Improving farmer incomes
View(s):Nearly two decades ago during Christmas with consumer prices skyrocketing, then Trade Minister Kingsley Wickremaratne ordered eggs to be imported from India.Indian eggs, sold at less than half the price of the local product, flooded the market and were eagerly grabbed by consumers. However the move was short-lived after local producers raised a hue and a cry and, rather than upset a vote base, egg imports were stopped. No consideration was given, at the time, to the needs of the consumer in providing the choice of a cheaper egg.
It was a classic chicken and egg situation! Which comes first – protecting the farmer or the consumer? This debate has been going on for decades despite the fact that local agricultural production is costly, unproductive and lacks quality.Political attention is once again being drawn to the viability of the traditional subsistence agriculture in which farmers focus on growing enough food to feed themselves and their families and sell the surplus. In existence is also the archaic ‘Ande” cultivation concept where farming lands are leased to others and payment received in the form of the produce similar to the barter system.
This agriculture model has not only failed farmers, eternally in debt (in paddy and minor crops), but also consumers who pay a high prices for essential food items. Times have changed, the younger generation is no longer interested in debt-ridden farming and consumers need to be considered as an equal priority.In the run-up to next week’s budget, new proposals are emerging on Sri Lanka’s land use and agriculture policies. While many appear to be progressive (but as repeatedly stated in these columns – implementation is the key and that has been a failure in the past), there is an element of confusion that is also surfacing.
For example, President Maithripala Sirisena told a recent gathering of economists that efforts should be made to produce the food that is imported. While the idea appears to be logically sound, veteran trade economist Lloyd F. Yapa, argues in a column on“land policy’ on Page 10, that it’s impractical in today’s globalized context where the accepted policy is for smaller countries like Sri Lanka (where production costs including labour are high) to produce high value export crops and import its essential needs from cheaper sources. In such a model, earnings from high-value exports are enough and more to meet essential food imports and lead to a trade surplus. As of now, few high value export crops are being produced except for products like gherkins and that too by big companies and high net worth entrepreneurs … not dozens of farmers struggling to pay bills.
Writer Yapa says a policy where Sri Lanka produces all its food requirements would be similar to the disastrous policy of import substitution that was followed in the 1970s leading even to starvation as imports were banned.With all the raw material and benefits at its disposal – land, all year round sunshine, enough water (if proper rainwater harvesting – apart from the giant tanks – is systematically done), an educated workforce, a range of eatable crops growing wild and large extracts of fertile land, Sri Lanka should be a paradise on earth. However despite all these pluses, the country’s residents are enjoying a far lower quality of life than Singapore (no raw material or land assets) or some smaller European countries also with limited assets.
Year after year, rather than stimulate the rural economy to export mode, politicians and policymakers are unwilling to rock the boat fearing such policies will fail when elections are around the corner.Some of the weaknesses in the system is the absence of a proper land-use policy where farmers have larger extents of land, are convinced to move to lucrative, exportable commercial production helped by bank financing, export market access and provided expert advice from state and private agencies.
The mindset of the rural farmer must also change but there lies the problem. Unlike city residents, most rural folk rarely have dreams, visions of a better life, a better home with modern acquisitions, better education for their children, a vehicle, etc. They believe it is their ‘karma (fate)” and that will never change and are content with what they have.Among their few modern assets is the mobile phone other than a domestic migrant worker seeking to improve her family’s well-being.Deputy Minister Eran Wickramaratne, during a pre-budget discussion organized this week by the Sunday Times Business Club, said one of the fundamental problems in society is the strong sense of entitlement among the people. “This is what we want; this is what we are entitled to; this is what we should get,” he said explaining the cultural mindset while “no one speaks of his or her responsibilities (to the nation”.
In a way, subsidies and handouts comes from this culture of ‘entitlement’ with ruling parties losing elections the moment ‘entitlements’ are withdrawn.Rural economies need to be transformed but as pointed out in last week’s editorial, new land and agriculture policies must be implemented through a bottoms-up approach rather than top-down. Referring to the Prime Minister’s mid-term economic policy statement, the editorial said: “What may be needed is an implementation strategy being developed equally from the top to bottom (with more focus on the bottom). For too long,
Sri Lanka has relied on a top-down approach where strategies and policies to induce investment and spending would result in a trickle-down effect and incentivise the rural economy. However by the time the ‘trickle’ happened, governments became unpopular as corruption took over and rural voters voted against such policies even if they were good.”Sri Lanka is running out of time in transforming the rural economy to make farming lucrative and improve lifestyles. However whatever being proposed should not be forced on the people… rather it should be through a consultative process.