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ECONOMYNEXT – Sri Lanka’s tea exports which brings 1.3 billion US dollars a year could lose 40 percent of output from a fertilizer ban which will save 30 million dollars, a industry official said amid a state imposed ban on agro-chemicals.
“For tea industry in particular, the fertilizer cost is only two percent of the total earnings from the tea,” Roshan Rajadurai, Chairman, Plantation Service Group said at the Planters Association Annual General Meeting.
“If you lose that two percent means you have lost the plot.”
Rajadurai said the tea industry spends 30 million US dollars on fertilizers and pesticides and earn a minimum of 1.3 billion US dollars.
In 2019 Sri Lanka had earned 1.43 billion US dollars from tea and in 2020 despite a pandemic 1.24 billion US dollars.
For the first seven months of 2021, Sri Lanka has recorded export earnings of 766 million US dollars from tea, up 9 percent compared to pandemic hit 2020 amid good rainfall.
Sri Lanka’s tea crop may fall 40 percent in 2022, due to the fertilizer and agro-chemical ban, industry officials said.
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Sri Lanka has banned chemical fertilizer and agro-chemicals saying over 300 to 400 million dollars were spent on them each year and that agrochemicals caused non-communicable diseases.
Analysts have urged authorities to reform the central bank to constrain the ability of the Monetary Board to mis-use its independence to print money and generate external instability and block free trade instead of resorting to Mercantilism and blaming free trade.
Saving foreign exchange had become a policy priority ever since a Latin-America-style money printing central bank was set up in 1950 by a US money doctor, ending a currency board which maintained monetary stability through two World Wars and a Great Depression.
Sri Lanka’s Government Medical Officers Association, an influential policy driving body has also said according to Pliny the Elder, an Roman author, ancient resident of the islands lived for 140 years, before there were any agro-chemicals.
Sri Lanka’s policy-making process has deteriorated sharply from the time permanent secretaries were removed in a 1971 constitution and green papers, white papers to outline evidence based draft policy followed by expert and public consultation is now almost unheard of.
Instead policy is made by ad hoc midnight gazette rule and executive orders, leading to severe disruptions for economic agents and ordinary householders.
As part of an election gimmick popularized in 2004/2005 Sri Lanka’s rulers started to give heavily subsidized fertilizer for rice farming which was gradually expanded to other crops.
Critics have said cheap fertilizer had led to over-use by some farmers. (Colombo/Oct01/2021)
Source: https://economynext.com/sri-lanka-killing-us1-3bn-export-industry-to-save-us30mn-86616/
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