Towards a people-centered economy :Budget 2021

Prime Minister Rajapaksa presenting budget 2021 in Parliament

By Dr. C. S. Weeraratna (csweera@sltnet.lk)
Former Professor of Agriculture
Ruhuna and Rajarata universities

As per the policy manifesto of President Gotabaya Rajapaksa, ‘Vistas of Prosperity and Splendor’ (‘Rata Hadana Saubhagyaye Dekma’), one of the main objectives of the government is creating a people-centered economy through rural development. The Finance Minister in his budget speech recently emphasised the importance of improving the rural economy. In this regard, the rural people play an important role as nearly 80% of the population live in rural areas. Hence, any programme to improve the rural economy needs to consider the rural people whose main source of income is agriculture.

Around 30% of land is used for cultivation of food crops and planation crops. About two million smallholder farmers living in rural areas and cultivating around 900,000 ha produce most of the food the country requires. Approximately, 800,000 ha are under planation crops such as tea, rubber and coconut, and about 20% of exports are produced by those working on these estates. Thus, those in rural areas including estates contribute to the economy of the country to a great extent.

Sri Lanka is a land of villages and there are around 14,000 of them. A majority of the population, nearly 80 percent, live in villages and on estates. According to recent estimates about 30 percent of the total households in rural districts of Sri Lanka live below the poverty line. Headcount Index reported for Badulla and Monaragala districts is around 37%, and the values reported for Matale, Puttalam, Hambantota, Kegalle and Rathnapura were 30, 31, 32, 32 and 34 percent respectively.

A socio-economic survey conducted in the recent past indicates that although the rural sector has the ability to engage in productive activities, many issues are constraints. Nutrition surveys conducted in the recent past indicate high prevalence of malnutrition among those in rural areas which may have been caused by chronic poverty.

Thus, for the success of any development programmes to improve the rural economy, it is essential to address the problems of the rural communities. However, the previous governments did not give priority to these critical issues faced by farmers. As indicated above, they continue to live in abject poverty as a result. Most of them have to pawn their jewellery or resort to some other ways to obtain finances to obtain agricultural inputs such as seeds, fertilizers, pesticides and labour. Some of them have become prey to the micro-credit companies.

Lack of reasonable transport facilities in the rural areas is one of the main setback for Sri Lanka’s overall prosperity. People living in some rural areas have to cross rivers using inflated rubber tubes as there are no bridges. A large number of rural roads remain in a dilapidated condition but, the authorities are more interested in constructing highways.

Farmers are forced to obtain seeds which is a sine qua non for crop production at a very high cost. For example, a kilo of chilli seeds is around Rs. 170,000 and a kilo of cabbage seed is sold at Rs 400,000 in the market.

Fertilizes which are necessary for crop production are not available at correct times or not available at all.

Pest attacks cause considerable problems to farmers. Last year, there was sena caterpillar called “Fall Armyworm” (Spodopteria Frugipedera), which destroyed large extents of cultivated crops. According to press reports, the same pest is destroying thousands of acres of maize in Ampara causing severe difficulties to the farmers. Brown Plant Hopper tends to destroy paddy crop in some areas during some months.

In spite of the country receiving around 100 billion cubic metres of water annually, there are frequent water shortages, mostly in the rural areas where there are around 12,000 tanks. Most of them are silted reducing the water holding capacity of these tanks causing rural communities to face shortage of water which seriously affect crop production and various domestic activities.

Almost daily we hear about deaths of many people in the rural areas caused by wild elephants that roam in the rural villages, destroying property aggravate the socio-economic hardships the rural sector has to face affecting the health, education and many other aspects of the rural population.

Around 70,000 people in many districts of the country are affected by a chronic kidney disease (CKDu) . They are mostly in the rural areas of the country and are affected socially and economically. The patients in the final stages of CKDu have to go for dialysis which again affects the rural people economically.

Difficulties farmers face in marketing their produce at reasonable prices are another serious problem. There is no centralised planning in farming in the country, and that sometimes leads to farmers cultivating same crops and gluts. Farmers are often forced to destroy their produce.

Farmers’ inability to market their produce at a profit is an issue the authorities need to take cognizance of. Previous governments attempted to solve this problem, but they appear to have failed miserably.

The previous governments launched various programmes such as “Api Wawamu-Rata Nagamu” and Divineguma to increase national food production. But the fact that we spend around Rs. 300 billion annually to import food indicate that these programmes were not effective.

If the authorities are genuinely keen to improve the rural economy, they need to address these issues. The present strategies must be changed and need to be village-based. The villagers must be assisted to improve their economic activities and make them more productive. All technological knowledge generated by researcher must reach the villagers. There has been rhetoric on rural economic development during the last few years. It is meaningful and effective actions that are necessary.