Photo courtesy of BBC
Today is World Food Day
A food shortage brewing for several weeks, coupled with a stagnant economy and indecision, has pushed Sri Lanka to the brink of a crippling crisis.
It is ironic that Sri Lanka, which was known as the Granary of the East in the ancient times, will go into the history as a country that faced a food crisis. A food crisis (widespread scarcity of food) is caused by a disruption at the production level and/or in the movement of food from farm to the plate. Literature claims that such a disruption in the food chain is caused by either natural factors or manmade factors or both. Natural factors include the after effects of flood, cyclone, storms or droughts caused due to deficiency or abundance of rainfall, earthquakes and landslides. Such natural calamities lead to crop failure and agricultural degradation. Population imbalance is also a factor. Wild elephants whose habitats were encroached on have joined the natural causes in destroying crops and food storage places.
Man-made factors are inefficient agricultural processes, incorrect agriculture practices and denial of inputs, credit and extension facilities and technology that causes crop failure. Contamination of water bodies and air hampers the crop production. Lack of proper storage, transportation and marketing facilities and improper packing lead to large scale losses of harvested crops.
Sri Lanka has added ‘government’s bad policy decisions and interventions’ as the third factor. Those who are involved in the food chain such as the farmer, trader, processor, mover and the consumer have named the government as the perpetrator rather than the reliever or the regulator. Those who are outside the food chain, especially the opposition which thinks its role is merely opposing anything, have joined the bandwagon.
Sri Lanka has not had a properly laid down agriculture policy since independence. There was no direction, road map, adequate resources, the right technology, right raw materials, inputs with a policy and a program. Our agriculture sector is disorganized and disarrayed. It spans across an array of different actors moving from peasant to commercial farmer. Our agriculture value chain is unique. In addition to passing through varying actors from farmer to the end consumer, it involves the President, Ministers and officials as well. The value chain is so fragmented that value chain links are scattered and piled up in isolated places. Actors involved in pre-harvest operations and post-harvest operations work in isolation of each other.
Different ministers in charge of agriculture, trade, consumer protection and fuel are clowns in the drama performed before the farmer, consumer and the general public. They make incoherent, contradictory statements to absolve themselves individually. They forget the statement made yesterday and make a completely different one today. Farmers and consumers are flabbergasted, entertained and finally confused and annoyed.
To add to the fun and the confusion, the government has made false moves one after the other. The step taken to correct a false step is faultier, proving the saying, “The remedy is worse than the malady”. Restrictions on imports were initiated with banning turmeric imports and burning turmeric stocks already imported. An item that was not treated as essential was made a scarce essential commodity. Prices soar at an unbelievable pace. To correct the situation, the government instructed departments, research and promotional agencies to promote turmeric cultivation. The responsibility of these agencies does not go beyond the perimeters of the cultivation plot. They advised, provided incentives and expanded land under turmeric cultivation. There were photographs of wayside sellers with large stocks of perishable turmeric bargaining with motorists to dispose of their stocks.
As prices of basic commodities rose, the public grew restless earlier this year. The Trade Minister announced that imposing price controls and rationing for 27 essential food items was on the cards. Traders panicked and the goods disappeared from the market creating a shortage of several staples. On August 30, President invoked the Public Security Ordinance (PSO) to stop disruption of essential goods and services and appointed a retired army official as Essential Services Commissioner on the top of Consumer Affairs Authority. Neither they nor the government distinguishes hoarding (retaining things in anticipation of a price fluctuation) from storage (retaining things for future consumption) and stock piling (retaining things to release to markets according to changes in demand). This disrupted the purchase of paddy and vegetable, milling and processing and the availability.
The measures taken by the government to ensure availability of food at an affordable price had several lapses. First of all, whether they were taken after a consultative process with actors in the food chain and the expertise is questionable. Documentary or circumstantial evidence for that is absent. Second, frequent momentarily changes and contradictory statements by the same minister and different ministers to justify the decision pointed to absence of a clear objective, coordination and the consistency. Third, intentions of some measures taken were dubious. Declared intention of invoking the PSO was strict controls on the supply of essential goods and preventing traders hoarding food items and controlling inflation. But people questioned whether this was to combat rising protests and trade union actions related to the food crisis. The contradictory statements made by different ministers and agencies displayed lack of coordination within the government apparatus. The confusion and suspicion led to panic buying, hoarding and escalation of prices, aggravating the food crisis.
On April 29, President announced that Sri Lanka would transform agriculture from chemical fertilizers to organic substitutes. The advice of experts and practitioners in agriculture was not sought. Conversion to organic agriculture has to be done in a systematic, scientific manner based on research and lesson learning rather than being rhetoric and emotional. The end result is the farmers have come off the field onto the highways.
What do we do to overcome the current food crisis? First and foremost is regaining the lost confidence and the credibility of the government. The sequence of events spelt out demonstrates the inconsistency in government behavior. Neither those within the government nor outside are certain of what will happen tomorrow. The government must have one voice to the outside world.
Some economists find the answer in relaxation of import restrictions. But there are essential imports that would ensure food security. The government has to assess periodical requirements as well as shortages of food items and let the private sector import the required amounts. The government should wash its hands of controlling prices. Government responsibility to ensure availability and affordability would not cease with it. It must regulate the production, processing and marketing.
It is necessary to move towards organic agriculture with a clearly laid down roadmap on the advice of competent professional experts. Until such time that the farmer, the soil and the seed are ready to accept the organic substance, the government should allow import and use of non organic material on a gradual declining process.
Steps should be taken to convert and upgrade current subsistence agriculture to a profit making agribusiness. There are research institutions for each crop in Sri Lanka. Many universities have faculties of agriculture, crop science and molecular biology. But, we have the lowest productivity in many crops if not all. Arrangements have to be made to promote agriculture technology and more importantly transfer that knowledge to the farmer. Out grower systems should be promoted with private sector. Lessons can be learned from the poultry industry on out grower system. No government can control both the price and the availability at the same time. The present food crisis is an issue with the availability than the price. Hence, the measures taken should be tilted towards ensuring availability.
Ministers and policy makers point the finger at the middlemen for food crisis. They promote involvement of government apparatus such as CWE, the Cooperative System and the Paddy Marketing Board (PMB) to replace the middleman. True, they were created to break the middlemen. But it is no secret that these organizations are inactive, inefficient and corrupt and are unable to deliver the expectations. Take PMB. It purchases paddy only with less than 14% moisture content. The farmer has to bring his yield to PMB stores incurring a cost on handling and transport whereas the private miller goes to the field and purchases the entire stock of harvest disregarding the moisture content at a price higher than the guaranteed price, for ready cash. He is equipped with transport, storage, milling and processing facilities. The government must reduce irregularities and allow private millers to ensure food from farm to the plate. One other available measure that was not considered by any government is strengthening producer associations to give more bargaining power. Theory says the consumer is the king in the market. But in Sri Lanka the consumer is voiceless.
The present and past governments have not exploited the full potential available for livestock development and fishery development. Import of highbred cattle has been treated as the answer for dairy development. But it is costly, draining out foreign exchange and completely unsuccessful. The small scale cattle rarer does not have the knowhow, appropriate sheds, cattle feed and access to extension facilities. He will end up as a debtor with the imported cow that will ultimately attract the butcher. Highbred cattle can be imported for breeding purposes. But action has to be taken to improve the local cattle stock.
Every government has attached priority to the welfare of the fishing community. There are more employees than fishermen with several agencies to promote fishing industry. But little action was taken to improve the fishing as an industry with the value addition. At night there are thousands of small boats crossing the international naval route disturbing commercial cargo vessels. The next morning, if they survive, they have to bargain hard to get an additional rupee for their catch.
In Sri Lanka there are businessmen but no entrepreneurs. Businessmen make profits on speculation. This causes scarcity and price hikes in an imperfect market. The government has to intervene and regulate to close avenues for speculation. What we experience is the government makes rash decisions based on wrong reasons, creating a food crisis. Next day it withdraws the decision. By that time the damage is done. It is therefore necessary that the government takes the most appropriate decision in consultation with experts. That would ensure the consistency, minimize confusion, leave no room for speculation and avoid embarrassment of revoking the decision. There are laws and institutional arrangements to monitor hoarding and price rises and food shortages. The government should use them and intervene to ensure transparency and build up confidence. Government decisions and actions should be transparent and with clear intentions and be absent of favoritism and discrimination.
The government with ministers who speak eloquently with empty words and no action have no time to be patient and address issues. From this analysis it is clear that the food crisis emerged from lack of food for thought.
Chandrasena Maliyadde is currently a Vice President of Sri Lanka Economic Association.