Spotlight: Econ Op-eds in Summary (Week ended 30th June '21)

Snapshots

1. Composting tea cultivations: The Good, the Bad, and the Ugly

By: Dr. W.A Wijewardena

• The government recently made a decision to ban the importation of chemical fertilizer and pesticides in favour of organic fertilizer. This has been done without understanding the challenges created by such a switch. For example, the use of organic fertilizer results in lower yield than chemical fertilizer in the planting of tea and results in a shorter lifespan of a tea bush.

• In June, the TRI issued guidelines for the use of compost in tea cultivations, however, the use of compost outlined is significantly more costly than a tea planter producing their own compost. Compost bought from the market also face transportation, quality and supply issues, among other problems. This brings about the need for a different system for the use of compost. However, doing this would mean that tea is unable to be sold under an organic brand.

• Although component costs are high, organic tea can be sold at a much higher price than its non-organic counterpart. However, the loss in output and higher costs counteract the impact of the higher price, and a government subsidy would be required to sustain production. Given this, the TRI needs to assess the costs of the use of organic fertilizer to ensure a cohesive policy shift.

For the full article – Refer Daily FT

2. Hunger and starvation amidst a multiplicity of economic problems

By Nimal Sanderatne

• Covid – 19 pandemic accelerated poverty around the world and especially in developing countries. Even in Sri Lanka, most industries related to tourism came to a standstill. Most sectors in Sri Lanka have reduced staff, and those who were able to secure their employment are facing salary cuts. Self-employed people are finding it extremely difficult to make a living with the continuous lockdowns.

• The least affected sector from the pandemic is agriculture, despite which the recent government policies have not been quite favorable towards agriculture. Farmers are expecting a huge reduction in harvest in upcoming months. Already troubled public has no other option than to expect future consumer price increases as well as further import restrictions on essentials.

• The loss of income, rising poverty, starvation and the level of unemployment is too huge for the government of Sri Lanka to handle with its limited financial capacity and administrative capacity. This further obstructs the government from taking adequate measures. This leaves the government with only the option of seeking foreign assistance with immediate effect.

For the full article – Refer The Sunday Times

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