Why isn't agriculture sustaining RURAL poor?

Lionel WIJESIRI

Efforts to improve agricultural productivity in Sri Lanka relies primarily on policy changes to liberalize prices, exchange rates, and trade. Important as they are, it is increasingly clear that price changes alone are insufficient to stimulate agricultural production without supporting improvements in research, extension, and marketing.

Agricultural research, in particular, is both critically important but chronically underfunded and internal financial support for research has also declined in the past.

Observers internationally agree that investment in agricultural research has a high payoff in spite of problems in assessing its impact and the fact that rate-of-return studies tend to indicate higher returns than probably exist.

However, the Mahinda Chinthana has clearly identified this issue and with the target to transform Sri Lanka to a strategically important global knowledge hub, the government has understood that the country needs to increase its overall investment on research and development. Sri Lanka Council for Agricultural Research Policy (SLCARP), in this context, has a challenging mandate to become a center of excellence as a research coordinating body in agriculture, similar to that of the Indian Council for Agricultural Research.

Sustainable intensification

The 'National Priorities on Socio-Economic Research in Agriculture 2012 - 2016' prepared by the National Committee on Socio-Economics and Policy Analysis says:

"The rural agrarian nature of the Sri Lankan economy is characterized by more than 70 per cent of the people still living in rural areas whose main occupation is agriculture. Agriculture is the mainstay of the rural economy that employs about 32.7 percent of total employed population in the country. Rural poverty is, however, a widespread persistent phenomenon."

The report further states, "Agriculture has not been able to support the rural poor who are vulnerable to natural calamities as well as to global and localized economic strife.

The food expenditure ratio at national level had increased from 37.6 percent in 2006/2007 to 39.8 percent in 2009/2010. Food prices on the other hand continue to rise and as much as 42.3 percent of the total household income is spent on food by nearly 50 percent of the population.

This signifies the role played by the agricultural sector and poses the question whether the growth in agricultural sector has been sufficient to sustain the economic development."

"It is also to be noted that agricultural sector has hardly been competitive in the world market except for a few crops. The policy environment and the given technology make the small farmer vulnerable to sustain in a competitive trading environment. Therefore, the policy makers have to take the challenges arising from the domestic and global setting to bring the required changes to make the agricultural sector more competitive in order to achieve a higher growth rate".

The 'required changes' as indicated in the report pinpoint an important message: that the challenge for our future is national food security, which will require at least a doubling, of food production by the year 2025 to meet the needs of the growing population. It brings us to the concept of sustainable intensification. The term refers to the process of increasing agricultural yields without adverse environmental impact and without the cultivation of more land.

This concept underlines the approach required by agricultural research to strive to develop new production technologies and approaches that maximize the beneits of natural resources while protecting and restoring these resources for future use. Agricultural research must address the sustainability and competitiveness of those who depend on agriculture for their livelihood.

Over the last number of decades, our country has made some advances in the agricultural science area: for eg., increase in milk yields and increase in crop yields. Such advances would not have been possible without government investment and intervention. Further progress in the area is dependent on continued and increased investment in order to embrace the new challenges that lie ahead.

Research must provide cost effective technologies that enable agricultural production systems to expand whilst conserving scarce resources. And, there must be a broad multi-disciplinary approach to addressing these challenges.

The development of an agriculture sector which is internationally competitive is crucially important to Sri Lanka's future development. In addition, the sector must meet growing public objectives in terms of enhanced food safety, improved natural resource management, biodiversity protection, energy security and meet the demand for environmental-friendly goods and services.

Sri Lanka, although a small country, can play its part in meeting these challenges as our researchers have developed an excellent reputation internationally.

National Agenda

Whether we like it or not, agricultural research and technological improvements will continue to be prerequisites for increasing agricultural productivity and generating income for farmers and the rural work force.

This in turn will help to alleviate poverty, which is primarily a rural phenomenon. Given that economic growth is the best antidote to poverty, and that we, in Sri Lanka, have achieved economic growth without much agricultural growth, it follows that agriculture, a principal sector in our country, can contribute significantly to growth and development and should be accorded a high priority.

The subject of Research and Development is still not in tour national agenda. There is an urgent need to reverse this status, which, if left unchecked, can threaten national food security.

Economists agree that there is a critical and essential role for the government to address policy issues in agriculture research and to implement technical programmes that optimize social welfare. However, government should not view profit-driven private sector activities as detrimental to the public good because these private sector activities often are the most effective way to achieve national goals set by the government.

The collective goal must be to build partnerships that use the comparative advantages of the public and private sectors to achieve mutual goals. The government can use policy instruments to encourage and stimulate private sector investments in joint venture programmes, and a special independent committee can facilitate implementation of such collaborative programmes.

Forging these public-private sector partnerships would promote the most effective use of limited national resources for the development of sustainable agricultural systems.

In the last three decades, the governments in industrial countries have encouraged increased participation by the private sector in agricultural R and D, a trend that is now being mirrored in many developing countries. During the 1990s there has been a growing awareness, in both the public and private sectors, of the significant benefits that can be derived from such collaboration.

The significant investment of the private sector in biotechnology, perhaps more than any other single factor, has clearly demonstrated the need for and substantial advantages associated with collaboration between the public and private sectors in agricultural research and development.

Indeed, the requirement for a minimum critical mass in R and D, particularly in biotechnology, has been the major stimulus for most of the mergers and acquisitions in the private sector.

The development of biotechnology applications is capital intensive, requiring substantial long-term investments, which often can be mobilized only by the private sector. Thus, most investments in biotechnology are made by the private sector. A major challenge for both the private sector and the public sector is to find ways to collaborate in sharing and transferring appropriate new and superior technologies, which often are proprietary, from the private sector to the public sector.

It is, therefore, vital that the two major players, the public and private sectors, involved in agricultural R and D collaborate to address the important and impending challenge of national and global food security. The government must take the necessary and urgent steps to initiate the building of partnerships.

(The writer is a senior corporate Director in the private sector)