A large number of farmers in several provinces staged protest marches against the government’s decision to pay cash in lieu of the fertilizer they get under the subsidy scheme. From the government’s point of view the measure is aimed at giving the farmer greater option on how much of fertilizer he is going to use as excessive use has been responsible for many a health issue.
In the long run, the measure is also expected to encourage farmers to use more organic fertilizer shifting to it completely over a period of time. Thereby, greater benefits to the country were expected in the form of lessor soil and water pollution, food safety and reduced burden on the national budget.
However, farmers have been complaining that with the rising prices they would not be able to buy the required amount of fertilizer even if money is given to them and they would be better off if fertilizer is issued to them instead of money like in the past. The protestors also vehemently complained about their having to waste days in the banks facing rigid procedures to open bank accounts in order to get the cash payments.
Majority of the farmers are unhappy over the new system and their displeasure was strong enough to get them on to the streets in thousands. This shows the government and in particular the Finance Minister has failed to judge the electoral and social impact of their decision to revise the subsidy system.
They also seem to have failed to take into account that paddy cultivation is a major source of livelihood in providing more than 1.8 million people with employment opportunities in the country. Over the years, the subsidy has significantly contributed to increasing paddy production, stabilizing the milled rice price, and helped the country attain self-sufficiency in rice.
Simply reducing the fertilizer subsidy would not encourage farmers to adopt organic fertilizer. Adoption of organic fertilizer in the short run may hinder production unless farmers are compensated for possible yield reductions. Furthermore, the subsidy has become a politically sensitive issue since paddy farmers form a considerable portion of the voter base.
The budgetary measure may seem right from a technocrat’s point of view. But in reality it is an unwise move the political fallout of which would certainly be too much for the Yahapalanaya government at this juncture. Politically speaking the failure to understand this would cost them dearly whatever the good intentions behind these decisions are.