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The economy cannot be revived without the revival of agriculture. The immediate focus should be on increasing agricultural production to its potential. Essential services too must function to enable industrial production.

Current focus

The current foci of discussions on the economy are the severe shortage of foreign currency, the ways and means of ensuring foreign debt sustainability to obtain the agreed Extended Finance Facility (EFF) of US$ 2.9 billion from the International Monetary Fund (IMF), increasing exports, and the reform of the economy to achieve seven to eight percent growth.

Priority

These are essential concerns and laudable objectives. However, the immediate priority should be getting the economy moving by reviving agricultural production to its potential.

Three sectors

All three sectors of the economy are functioning at much lower capacity than their potential owing to severe constraints in essential inputs. This is especially so in agriculture. Agricultural production has been hampered by a shortage of fertiliser and agrochemicals, industry by lack of industrial raw materials and services by both lower demand and high costs of production, among other reasons.

Improvement

No doubt there has been some improvement in production conditions, but serious constraints persist. The availability of petrol and diesel and lesser power cuts have enabled factories to operate at fuller capacity, transport inputs and produce and transport workers. These were severe constraints for several months.

Priority

While constraints to manufacturing and essential services such as transport must be eased, top priority should be given to get the country’s agricultural, industrial and essential services functioning and producing at their potential capacity. The revival of agricultural production is foremost.

Agriculture

Although agriculture contributes only about seven percent to GDP, it remains the backbone of the economy in several ways. The recent set-back to agriculture has had a devastating and pervasive impact on the economy and was a prime cause for social unrest.

Impacts

The shortfall in food production has increased poverty, hunger, starvation and malnutrition.

Fertiliser

Agricultural production has been affected by a shortage of fertiliser and agrochemicals. This shortage has affected paddy and food crops, as well as tea, the country’s main agricultural export.

Farmers

Although there have been shipments of fertiliser, farmers in many regions have been demonstrating that they did not receive adequate fertiliser in time for the Maha season’s cultivation.

There have been difficulties in distributing the available fertiliser. Farmers have been denied adequate fertiliser at the needed time. In spite of pronouncements that fertiliser is available, ground reality appears to be that fertiliser was not available in sufficient quantities on time. Fertiliser delayed has been fertiliser denied to farmers.

Paddy production

Such delays have reduced food production significantly. According to the Agriculture Department and the Census and Statistics Department, the Maha 2022/23 paddy harvest would decrease by about 30 percent from the previous low yield, owing to the lack of appropriate fertilisers. It is a steep decline from the earlier harvests and the lowest in several decades.

Adequate supplies

Now that adequate fertiliser has been sent by foreign countries, the UN FAO and international organisations, these must be available to farmers for Yala 2023 to increase paddy production to more than the previous Yala harvest. This is a realistic goal that will have a multiplicity of economic and social benefits.

Benefits

A re-bouncing of paddy production would reduce rice imports, enhance rural incomes, reduce poverty, decrease hunger, starvation and malnutrition and reduce the cost of living. These benefits would make a significant impact on the country’s economic and social well-being. However, it will not contribute much to GDP growth.

Tea

Tea production has decreased by ten percent in the ten months of this year. During the first ten months of this year (January to October 2022), tea exports of 211.6 kilogrammes was a decrease of ten percent, compared to the same period in 2021.This is particularly unfortunate as international prices of tea rose sharply this year.

Fetiliser and agrochemicals

Tea production too has been affected adversely by a delay in the availability of fertiliser and the lack of glyphosate so vital for weed control on tea lands. This shortage that has affected mostly tea, the country’s main agricultural export, also impacted both paddy and food crops as well. While production in Maha 2022/23 is expected to decrease by about 30 percent, tea production has decreased by ten percent in the ten months of this year.

Tea production Plan

The plan prepared for the development of tea production in the short, medium and long-run must be implemented to ensure an increase in tea production and exports.

Funds

The release of adequate funds from the Tea Cess Fund is imperative to enable the growth of the tea industry. However, as in previous years, the government’s financial constraints and stringency could hamper medium- and long-term development of tea production.

Spices

Similarly, there is a robust demand for the country’s quality spices, especially, cinnamon, cardamom and pepper that fetch premium prices. In spite of budgets repeatedly announcing investments in these crops, there has been little progress. The exportable quantities of these remain stagnant or declining.

Fisheries

The fishing industry has been severely affected by a lack of kerosene and diesel and their higher costs and availability. Now that there has been generous contributions of these from foreign countries, there must be a redoubling of efforts to revive fisheries to increase production and enhance the incomes of the fishing community that has been adversely affected.

Set-back to manufactures

Export manufactures have fared well owing to a remarkable resilience that enabled an increase in export manufactures by nine percent in the ten months of the year and was on an increasing trend with manufactured exports increasing by 12 percent in October compared to the previous October. However, the recessionary conditions in our markets in the west are a serious threat. This adds a further reason for the development of agriculture.

Summing up

In spite of the severe constraints on foreign currency for imports, the release of foreign currency for imports must give priority for obtaining the imported raw materials for increased production. Foreign assistance must be channelled to obtaining fertiliser and agrochemicals that are reducing production of food crops and tea. Timely availability of inputs for agriculture at affordable prices is vital to resurrect agriculture.

There appears to be a lack of administrative capacity to distribute the fertiliser country-wide. Foreign assistance must be efficiently distributed and more assistance sought to bridge any gap in resources.

Conclusion

Unless we find the ways and means to overcome input constraints to our productive sectors, the needed economic revival will be a mirage. Strengthening the fundamental of the economy is vital to stabilise the economy before a take off to a higher trajectory of growth of seven to eight percent.

It is good to have high targets but getting the fundamental strengths of the economy are vital prerequisite and pre-condition for economic recovery and growth.