Amongst the many mistakes made in the past, the agricultural policies adopted by various governments stand testimony to one of the most colossal blunders in the history of this island.
I would venture so far as to say that the country would not have suffered this ethnic strife had a farsighted policy been adopted at the outset, ensuring those in this field are fairly compensated and therefore are encouraged to produce to an optimum.
I believe a fundamental problem has been that policies have been set up by armchair academicians and politicians not in tune with the realities on the ground as far as farming is concerned.
To take an example from the past. In the 1920s a Minneriya Agricultural Company was set up with shareholders much in the way of a quoted company to open up vast stretches of the land in the Polonnaruwa district that had hitherto been thick forest after the fall of the Kingdom based there over a thousand years previously.
It was as disaster, for many reasons. Malaria being one, but the lack of foresight of the planners to take into account all the contingencies. We suffer from a similar lack of foresight even now.
If one takes transplanting of paddy as another example; 30 years ago transplanting was the rage, as the new high yielding varieties had much higher yields when it was transplanted. Workers used to be brought in from places such as Matale for the few weeks to transplant as even then there was a shortage of labor for these periods. Today no one transplants as it is too costly, having to pay a female worker Rs450 a day and provide, morning and afternoon tea and cakes in addition to lunch. I can attest to that as it cost me Rs 4,000 per acre for this a few months ago.
In Japan all farmers transplant, and they work their own small acreages with no hired labor, but use transplanting machines for the task. Admittedly their cost of production is high and rice is subsidized, but they definitely maximize yield per acre as they are short of land. There are no such machines even in the marketplace, presumably either because it is too expensive, lack of demand or sheer ignorance.
The policies must take account of all stakeholders in food production, be they the traditional one of tea, rubber, coconut and paddy or vegetables, fruits and spices. The tragedy is that there has been a strong demand for all our produce all over the world as the quality is generally very good, though the quantities available remain small.
There is one area we should not even attempt to get into, namely that of bulk exports of any item, because our units of production are small and therefore economies of scale required for efficiencies to compete in that scale in the world markets are not present.
An Australian farmer with a thousand acres of lentils can produce that at a far lower cost than the Indian farmer, and that is why all our dhal comes from Australia and not India, which is just next-door.
I am one of the most inefficient farmers in the land, as I am trying to grow too many different crops, in a very tiny extent of land, using paid labor. The only reason I am able to survive is that I sell my produce direct to the consumer and try use the minimum of chemicals, especially herbicides and pesticides. Unfortunately I do not get adequately compensated for my produce as the consumer is not willing to pay the premium associated with a considerable reduction in yield and a much increased cost of production. Moreover the quantities I produce are too small and erratic to warrant being a supplier for export markets in the Maldives or the Middle East.
What my venture has taught me, by experience and evaluation, is that large tracts of efficiently mechanized monoculture units can yield a greater profit if the markets for the produce are clearly defined and supplied. However this requires labor that must be properly managed and compensated in a way to maximize yield. Scientific techniques, hybrid seeds, and a mixture of organic and chemical fertilizer should then be used.
While I am an advocate of organic agriculture, it is not practical in the present context as far as producing for the local -market is concerned as it is currently constituted.
The other type of farmer who is able to sustain themselves is one who has a small amount of land, less than 5 acres which he works on and sells his produce directly at the local pola, or to a wholesaler if some items are in too large a quantity for that. A small family can live quite comfortable on this basis. It is however a different picture for those who use paid labor and cultivate small extents as in 5 to 25 acres.
The problems then are the management of labor, to get the maximum, the lack of work ethic and productivity of our labor. The expectations of pay scale out of proportion to their productivity, and the set scales, irrespective of the ability of the individual. This model is not economical as the price the farmer receives for his produce is variable and cannot be counted in until the product is sold.
Those who advocate guaranteed buyback schemes for these farmers and pre agreed costs, must realize, that farmers will only sell when the market price is less, and will sell outside if higher, resulting in the guarantee being merely a floor price. I personally know many farmer who have abandoned this method, on the grounds that labor and other input costs, like urea being Rs4000 for a 50kg sack, are just too high. This abandonment will raise the price of labor-intensive crops.
There are so many different stakeholders in the food chain pulling in different directions, and how the orchestra is played to increase the performance is the key to satisfying all parties.
I buy onions to sell in my shop and to deliver to my customers. This week, the cost of the large onions went up 20% and small onions by 50%. I do not know if this price rise has been created artificially by the traders or due to very real supply and demand balancing. The fact that it happened within a period of a week, seems to suggest it is created by the traders, as these are all imported items, and a delayed shipment can affect the market, especially if importing is done by one or two parties only.
Big onions are only produced in August and September, and in that period the government plays God by imposing a duty on imports, but I have seen the price vary from Rs 25 a kilo to 75 a kilo just in this short period.
State attempts at imposing price stability through Sathosa have not been successful and price controls on food just does not work as the supplier can just withhold supply and a black market is then created.
Using normal market forces, floor prices, and access to delivery points, post harvest storage methods and streamlining transport to minimize costs are all ways to increase the farmers income whilst at the same time giving the consumer the best value.
It can be argued that this is exactly what the Food City chain with their 100 outlets is attempting to do. They are taking advantage of their requirements, to tie up farmers to produce for them, guaranteeing them price stability whilst improving on their post harvest wastage and distribution techniques to keep their prices reasonable for the consumer.
A sound agricultural policy must address all these issues as it has to be congruent with the ground realities and not set in isolation. The increased cost of labor has been created by the migration to the middle east as well as the war effort that has sucked in large numbers, leaving a dearth of people in the agricultural areas. This problem is set to get worse, and we have to address this before it happens, with use of mechanization and land policies that will enable more efficient use of land available for larger scale agriculture.
Mahaweli tracts were given to people who had never farmed. Some cut the trees and left the land fallow and failed to pay the annual lease. Others simply abandoned the projects as they made gross miscalculations about harvest and yields as well as costs of production. This has been a constant issue since the 1920s and people are making the same mistakes.
One only has to travel overseas to see how mechanized agriculture is. Land policies prevent blocking and selling property and carving it up to build homes, thereby preserving the agricultural use. Most non farm populations live in apartments. In Sri Lanka, the government allocates state lands to people on political patronage, who build homes and then commute hours to their non-agricultural work place, such as a security guard position in Colombo.
As an expert recently told me, that unlike other countries that have regions where certain crops grow and where there are plantations of monoculture obtaining maximum yields, we have a climate where almost everything grows everywhere. We therefore have never learned the art of specialization to maximize output, which have contributed to the low productivity.
In today’s papers there was an article about the plight of the clove farmers who cannot make a profit, despite the record high price of cloves. The reason cited was the huge cost for skilled labor per kg of cloves harvested. Here again, the low productivity of labor is the issue and the increase in the labor cost exceeding the increase I the price of cloves. They have to therefore find more cost effective means by using a combination of mechanized and more productive methods of harvesting.
One can therefore see how all these factors contribute to the present malaise. To get to grips with the issue, the factors mentioned have all to be addressed and not in isolation, as has tended to be the case.
We can with a few innovative and novel policies increase the agricultural output significantly, reduce our dependance on imported foodstuffs by substituting alternatives, and sucking the excess production out to exports as necessary and get a handle on this grossly underperforming sector without further delay.
If we do not do it now, it will be too late, and we will regress, having to buy ever more expensive food just to satisfy our consumption patterns.