Chemical fertiliser ban could incur US $ 1bn cost on trade: study

• Estimated crop losses range between 25% to 50% across top five crops 
• Industry veteran urges to bring down ban to 50% before going fully organic in next 3-5 years

In what could be the most comprehensive study carried out to date on the cost of chemical fertiliser ban and its implications on the country’s already ailing merchandise trade deficit, the Sri Lanka Agricultural Economics Association has estimated over a billion dollar cost to the country’s trade, caused by the estimated crop losses of up to 50 percent.

According to Sri Lanka Agripreneurs’ Forum Chairman Rizvi Zaheed, who cited the study, the predicted crop losses across five key crops, which include key export commodities, domestic food staples and intermediate crops used in other industries, could force the country to foot an additional billion dollar bill by having to export less and import more. 

Accordingly, crop loss in tea is estimated at 30 percent, paddy at between 30 to 40 percent, maize at 50 percent, sugar cane at 30 percent and cinnamon at 25 percent. 

Referring to the study, he said the estimated paddy crop losses, if occurred, would require the country to spend an estimated Rs.42 billion on rice imports to make up for the shortage created in the domestic market. 

Besides, these crop losses would also deal a severe blow to farmer incomes and the rural economy, which will become a further fiscal burden on the government at a time when austerity appears to be the way forward for some time, as the pandemic weighs heavily on state revenues. 

“So, the immediate first wish is that the ban on the fertilisers to be restricted by 50 percent,” Zaheed said speaking at an online forum last week, organised by the Institute of Chartered Professional Managers of Sri Lanka, to provide a platform to some select sectors to present their wish lists for the upcoming budget.  The government completely banned import of chemical fertilisers and other agro-chemicals in an April announcement in its quest go fully organic in farming before allowing imports of certain chemical types in several rounds through import control licences. 

Last week, the two government fertiliser companies were reported to have been allowed to import carbonic fertiliser for tea, coconut, rubber and other crops.  However, Zaheed, a seasoned professional in the industry, who termed the April move as a “sharp shock”, called for some compromise before banning 100 percent chemical fertiliser immediately, which can happen in a phased-out manner in the next three to five years.