Spotlight: Econ Op-eds in Summary (Week ended 27th October '21)
1. Organic agriculture in Sri Lanka: Are we going down the slippery slope?
By: Professor Gamini Herath
Sri Lanka banned the use of chemical fertilizer earlier this year in a bid to move toward fully organic farming. The upcoming harvesting season is under threat, with current imports of organic fertilizer being insufficient to generate sufficient crop yield.
Organically grown food may not necessarily be healthy, would generate less yield, and is more labour-intensive with farmers needing extensive effort to learn and adopt best practices for it. Raising yield requires large amounts of organic materials which are difficult to source and would only lead to higher levels of inflation and highlights the need for price competition.
To make the shift to organic fertilizer a success, organic crops must be introduced in only select market segments to only be supplementary to conventional farming and the ban on chemical fertilizer must be withdrawn. To avert a crisis, policy makers must listen to learned scientists on the matter carefully balance the tradeoffs of using organic fertilizer.
2. Amidst pandemic-induced volatility, GSP+ to EU is critical for Sri Lanka
By A. Sukumaran
The loss of GSP+ for Sri Lanka could have a significant impact on the economy and will result insignificant social and human costs. Nearly a quarter of Sri Lanka’s total exports goes to the EU. Loss of GSP+ will increase the prices of Sri Lankan goods in Europe and contribute towards possible trade shifts, resulting in cascading negative effects.
Export industries are the country’s biggest employers. During the pandemic apparel industry alone provided steady and uninterrupted employment to many. Loss of GSP+ will affect the rural vulnerable communities most and will increase income inequality. The decision by EU could affect Sri Lankan exports to UK, USA and potential markets of Japan and Australia as well.
However, Sri Lanka should not depend on the GSP+ entirely in the medium and long term. Export industry is taking many measures at present to diversify the markets. Considering Sri Lanka’s economy and low foreign reserves, the government must demonstrate clear commitment in retaining GSP+. In improving the export industry, sufficient stability and protection from economic shocks is much needed.
(Compiled by: Promodhya Abeysekara, Malitha Goonerathne & Mariyan Perera)
Disclaimer: This information has been compiled from sources believed to be reliable but Frontier Research Private Limited does not warrant its completeness or accuracy. The bullet points provided for each summarised opinion article is written by Frontier Research and has no connection to the respective author. Furthermore, the information contained in these reports/emails are confidential and should not be shared publicly. Disclosure, copying and distribution is strictly prohibited.