Government allocates Rs.40bn to compensate paddy farmers affected by chemical fertiliser ban

• However, Agri. Min Aluthgamage says main reason for loss of harvest was farmers’ delay in preparing paddy fields for Maha season
• Govt. allocates further Rs.29.8bn to buy paddy at guaranteed price of Rs.75 per kilo
• Says despite higher guaranteed price for farmers, price of rice will be maintained at affordable levels 

The government has decided to allocate Rs.40 billion to compensate paddy harvest losses incurred by 1.04 million farmers in the 2021/2022 Maha season due to the ban on chemical fertilisers and agrochemicals.

Agriculture Minister Mahindananda Aluthgamage on Monday sought Cabinet approval to provide compensation of Rs.25 per 1kg of paddy to restore the income level of paddy farmers affected by the government’s push towards organic agriculture. 

“We have seen 10 percent reduction in paddy harvest in some districts and 15-20 percent loss in certain other districts. However, one of the key reasons for this harvest loss was farmers’ failure to commence cultivation on time during last Maha season. 

Regardless of the kind of fertilisers used by them, the Agriculture Ministry will be directly compensating farmers after assessing their harvest losses with the support of Department of Census and Statistics and other local authorities,” the Minister told reporters in Colombo yesterday.

The Co-Cabinet Spokesperson and Plantation Minister Ramesh Pathirana last week revealed that the government has projected 20-25 percent loss in the country’s agricultural output, as a direct result of the ban on chemical fertilisers and agrochemicals.

However, Aluthgamage noted that the compensation programme, which was included in the government’s Rs.229 billion relief package would only be limited to paddy farmers at 
this stage.

“There were chemical fertilisers available in the market for others who grow maize, vegetables and so on. So, their outputs were not impacted due to the ban,” he stressed.
Sri Lanka’s paddy farmers were given chemical fertiliser free-of-charge prior to the ban. 

Despite certain paddy farmers protesting against the chemical fertiliser ban, Aluthgamage said that farmers have cultivated 800,000 hectares of paddy in line with the government’s expectations using only organic fertilisers.

Meanwhile, the Cabinet of Ministers also approved another proposal presented by Minister Aluthgamage to allocate Rs.29.8 billion to purchase paddy at a guaranteed price of Rs.75 per kilo by the District Secretaries/Government Agents through small and medium scale paddy mill owners.

The allocation of Rs.29.8 billion is to be secured through State banks.

Although the government has decided to purchase paddy at a premium price of Rs.75 which is an increase of Rs.25 compared to last year, Aluthgamage assured that the government would not allow prices of rice to increase in the market. He believes that the government would be able to maintain stable prices by securing buffer stocks through its paddy purchase programme as well as through imports.