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Concerns on import ban on chemical fertilisers and pesticides

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The Green Socio-Economic Model for Development:

Letter to President Gotabaya Rajapaksa

Sri Lanka Agricultural Economics Association (SAEA) is the professional body representing the agricultural economists of Sri Lanka. Our membership endorses the government’s decision to adopt a Green Socio-Economic Model for development, as we firmly believe that such a strategy is vital for conserving the environment and improving human health. We agree that green approaches in crop cultivation contribute significantly towards achieving Sustainable Development Goals (SDGs). Moreover, SAEA is of the view that most of the current farming systems in Sri Lanka are unsustainable. Hence, the conversion of them into organic farming systems, in the long run, would help promote health of the people and nurture integrity of the nation’s environment. It is well known that many countries currently take systematic and pragmatic approaches to achieve this long-term objective by first setting targets, standards, and subsequently, investing and promoting farmers to adopt best practices. Therefore, we would like to extend our appreciation to the government for taking such a valuable decision to adopt the green socioeconomic model in Sri Lanka. 

SAEA also would like to bring to your attention some concerns on the appropriateness of the newly introduced regulation, to restrict forthwith the importation of chemical fertilizers and pesticides by the Gazette Extraordinary No 2226/48 of May 6, 2021, to achieve the above-mentioned broader development goal.

The SAEA predicts massive economic losses due to potential yield losses, in the absence of proper substitutes for chemical fertilisers and pesticides, with the implementation of the import ban on fertilisers and pesticides. The immediate adverse impacts on food security, farm incomes, foreign exchange earnings and rural poverty can be detrimental to achieving the cherished long term goals. The SAEA’s primary concerns, and the less costly policy alternatives proposed by its members in place of the newly introduced import ban, are given below for your kind perusal and consideration.

A. Appropriateness of using an Import Restriction on Agrochemicals to promote organic farming

The SAEA is of the view that the policy instrument identified by the government to promote organic farming is less appropriate due to potential economic losses and its incompatibility with other policy goals of the government. 

1. Economic cost to the society

When converting from conventional agriculture into organic farming, the government should weigh the technological, environmental, and economic costs and benefits. The preliminary findings of the studies conducted by the SAEA on potential economic losses of the import ban and respective estimations are given below for your consideration. 

(a) Agronomic studies reveal that the average yields from paddy can drop by 25% if chemical fertilisers are fully replaced by organic fertilisers. This loss in productivity could reduce the profitability of paddy farming by 33%, and rice consumption by 27%, if paddy is cultivated just with organic fertilisers with a complete ban on rice imports. In contrast, applying organic fertilizer with the recommended dosages of chemical fertilisers would improve the profitability of farming by 16%. 

(b) Absence of chemical fertiliser would drastically reduce the productivity of the Vegetatively Propagated Tea (VPT). With a 35% pro ductivity drop, the export volume of tea would go down from 279 to 181 million kg, causing an income loss of LKR 84 billion. The estate sector will likely incur significant losses compared to those of tea smallholders. These losses could further be aggravated due to increased cost of labour to apply bulky organic fertilisers. 

(c) The coconut yields would go down by 30% if chemical fertilisers and pesticides are not applied. This situation will adversely impact fresh coconuts availability for the production of coconut oil, desiccated coconut and other coconut products. The loss in foreign exchange earnings can be as high as LKR 18 billion, based on the assumption that only 26% of the total coconut extent is fertilized. When the additional cost for the importation of edible oils is considered, the loss of foreign exchange earnings will be even higher.

(d) The above results were derived considering the immediate effects on three agricultural sub-sectors. An analysis performed accommodating adjustments in the economy over the medium to long run reveals that a reduction in average agricultural productivity by 20% could cause a decrease in Gross Domestic Product (GDP) by 3.05%, suggesting an overall contraction of the economy with the implementation of the import ban. 

2. Compatibility with other development policies 

The proposed policy instrument is not compatible with the policy objectives stated in ‘Vistas for Prosperity and Splendor’. Given below are a few policy incompatibilities highlighted by the members of SAEA (Relevant statement from Vistas for Prosperity and Splendor shown in parenthesis). 

(a) Modernisation of agriculture (International export business through various value-added products backed up by new technologies): The SAEA would like to propose that the government considers Sustainable Intensification of farming systems to feed the growing population with rising incomes, seeking safe and nutritious food which are produced in environmentally sustainable farming systems, rather than converting all systems to fully organic agriculture, as its policy objective. 

(b) Food self-sufficiency drive (Make the country self-sufficient in the relevant products): Estimates reported in section A (a) indicate that a food deficit would be created in the country owing to yield losses. However, the current government policy on food self-sufficiency would not allow the policymakers to fill this deficit through imports. Such a situation could give rise to food price inflation, unrest, and starvation. 

(c) Freedom (People-Centric Economic Development): The chosen policy instrument does not provide flexibility to farmers to determine their least-cost food production methods, without harming the environment. This situation would violate the ‘people’s freedom’ policy of the government. 

(d) Rural-urban migration (Linking the village development together with the regional development): Contraction of the rural economy due to reduced farm profitability will lead to increased migration from rural to urban areas. With limited capacity of the manufacturing sector to absorb migrants, this will result in urban congestion.

(e) Commitments with the WTO and other international relations (Friendly, Non-aligned, Foreign Policy): The policy instrument chosen is not compatible with commitments to the WTO. 

B. Alternative Policy Instruments for making Food Systems more Environmentally Sustainable  

In light of the above observations, members of SAEA suggest the government use more cost-effective instruments to achieve the stated health and environmental outcomes, in place of the newly introduced import regulation. They note that globally, the approach to environmental protection has been evolving from a regulation-driven approach to a more proactive approach, involving voluntary and market-led initiatives. Accordingly, we wish to propose the following three-point policy package. 

 

1. Incentivize organic cultivation using safe and environmentally friendly organic fertilizers and pesticides: 

1. Open up pathways towards encouraging organic fertiliser production, storage, distribution, etc., and promote Public-Private Partnership (PPP) models to achieve those. 

2. Develop national standards for organic fertilisers and pesticides to ensure non-importation of substandard products to the country, and domestic production meeting specified quality standards. 

3. Improve awareness of various organic farming technologies among farmers through a strengthened extension system. 

4. Institutionalize and make Good Agricultural Practices (GAP) a mandatory national standard. 

2. Dis-incentivize use of chemical fertilizers and pesticides in an environmentally harmful manner: 

1. Revisit national standards for chemical fertilisers and pesticides to ensure non-importation of sub-standard products to the country. 

2. Impose environmental taxes on selected inorganic fertilisers and pesticides. 

3. Reduce and eventually eliminate the subsidy on chemical fertilizers. In phasing out the fertilizer subsidy, we wish to recommend the following steps.

I. Prioritize subsidies according to characteristics such as fertilizer type, agro-ecological region, season, and crop. 

II. For the targeted farmers, establish a voucher system that restricts farmers’ access to a lifeline amount [such as two bags] and require them to purchase the balance at market prices for a limited period. 

III. When the subsidy is lowered, introduce an output price support program to support the farm producers partially. 

4. Provide and support farmers to adopt site-specific fertilizer recommendations and integrated pesticide recommendations. 

5. Reduce and eventually eliminate protection provided to crops that are highly fertilizer intensive and erosive. 

6. Strengthen existing measures to improve awareness of the safe use of chemical fertilizers and pesticides. 

3. Cross-cutting proposals to safeguard the poor and vulnerable and improve the policy process: 

1. Maintain a safety net for the poor recognizing the possible increase in food prices. 

2. Identify a harmonized financing mechanism. For example, finances of saved fertilizer subsidy and environmental taxes can be used to subsidize organic fertilizer production and application. 

3. In formulating the strategic roadmap, adopt a consultative process involving all stakeholders (policymakers, politicians, agriculturalists, environmentalists, and the private sector) and also consider economy-wide impacts (macro, meso, and micro) and externalities.

Considering the economic loss, policy inconsistency, and counterproductive effects created by the regulation in the manner introduced, and the availability of relatively superior alternative measures, the SAEA humbly requests you to substitute the import ban on chemical fertilizers and pesticides with the set of alternative measures proposed above. We assure SAEA’s professional support to establish a green-economic model for the agriculture sector of Sri Lanka. 

 

Dr. SAMPATH DHARMADASA, President/SAEA 

Dr. SHASHIKA RATHNAYAKA, Secretary/SAEA 



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Opinion

Is AKD following LKY?

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by Chula Goonasekera
Rev. Dato’ (Sir) Sumana Siri

We, the citizens of Sri Lanka, have already witnessed significant reforms in governance under AKD’s leadership. This personally led process must continue consistently, free of bias, and within the framework of the law to ensure sustainable governance by the State, not the individual. Such efforts will help minimise the waste of public funds and lay a strong foundation for the nation’s development in the long term. We often look to Lee Kuan Yew (LKY), Singapore’s founding father, as an example of transformative leadership. He united three diverse ethnic groups—Chinese, Malay, and Indian—under the principle of honesty. Today, Sri Lanka faces profound challenges from past political corruption, economic instability, and social divisions. LKY’s leadership serves as a reminder that integrity, accountability, and a commitment to the greater good can redefine a nation’s destiny, regardless of its size or resources, similar to Singapore.

When Singapore gained independence in 1965, it was a small, resource-scarce nation facing political unrest and ethnic divisions. Yet, within one generation, it became a global financial hub and a first-world country. LKY’s leadership was pivotal, centred on three core principles: meritocracy, integrity, and pragmatic governance. He prioritised national security, social cohesion, and economic growth. His efforts to foster ethnic harmony included implementing bilingual education policies and enforcing anti-discrimination laws. Similarly, AKD should consider enacting legislation to prevent racially motivated demands, i.e. anti-discrimination laws, to safeguard the government from evil, selfish minds trying to destabilise the government’s commitment to equality. Such legislation will stop this burden falling on the leadership case by case.

LKY’s policies, though sometimes harsh, were rooted in practicality and long-term thinking. The Internal Security Act ensured peace and stability during critical years. Likewise, his investments in education and infrastructure established a foundation for sustained growth. His focus on political stability, a robust legal system, and zero tolerance for corruption inspired investor confidence. Singapore’s Corrupt Practices Investigation Bureau (CPIB) was empowered to tackle corruption at all levels. Sri Lanka must adopt a similar mindset to revitalise the Bribery and Corruption Commission, moving away from populism and short-term fixes in favour of strategic, future-oriented policies.

AKD’s primary election theme was anti-corruption, reflecting a key aspect of LKY’s leadership. His unwavering stance against corruption defined LKY’s pragmatic governance. He held public officials to the highest accountability standards, ensuring that anyone guilty of corruption faced severe consequences, including dismissal, public exposure, and prosecution. By rooting out corruption, Singapore built domestic credibility and attracted global investment. We in Sri Lanka need such legislation at the earliest opportunity to deal with various kinds of corruption that are appearing again and involving many public officials.

In Sri Lanka, corruption has long undermined public trust in institutions and stifled economic growth. With overwhelming public support, AKD is well-positioned to deliver on his promise to combat corruption. However, this needs to be done early before the government gets entangled with controversy over its own ‘tiered’ standards. Through comprehensive legislative measures, Sri Lanka can rebuild its institutions, restore public confidence, and chart a course toward sustainable development.

LKY was considered “cruel” by some because he treated all races equally without favouring any. AKD shares a similar stance. One of the hallmarks of LKY’s leadership was his unwavering commitment to meritocracy. This created a culture of excellence where the best and brightest minds were responsible for leading the country. In Singapore, recruitment and promotions across all sectors were strictly based on merit—capabilities, skill sets, and abilities—not on connections, nepotism, racial considerations, or personal favouritism. Although challenging to implement, meritocracy can be implemented with the open advertisement of qualifications needed, a transparent appointment process, strict job plans with annual reviews linked to customer feedback, and personal development strategies that are considered a necessity to continue. This approach will foster a culture of excellence and innovation, like Singapore, ensuring that the most capable individuals propel the country forward.

Sri Lanka must break free from the grip of favouritism and focus on nurturing talent through equal opportunities for all citizens, regardless of ethnicity or social background. Early signs of this approach are visible under AKD’s leadership. LKY understood that for a nation to progress, its institutions must be led by those who are truly capable, irrespective of their background. By adopting meritocracy, Sri Lanka could break the cycle of favouritism, nepotism, and ethnic division that has often hindered its development. Establishing a system where opportunities are based on ability and performance could unlock the full potential of Sri Lanka’s people, fostering a culture of innovation, growth, and national unity.

After gaining independence in 1965, during Singapore’s formative years, LKY focused on eliminating corruption, gang activities, and communist threats to create a peaceful and secure nation. The Internal Security Act (ISA) granted his administration discretionary powers to arrest and detain individuals without trial, when necessary, to prevent actions deemed harmful to Singapore’s security, public order, or essential services.

The ISA allowed preventive detention, suppression of subversion, and countering of organised violence against persons and property. Sri Lanka urgently needs a similar act to ensure that politicians and public officials comply with legally binding measures. With its Parliament still in its formative stages, we hope Sri Lanka will soon establish a comparable Internal Security Act. By eliminating corruption at all levels, as LKY did, Sri Lanka can inspire public trust and attract international investors who view stability and a corruption-free environment as prerequisites for investment. This approach could transform Sri Lanka into a manufacturing, business, and financial hub for the Indian Ocean region.

Under LKY’s leadership—often described as strict—Singapore transformed from a third-world nation into a first-world country. Sri Lanka has the potential to achieve even more, given its abundant natural resources, strategic location, and educated population that can be developed into a skilled workforce. With its prime position in the Indian Ocean, Sri Lanka could become a regional economic powerhouse—provided it fosters a stable and investor-friendly environment. Like Singapore, Sri Lanka should adhere to a non-aligned foreign policy to emerge as a crucial node in global trade and finance, maintaining friendly ties with Eastern, Western, and Asian powers while leveraging its strategic location.

While some label LKY’s methods as “cruel,” his leadership was not about oppression but discipline and fairness. Whether these policies were “cruel” or benevolent is debatable, but their results speak for themselves. He treated all races equally, fostering harmony in a diverse society by ensuring everyone felt they had a stake in Singapore’s future. Moreover, LKY’s economic policies were marked by simplicity and foresight. Low personal income taxes, the absence of capital gains and inheritance taxes, and a business-friendly environment encouraged reinvestment and entrepreneurship. By positioning Singapore as a global trade and financial hub, LKY ensured its economic resilience. Sri Lanka, too, must prioritise national unity. Divisive politics and ethnic biases must be curtailed to build a shared vision of prosperity and peace, as AKD is striving to do.

LKY’s leadership was built on three core tenets relevant to Sri Lanka today: meritocracy, integrity, and pragmatism. Encouragingly, AKD appears to be moving in a similar direction. One of LKY’s greatest strengths was his pragmatic, long-term approach to governance. He maintained tight control over domestic finances, preventing the internationalisation of the Singapore dollar and limiting the operations of foreign banks. This created an environment that attracted international firms eager to establish themselves in Singapore. Sound financial policies, a corruption-free environment, and a focus on technological advancement helped Singapore become a hub for multinational companies like General Electric. State-owned enterprises like Temasek Holdings and Singapore Airlines were run with business efficiency, often outperforming private sector competitors. Sri Lanka could adopt a similar model to enhance the performance of its state-owned enterprises and boost economic growth.

Singapore adopted a two-pronged financial strategy: becoming an international financial hub while ensuring its financial sector supported key domestic industries like manufacturing and shipping. Additionally, integrating foreign and local talent fuelled decades of sustained economic growth. LKY’s focus on economic development, making Singapore an attractive investment destination, and drawing world-class manpower offer valuable lessons for Sri Lanka.

To replicate such success, Sri Lanka must invest in state-of-the-art infrastructure, establish excellent air and sea linkages, and maintain a low and transparent tax regime.

Clean and efficient bureaucracy, a strong regulatory and legal framework, and a neutral diplomatic policy—balancing relations with global powers like the US and China—are critical. Developing clean, green cities powered by sustainable energy will also be key to achieving remarkable economic success akin to Singapore’s.

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Opinion

‘A degree is not a title’ – a response

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Reference the above-captioned letter in The Island of 16 Decembe, its writer, Philosophiae Doctor (PD), he is incorrect in his analysis of a Ph. D degree as a title. As Dr. Upul Wijewardena has said, only a Ph. D holder who can use the title ‘Dr’. However, the tradition is for those who have a medical degree to be called Dr. PD has written about the history of universities and quoted chapter and verse about the origin of degrees. We are now in the twenty first century and most universities have their own system of awarding Ph. Ds. For instance, British universities award Ph. Ds based on 100 per cent research whereas in American universities Ph. D degrees are awarded on the basis of 50 per cent research and 50 per cent course work. The research degree is given more weight at interviews.

PD has also said that a Masters’ Degree (MA) is essential to teach in a university.  Many universities including universities in Sri Lanka offer Assistant Lecturer positions to those who have first degrees with classes. Some time ago, the Dean of the faculty of Arts at Otago university, New Zealand had only a B.A. He was appointed Professor because of his publications. In American universities lecturers with a Ph. D are addressed as Assistant Professor. Then a Professor after retirement has to get permission from his university to use the title as Professor (Emeritus). There is no such requirement for a person with a Ph. D to use the title Dr.  Modern universities do not follow procedures that were adopted in old Europe mentioned by PD.

Dr. P. A. Samaraweera

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Opinion

Electricity tariffs cannot be reduced due to CEB Mafia

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Ceylon Electricity Board (CEB) has apparently become a law unto itself; it is increasing the salaries and other perks for senior staff at their will. There are 26,131 employees of CEB and its monthly salary bill is around Rs. 3,000 million, out of which 600 million goes for the salaries of engineers. A special grade engineer’s monthly take-home salary is reportedly about Rs. 919, 432 while an E1 grade engineer draws around Rs. 694,240 a month. These include a vehicle allowance of Rs. 250,000 and other benefits. The CEB has thought it is fit to regularly increase the salaries at the insistence of the powerful engineers’ union every three years without getting the approval of the cabinet or the public accounts committee of the finance ministry.

Out of the total number of employees at least 50% are political appointees recrutied by successive ministers of the power and energy ministry. Even the salary of a meter reader is Rs. 54,420 and it comes to around Rs. 125,000 a month. This is far higher and about 100% more than a graduate teacher. With such an excessive workforce earning exorbitant salaries no wonder that the CEB cannot reduce the electricity bills of consumers. There are 6.29 employees for every megawatt (MW) of power generated by CEB while the Malaysian Electricity Board generates six times more power and has only 1.15 employees for one MW of power generated!

PAYE tax should be borne by the employee and it is against the Inland Revenue Act for an institution to pay the PAYE tax due from its employees.  It has been revealed before the COPE (the Committee on Public Enterprises) that Rs. 5 billion has been paid by the CEB as PAYE tax to its employees during the period 2010-2019 in contravention of a Cabinet decision on 13 December 2007. This, the CEB has been doing at the expense of consumers, who have to pay higher tariffs.

Verite Research has revealed that Sri Lankan households pay 2.5 to 3 times more for electricity than the average cost to their counterparts in South Asian countries. Our rates are much higher than in Bangladesh and Afghanistan. For instance, a consumer using 300 units of electricity has to pay an electricity bill of Rs. 21,860 while the average equivalent rate in South Asia is only Rs. 7,340. This shows how our professional engineers have managed the CEB power generation so inefficiently over the years.

 The reason for this inefficiency is due to the neglect of renewable energies in Sri Lanka. The CEB engineers have always advocated for more and more coal-powered plants. They have deliberately blocked renewable energy projects for obvious reasons.  The Supreme Court has found the CEB guilty of blocking a proposal by Vavuniya Solar Power Private limited for a solar energy plant and ordered it to pay Rs 01 million rupees as damages. This, too, would have been paid from CEB funds and those who took such corrupt decisions have got off scot-free. The technical officers of CEB allege that CEB management has purchased power from private power plants despite an increase in hydro power generation. In case hydropower is insufficient to meet the demand another idling turbine at Norochcholai could have been put into operation. There are serious allegations that CEB engineers are intimately connected to such private power plants and even own all or part of them. The new government should appoint an independent commission to investigate allegations against the CEB.

Concerned Consumer

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