The Government of Sri Lanka has introduced a number of policies and programs to increase paddy production since independence. The fertilizer subsidy program is one of the longest-lasting, most expensive, and most politically sensitive policies implemented to promote rice cultivation in Sri Lanka. It was initiated in 1962 (that is, at the onset of the Green Revolution) with the main objective of encouraging farmers to switch from traditional rice varieties to high-yielding varieties (HYVs) that are highly responsive to chemical fertilizers. Since then, however, the provision of the subsidy has become customary, and successive governments have been under tremendous pressure to continue the subsidy despite budgetary constraints.
Environmentalists have initiated discussions in the public media of the pollution of waterways by heavy metals, such as cadmium, caused by application of inorganic fertilizer. They also argue that accumulation of cadmium in water bodies as well as in plant and animal tissues have led to increased prevalence of chronic renal failures. Incidence of contamination of food chain by heavy use of agro-chemicals and resulting diseases are as unsettling. In 2000, seven of 12 drinking water schemes in Kalpitiya peninsula in Colombo, funded by the Asian Development Bank, had to shut due to high nitrates found in the shallow aquifers.
As paddy cultivation provides livelihood opportunities for more than 1.8 million farmers in the country, the government has been under constant pressure to continue the fertilizer subsidy. Any significant deviation from the status quo could damage the political power base of the ruling party. In 2005, a political slogan became policy when the government announced the ambitious Mahinda Chinthana (President Mahinda Rajapaksa’s vision), which pushed development across all sectors of the economy. In agriculture this meant raising productivity by providing fertiliser at a tenth of its commercial cost—350 Sri Lankan Rupees (LKR; 1 LKR=Rs 0.4) per 50 kg bag, with a maximum of three bags per acre (0.4 ha) of paddy. Fertiliser subsidies bleed the exchequer. In December 2010, the fertiliser import bill increased 119.4 per cent, for which the government paid a bruising LKR 30 billion. Tracts of land are being brought under cultivation in the north and east provinces following the end of hostilities. The government recently announced a partial subsidy for coconut farmers. The new Divi Neguma scheme to promote vegetable home gardens will hand out hybrid seeds and subsidised fertiliser packets to one million households in the country.
Despite this cost that will be absorbed by the treasury, the National Fertilizer Secretariat says there is still a shortfall of 272,000 tonnes of fertiliser to meet the demand. Meanwhile, agro-chemical use is only set to grow with rising food prices. The price of rice has gone up 200 per cent over 2007-08 prices. Vegetable prices have skyrocketed, with reports suggesting the army has plans to directly sell vegetables at fixed prices. The recent floods that wiped out about one million hectare of cropland have compounded the situation. For now at least, the country’s dependence on agrochemicals and its worries over resulting diseases are here to stay.