paddy farming is pesticides. Intensified
pest attacks over time have made pesticides essential for paddy farming. Farmers
regularly apply pesticides to reduce the pests from spreading in a large area
of cultivation within a short period. There
are chemical as well as bio-pesticides. According to research, when applied, chemical
pesticides have the ability to remain in the plant material and create health
issues in the long run. Furthermore, application of chemical pesticides without
proper safety equipment can create respiratory illnesses. While application of
chemical fertilizer is harmful, the application of pesticides creates far worse
health and environmental issues. In the case of excess chemical fertilizer application,
the affected parties are basically the consumers. However, the use of excess
pesticides will have a direct impact on the farmers who apply the product.
Furthermore, chemical fertilizer destroys many micro and macro fauna and flora
that are useful for paddy farming, while harming valuable ecosystem goods and
services. However, the use of bio-pesticides does not have the same impact.
It would be easy to convince a rational farmer to reduce the
use of pesticides where it is harmful for him and the consumers, rather than asking
him to give up chemical fertilizer straight away, which is given under a heavy
subsidy. Once farmers are convinced and practice
giving up pesticides, it will be easy for them to understand the harmful effect
of any chemical use in paddy cultivation. This could drive them to reduce the
use of chemical fertilizer in the long run. This is called Non Pesticidal
Management (NPM), which has been practiced in many parts of the world and is heavily
popularized in India. The ecological and economic problems of pests and
pesticides in agriculture gives rise to several eco-friendly innovative
approaches, which do not rely on the use of chemical pesticides. These
innovative approaches are sometimes country specific but many are universal.
Use of bio-pesticides and traditional practices were common during the early
stages of cultivation in Sri Lankan history. However, with the increasing
popularity and accessibility of chemical pesticides, farmers have switched to
these methods. Although chemical pesticides are costly and are not subsidized,
almost all farmers, apart from organic farmers use them at a high rate.
What Should Sri Lanka
The impact of the coupon system is yet to be known. It may
take several cultivating seasons to see how farmers adjust to increase in fertilizer
prices. It is clear that organic fertilizer would not stand up to the challenge
as a substitute in the short run unless the government provides a major
subsidy. However, the government can support small farmers by increasing the
level of mechanization and this can be through loans for capital investments
and training programmes. However, it is a long shot. Allowing the market system
to determine the level of fertilizer consumption is a more economically sound
approach. Farmers who can afford will keep on applying chemical fertilizer
while others will reduce their consumption but that could have serious consequences
on the price and increasing the production of rice. Therefore, additional
efforts are essential.
One promising way to reduce chemical fertilizer
dependence is to adapt NPM approaches and gradually reduce chemical fertilizer
application. It may require strong efforts in terms of education, extension and
demonstration of best management practices. However, a farmer who understands
and believes in the harmful effects of chemical pesticides will be more willing
to give up chemical fertilizer gradually. An important thing to remember is
that these initiatives take time and it is impossible to adapt to zero
application of chemical fertilizers. There should always be a sustainable mix
of chemical and organic fertilizers that does not threaten health and the environment.
The writer, Chatura Rodrigo is a Research
Economist at the Institute of Policy Studies of Sri Lanka.