SGLUMLY TARING in his paddy field deep in rural Sri Lanka, BR Weeraratne sighs. The regular raids of greedy elephants have been bad enough. But the government’s outright ban on agrochemicals will, it fears, reduce its yields by nadu and samba, two of the most popular rice varieties. Although the 56-year-old likes the idea of organic farming in principle, he believes that “the soil, the plants and the farmers all need time to learn it”. It should be implemented gradually. Otherwise, farmers like him risk being thrown into poverty.
But Gotabaya Rajapaksa, the president of Sri Lanka, is adamant. The former army officer was elected in 2019 largely on his reputation for ruthless dynamism. In 2009, as defense secretary to his brother Mahinda, then president, he brutally ended a long civil war against Tamil rebels. As secretary of urban development, he “beautifies” cities by driving thousands of people out of slums. As president, he took a military approach to tackling covid-19 by bringing in the military alongside medical personnel. More than 70% of those over 11 have suffered a double bite.
Mr. Rajapaksa’s military approach to making Sri Lanka the world’s first fully organic food producer overnight looks less encouraging. Of course, his manifesto (“Vistas of Prosperity and Splendor”) promised a revolution in the use of fertilizers. But it was to take ten years. So it came as a shock to Mr Weeraratne when a total ban was announced earlier this year. No further importation of agrochemicals will be authorized once stocks are exhausted. The Planters Association predicts a drop in tea production and export earnings of about 25% over the next six months, and then nearly half thereafter. Sri Lanka is the world’s fourth largest tea producer, exporting $ 1.24 billion worth of tea last year, or 1.5% of GDP.
More than 90% of farmers in Sri Lanka use chemical fertilizers and 85% of them expect crop losses in the coming season, according to Verité Research, a local think tank; nearly two-thirds support Rajapaksa’s policy overall, but 80% of them say they need at least a year to adjust.
Meanwhile, people still need to eat. Inflation is around 6% and food prices are up over 11%. Rising global commodity prices, declining foreign exchange reserves and domestic retail price ceilings have resulted in shortages of essential commodities such as sugar and powdered milk. On August 31, the president declared a state of emergency and appointed an army officer to regulate the market, including confiscating stocks.
As food began to run out, on September 29 he lifted the cap on the price of rice, which quickly jumped from 17 to 32% depending on the variety. Price controls on powdered milk, sugar, wheat flour and domestic cooking gas were lifted on October 8. Finally, the government has also authorized even more imports. However, his preferred solution to reduce a trade deficit which reached 42% of GDP has been to curb imports, such as fertilizers.
Foreign exchange reserves, at just $ 2.6 billion or enough for six weeks of imports, are dwindling. By July, the government must pay $ 7 billion to service its external debt. With short-term liabilities so far exceeding reserves, notes Deshal de Mel, economist at Verité, and Sri Lanka’s credit rating shattered by major agencies, borrowing in global financial markets is virtually impossible. Basil Rajapaksa, the finance minister (another brother of the president), admits the situation is grim. Covid, he says, contributed to a loss of $ 8.6 billion in revenue. Tourism revenues, typically $ 3-4 billion a year, have collapsed. Sri Lankans’ remittances abroad have fallen 35% from a year ago.
Most independent economists believe that a IMFThe sustained restructuring program is the least bad outcome. But the government would find it difficult to agree to terms that undermine the country’s much-vaunted sovereignty – and most importantly, crush voters like Mr. Weeraratne, who are already disillusioned. Like the country’s crops, the Rajapaksas need, to say the least, a pick-me-up.■
This article appeared in the Asia section of the print edition under the headline “More from Mr Rice Guy”