How to keep them poor…?
View(s):
Ruins of the aqueduct in Israel, built over 2000 years ago by King Herod to bring water from the north to the southern port of Caesarea which had no source of fresh water.
I was amazed to see that when an average Sri Lankan farmer earns US$ 3,160 for the country’s GDP, an average Israel farmer contributes over $107,523 to Israel’s GDP, according to World Bank data. It is the value-added share of the agriculture sector which makes up part of the GDP. I converted it to monthly earning: A Sri Lankan farmer earns $263 a month, compared to $8,960 a month earned by an Israel farmer. In principle, what is produced determines what is earned.
We don’t need any more evidence to understand the difference in living standards between a Sri Lankan farmer family and an Israel farmer family. An average farmer in Israel is “rich” as he earns a colossal income from his agriculture produce so that his family can live well. The Sri Lankan farmer is “poor” and thus he and his family cannot thrive from agriculture, although they may survive from that income.
Over the past few years, I had a couple of meetings and many communications with the former Sri Lankan Ambassador to Israel, Sarath Wijesinghe who has served there from 2013-2015. More recently, I had the opportunity to contribute to his edited book on “Foreign Policy Perspectives: Port City Colombo and International Financial Centre”. This week, I met him again to sit together for a panel discussion over the Port City at the Media Centre for National Development. As he shared some valuable information from his knowledge of Israel agriculture, I was inspired to bring it to our discussion today.
Israel and Sri Lanka
There are other valid reasons to justify my thoughts of bringing an economic insight from Israel, especially with its agriculture development, to our discussion. Modern Israel was created as a country in 1948 in the same year when Sri Lanka received Independence from Britain. Compared to the Sri Lankan heritage from Britain, Israel began from zero; it was a barren country with rocky deserts which had no water or any resource. The naturally arable land was less than a quarter of the country.
Israel is a small country of 22,000 square km with 9 million people; it is even smaller than Sri Lanka which has 62,000 square km occupied by 21 million people. There are about 1.5 million acres of agriculture land in Israel while Sri Lanka has about 6.5 million acres allocated for agriculture. And we feel even that is not enough and accordingly with the support of the politicians we further try to extend it to the deep jungles squeezing wildlife and starting even chena cultivation.
With the declaration of Israel as the country of the Jewish nation, there came the Israel-Arab wars that continue to exist even today. Thus, Israel is also a country in West Asia surrounded by many enemies in addition to its internal conflict between Israel and Palestine.
In the midst of all that, Israel has prospered over the past 73 years in almost every sector, including nuclear technology and war technology. As per 2009 data from the dairy industry, annual milk production per cow exceeds 10,000 kg in Israel, compared to 5,600 kg in Australia, 6,100 in the EU, and 1,200 in India. They produced fruits, vegetables, cereals and flowers. Israel farmers don’t water the soil and add fertilizer to the soil; rather they water the roots of the plants with fertilized water. Although Israel was a water-scarce land, which led the nation to use desalinated expensive water for everything, today the country even exports water to some of the neighbouring countries.
Colonial heritage
Compared with the harsh beginning of Israel, Sri Lanka received an independent country with a thriving plantation economy, established welfare system, basic infrastructure covering the entire country, a civil administrative system, a judicial system with law and order, a democratic political system, and finally a peaceful transfer of power from Britain to national leaders. What else do you need to start a journey of a nation? Anyway, that is not my topic today.
Let’s forget everything else, and just focus on my opening comment – an average Israel farmer earns $8,960 a month on average; how come a Sri Lankan farmer is still struggling after 73 years to feed his family by earning just $263 a month?
Some of us might think that it’s the “agriculture productivity” difference between the two countries. True, but why can’t our farmers be as productive as Israel farmers? Certainly, it is not the natural productivity of the arable land, because Sri Lankan soil is naturally more arable than Israel soil. Nevertheless, it’s worthwhile noting that on average Israel land productivity is about three-times the Sri Lankan land productivity.
Some of us might think that it is the “technology” which has increased the land productivity in Israel. Absolutely; but the question is why are Israel farmers capable of inventing and innovating new technology, whereas the Sri Lankan farmers are incapable of doing that. By the way, I must also say that we have taken care of our rural agriculture much better with government’s extensive assistance for agriculture sector with administered prices, protection from imports, and agriculture subsidies.
Too many people
I did some exploration, and here is what I found: Only 1 per cent of the workforce in Israel is occupied in agriculture, whereas in Sri Lanka more than 25 per cent of the workforce is in agriculture. One per cent of the workforce in Israel makes up to less than 40,000 farmers in Israel while in Sri Lanka there are 2.2 million farmers: A good point as to how less farmers make agriculture more productive!
It is the size of the land per farmer or, in other words, the average farm size. In Israel, the average farm size is 33 acres, compared with just over 1 acre in Sri Lanka, excluding the plantation sector. In other words, the Sri Lankan agriculture problem is that “too many farmers produce too little output” and thus they remain poor.
When the unit of production is too small, and its income is too little, the farmers are incapable of doing anything beyond “survival” – they have no capacity and resources to spend on introducing new technology and neither an interest to engage in such activity rather than trying with more agro-chemicals to push the boundaries of survival little more.
It is true that there have been research institutes carrying out inventions and innovations, extension services bringing new knowledge to people, extensive government support and protection throughout history; I am sure they have benefitted agriculture. But the fundamental issue – “too many people producing too little output” – continues to remain the same. The problem of our approach to agriculture is that we focus on “too little output” and not “too many people”.
Fundamental question
We shouldn’t think that there are so many people in the agriculture sector in Sri Lanka because we Sri Lankans love to pick it as our occupation; absolutely not. Majority of our farmers has become farmers not because they like it, but because they didn’t have any other option. I must exclude those Colombo-based middle-class professionals who hold 10 – 20 acres of land in the village with coconut, rubber, tea or paddy; I also have a couple of friends who love it, but they are not farmers by occupation. They also love to visit their farmlands once in a while as a hideaway place leaving the hectic Colombo life.
The majority of rural farmers that we talk about was just slipped into agriculture because of under-performing economic progress. Otherwise, they would have chosen more-rewarding jobs in non-agriculture sectors. If we understand this point, here is the key to solve the issue – pave the way for educated rural youth to move into non-agriculture sectors.
I don’t think Sri Lanka needs more than 500,000 farmers to get the output that they produce now. In fact, then they will produce even more, because they will have the capacity, resources and interest to produce much more.
(The writer is a Professor of Economics at the University of Colombo and can be reached at sirimal@econ.cmb.ac.lk
and follow on Twitter @SirimalAshoka).