Govt encourages public/private sectors in agriculture:

Subsidy scheme increases demand for fertilizer

Charumini de Silva

The demand for fertilizer has increased rapidly due to the Government's subsidy scheme. The Government is encouraging the public and private sectors in agriculture development. The average fertilizer imports per annum are around 600,000 - 650,000 MT. However, during 2008 it grew up to 800,000 MTs, which shows that there is a big demand for fertilizer, a senior official of CIC Agri Business told Daily News Business.

He said that of the 800,000 MT fertilizer, 600,000 MT is for paddy cultivation and the remaining are for other crops. Of the 130,000 MT, 800,000 MT was for agricultural activities in the Eastern province, 25,000 MT for coconut and 135,000 MT for vegetables and fruit crops.

There has been a significant increase in the agricultural sector in the country due to the Government encouraging the public and private sectors. Uncultivated lands and introduction of different crops such as maize has made an impact on the agricultural sector and as a result the demand for fertilizer too has increased dramatically, he said.

He said there was an increase in fertilizer consumption with the opening of the Northern and the Eastern provinces. People are more keen on cultivating and therefore, there is a huge potential for growth in the Northern and Eastern provinces in the agricultural sector.

The Cost of Production (COP) for paddy cultivators is very low since the Government and agricultural institutions are heavily involved in assisting these farmers.

Paddy farmers have shown much interest in cultivation compared to other cultivators. There is also a growth in other agricultural crops.

The demand for tea dropped drastically during the global financial meltdown. Sri Lanka is now enjoying the highest prices for tea, as there is a huge demand for tea especially in the international market. Although there was a slight drop in the demand for coconuts and vegetables, at present there is an upward trend, the official said.

If the Government continues with the subsidy scheme for paddy, tea, vegetables, fruits, coconut, rubber and other crop cultivators, the demand for fertilizer will eventually grow up to 800,000 MT or even more. With the global financial trend also recovering, there is an improving trend in the agricultural sector, he said.