Spotlight: Econ Op-eds in Summary (Week ended 27th October '21)

Snapshots

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select market segments to only be supplementary to      conventional farming and the ban on chemical fertilizer must be withdrawn.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.

For the full article – Refer Daily FT – Part 1, Part 2

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.

For the full article – Refer The Daily FT

(Compiled by: Promodhya Abeysekara, Malitha Goonerathne & Mariyan Perera)