Rural Development:

Vital component of the economy

Dr. C.S. WEERARATNA

In Sri Lanka, nearly 80 per cent of the population live in rural areas Hence, any attempt to develop the economy of the country need to take cognizance of the rural sector. The main source of income of nearly 90 per cent of the rural population is agriculture and animal husbandry.

They cultivate around 2 million small holdings with an average holding size of approximately 1 hectare. Almost all the food crops such as cereals, legumes, field crops, fruits, and livestock produced in the country, valued at around Rs. 100 billion, come from the rural sector.

Poverty is widespread in the rural areas. Around 30 per cent of the people are below poverty line and about 80% of the total households in poverty in Sri Lanka are in the rural areas. Poverty is relatively more in Uva, Northwestern, Sabaragamuwa, and North and Northeast provinces.

Since Independence, the successive governments, having realised the importance of the rural sector, implemented many programmes to develop this sector. However, this sector has not developed appreciably during the last few decades.

Developing the rural sector

The last UNF Government, attempting to take the country out of the present economic crisis, began to implement an economic development programme called “Regaining Sri Lanka”.

One of the main objectives of Regaining Sri Lanka (RSL) programme was Poverty Reduction, and its strategy was to promote rural to urban migration. Thus, the main emphasis of the UNF Government was to reduce the rural sector, instead of promoting its development

President Mahinda Rajapaksa who hails from a rural area in the deep South, correctly identified the need to develop the rural sector, and in his Mahinda Chintanaya (MC), proposed many programmes/strategies to achieve this objective. Among these strategies is increasing crop production in the country.

Increasing crop production will have a significant positive impact on the rural sector. It will increase the income of farmers and also improve food security. A major factor to be reckoned in promoting crop production is to keep costs per unit of the produce as low as possible.

This will enable more farmers to invest in crop production, people to purchase food at a cheaper price thus reducing COL, and also to compete in the world market in the case of export crops. The cost of production of crops has increased considerably during the last few years due to a number of factors such as the rise in crude oil prices.

Fertiliser Costs

Among the costly inputs in crop production are inorganic fertilisers. Urea, one of the commonly used fertilizer which was around Rs. 30,000 per ton in 2005, has gone up to almost Rs. 100,000.

The prices of Triple Superphosphate (TSP) and Muriate of Potash (MOP) also have gone up from around Rs. 30,000 per ton to around Rs, 120,000 per ton. In spite of high costs of inorganic fertilizers it is extremely creditable that the present government, instructed by President Rajapaksa, who has understood the need to promote the rural sector, is providing fertilizers at Rs 350.00 per 50 kg when the actual cost is around Rs. 6,000.

Seeds and planting material: Availability of good quality seeds and planting materials is one of the basic factors in obtaining a good harvest and hence is of paramount importance if our farming population is going to continue with their main, perhaps the only, livelihood.

President Rajapaksa realised the importance of good seeds and planting material in crop production and hence in the MC proposed to promote seed production locally by development of seed production farms.

This will have a positive impact on reducing costs and also increasing production. However, there appears to be no significant improvement in producing seeds and planting material locally, perhaps due to non-implementation of appropriate effective programmes by the concerned institutions.

Even at present, seeds and planting materials of a number of crop varieties such as potato and some vegetables are being imported.

This practice tends to increase the cost of production and also may result in crop failures due to their low viability etc. There are good chances of various diseases getting introduced into the country when seeds are imported without adequate quarantine measures.

Organic Fertiliser

In 1993, around Rs. 3100 million worth of Inorganic fertiliser have been imported to Sri Lanka. In 2000, this amount increased to Rs. 10,900 millions. In 2008, this value will be around Rs. 40,000 million. Application of organic fertilisers will reduce this costs and tend to increase yields.

Hence, President Rajapaksa in his MC proposed to promote use of organic fertilizers too. In the budget of 2007, President Rajapaksa allocated Rs. 300 million to promote the use of organic fertilisers. However, there appears to be little progress in the use of organic fertilisers, again attributable to ineffective programmes implemented by the relevant Government institutions.

Insufficient labour availability during land preparation and harvesting is a factor which tends to affect crop production to a great extent. President Rajapaksa in the MC proposed to make available small machines such as two-wheel tractors and other agricultural equipment duty free which benefited the farmers to a great extent and hence the rural sector.

Shortage of water: Insufficient water for crop production is one of the factors which limit crop production in the dry zone during Yala season.

Although thousands of irrigation tanks are found in the dry zone, most of them have silted up and supply little or no water.

The proposal of President Mahinda Rajapaksa to implement multi-purpose irrigation schemes would develop the rural sector in the dry zone to a considerable extent.

For example, the Moragahakanda Development Project in north-central Sri Lanka, started in January 2007, is a multipurpose water resources development scheme.

This scheme will provide increased water supplies to about 81,500 ha of drought-prone areas in the Northern and Central parts of Sri Lanka resulting in increasing crop production and thereby alleviating rural poverty. A number of similar irrigation projects such as Uma Oya, Manik Ganga have been started.

One of the main factors attributable to the declining production in the agricultural sector is soil degradation causing a decrease in the productivity of land. Soil losses in some areas have been estimated to be around 50 tons/hectare per year. As a result, the valuable top soil in many areas is lost.

Hydropower

Most of these degraded lands are in the Central, Sabaragamuwa and Uva provinces and constitute most of the central highlands of Sri Lanka where the upper drainage basins of most of the rivers and all major hydropower catchments are located.

The sustenance of water resource development and power generating projects that have been undertaken in the country depend to a great extent on the country’s major river systems.

Recent press reports indicate that the capacity of the Polgolla reservoir has decreased due to silting, caused by soil erosion. It is a common site to see the banks of Mahaweli and other rivers cultivated with annual crops which promote soil erosion.

President Mahinda Rajapaksa very appropriately realized this situation and proposed a “Haritha Piyasa” programme aimed at reducing soil degradation. It is necessary that the Ministry of Environment implements appropriate projects in this regard.

Agro-Industries: A large number of crops cultivated in Sri Lanka have considerable potential in various agro-industries, and development of agro-industries in Sri Lanka will provide more employment opportunities.

However, at present only rubber, coconut and a few fruit crops are used in industries. The industrial potential of many other crops such as cassava, horticultural and floricultural crops, fibre crops (banana, pineapple and jute) medicinal herbs, etc presently cultivated in Sri Lanka are not adequately exploited. President Mahinda Rajapaksa having recognized this need allocated Rs. 500 million in the budget of 2009.

This will have a tremendous impact on the rural sector if the relevant ministries implement appropriate programmes.

Effective marketing of agricultural produce is an important aspect in crop production cycle. However, most of the farmers were finding it difficult to dispose their produce at a reasonable price.

Progressive

The Paddy Marketing Board which could have played an important role is non-functioning and a large number of stores and mills worth a few billion rupees remain closed. It is an extremely a progressive move of MC to re-establish Paddy marketing Board and promote purchasing of paddy at a price profitable to the farmers. These progressive proposals have enabled the farmers to sell their produce at a reasonable price thus promoting rural development.

Plantation Sector: The Plantation crops viz. tea, rubber, coconut, sugarcane, and the so called minor export crops such as cinnamon, cardamom, cocoa etc. which are cultivated in varying extents of land contribute nearly 3.0 per cent of the GDP and employs around 750,000 people.

The total annual foreign exchange earned by this sector is in the region of Rs 140 billion i.e around 20 per cent of the total export earnings and 84 per cent of the total agri exports.

Smallholders play a very important role in plantation crops production. President Mahinda Rajapaksa having realised the importance of this sector in rural development made a number of proposals in MC to increase the productivity of tea, rubber, coconut and sugarcane smallholdings which will improve the rural sector to a considerable extent.

The present financial crisis in many countries has affected tea sales in Sri Lanka. However, timely intervention by the President has averted a crisis which would have seriously repercussions on the tea smallholders.

It is fervently hoped that those in the relevant ministries and the Government departments in the public sector and the private sector actively assist the President’s efforts to increase the productivity of the rural sector which plays a very significant role in the development of the country.

(The writer is Chairman, Sugarcane Research Board)