Rajapaksas made the fatal mistake of forcing the nation to go organic by outlawing chemical fertilizers in April 2021.
What is more dangerous than the kiss of Judas? Infatuation with intellectuals’ ideas. Sri Lanka is suffering on account of both, but the latter has proved to be more lethal. While its association with China in infrastructure projects weakened it financially, its ban on fertilizers, promoted by green fanatics resulted in the worst economic crisis it has been facing since Independence in 1948.
By way of its Belt and Road Initiative, China has been able to ensnare Sri Lanka into a debt trap. Almost 10% of the island nation’s total foreign debt is in the form of concessionary loans. This is besides the commercial loans through Chinese state banks. Sri Lanka was forced to hand over the Hambantota port to China for 99 years.
India, on the other hand, has acted like a friend in need, extending a $500-million line of credit for fuel purchase, but that may not be adequate. For the situation is very bad.
“Sri Lanka is a classic twin deficits economy,” an Asian Development Bank working paper said in 2019. “Twin deficits signal that a country’s national expenditure exceeds its national income, and that its production of tradable goods and services is inadequate.”
The situation was worsened by the Covid pandemic. President Gotabaya Rajapaksa and his brother, Prime Minister Mahinda Rajapaksa, also did a lot of damage to their nation because of their economic mismanagement. The country could still have weathered the storms, but then the Rajapaksas made the fatal mistake of forcing the nation to go organic by outlawing chemical fertilizers in April 2021.
The decision was hailed by green terrorists, whose agenda Colombo had accepted and executed. The Indian environmentalist Vandana Shiva said in June last year at a virtual summit, “This decision will definitely help farmers become more prosperous. Use of organic fertilizer will help provide agri products rich with nutrients while retaining the fertility of the land.”
As and when biodiversity of the ecosystem improves, the harvest will also improve and crops will be resistant to weeds and various diseases, she added.
The opposite of whatever green fanatics say is always true; the Sri Lankan experiment was no exception. The fall in farm yields was steep. The ban was withdrawn in the wake of extensive protests, but the damage was done, with the paddy yields declining by around one-third all over the country.
The impact of the poor paddy crop could push up the retail price of rice by around 30%, said Buddhi Marambe, an agriculture professor at the University of Peradeniya, who blamed the decision to ban chemical fertilizers. “That’s where the problem is,” he told Reuters. “Yields will likely be lower next harvest season as well. So, costs will keep increasing even 4-5 months from now.”
Tea, another major crop, suffered even more. “The ban [of chemical fertilizers] has drawn the tea industry into complete disarray,” master tea maker Herman Gunaratne told a news channel. By the way, he is among the 46 experts selected by Rajapaksa to guide the organic revolution.
Tea production is expected to fall by half because of the ban. Since tea is Sri Lanka’s biggest export, constituting around 10% of the island nation’s export earnings, the precipitous decline in its production has an impact on currency exchange rates and forex reserves. Sri Lanka’s central bank boss had to quit.
It has proved to be a disastrous step. Sri Lanka is now facing severe food shortages; there are long queues for the purchase of essential items. Typically, the government has blamed everybody—from hoarders to the media—for the problems it generated. It also declared a state of emergency. Worse, it has resorted to harsh measures like deploying armed forces to discipline traders suspected of hoarding and profiteering. The supply of essential goods is now under strict control.
It is not that organic farming is bad or fertilizers and pesticides are good. But organic farming can’t become beneficial for the greater good by executive fiats; it has to grow naturally, indeed organically; it has to adjust to the economic ecosystem. But it was thrust upon the market as a result of a politician’s fancy.
The diktats like ban on fertilizers are the consequences of a deeply flawed understanding of the economy: that government can decide the course the economy should take. The truth, however, is that things happen in the economy; and they should be allowed to happen in their natural course so that change is as painless as possible.
But intellectuals regularly present outlandish ideas to politicians. Sometimes the latter accept such ideas. The consequences are disastrous; Sri Lankans are realizing that now.
The author is a freelance journalist