Contribution of agricultural sector for economic growth

BY CHANDRASIRI Nanayakkara

THE Central Bank's (CB) annual report for year 2004 revealed that the country's overall growth rate was 5.4 per cent and the contribution of agricultural sector for which was negative 0.7 per cent and share for GDP was 17.9 per cent (Daily News, April 30, 2005).

The reasons given are drought and floods and 'several factors'. What are those unmentioned 'several factors'? Blaming the nature (floods and droughts) is an easy excuse and escape and present day habit because neither the CB nor any other organisation has done a valid estimate of the nature's damage. In actual situation and to the farmer 90 per cent of the retardation was due to 'several factors'.

To make contribution of agriculture positive and because any natural disaster is beyond the control of farmer and what he expects from the government is to clear the 'several factor' constraints.

This is an attempt to indicate those constraints for the attention of the government and a large number of departments, boards and corporations surviving because of our poor farmers.

The Census and Statistics Department in its handbook says the total population in year 2001 was 16,864 million, out of which over 80 per cent are in the rural sector engaged in some form of agriculture.

They may be the paddy farmers, tea, rubber and coconut smallholders, fruits and vegetable growers, cultivators of export agricultural crops (pepper, betel, cinnamon and cloves etc.) and many more scattered in rural areas.

Hence this is a serious situation to consider and rectify because at national level their contribution to country's economic growth is negative and their incomes are reducing from agriculture. To compensate they sell their labour (human resource) to Middle East.

In rural population, 50 per cent are below poverty level needs heavy expenditure for government on relief measures. The decreasing local production needs ever increasing food imports which drains heavy foreign exchange for an island labelled as an 'agricultural country'.

What the growth indicators implied are that the agricultural sector is not only deteriorating but facing a high imbalance because about 80 per cent of the population contributes 17.9 per cent to GDP with reducing income and savings. A good proof for this is the massive pawning of jewellery in banks to celebrate the last April New Year.

In contrast how many foreign funded long-term growth oriented projets were implemented in the sector during past three decades? Among them the projects of Mahaweli, Kirindi Oya, Integrated Rural Development of districts, Dry Zone Agriculture Development and Minor and Major Tank Irrigation Rehabilitation are a few to mention. Now they are in benefit generation phase but the impacts are not significant as expected.

There are more than fifteen negative factors through which a farmer suffers and debar their maximum contribution for the production and contribution to the sector.

i. High cost of market inputs: The cultivation of any crop need a lot of inputs to purchase from the market place.

They are machine power to plough, thresh and transport, weedicide to control weeds in the field, pesticides to destroy crop damaging insects, artificial fertilisers to get at least a threshold yield, high cost of imported hybrid seeds, implements to work, pumps and irrigation systems, green houses for intensive crops and so on.

The rate of increase of prices of those goods and services are very much higher than the rate of increase of prices received for various agricultural produce at the farm gate or market place.

The farmer is a 'price taker' both in buying and selling ends and squeezed between increasing costs and decreasing incomes.

ii. Risks and uncertainty: Most of our crops are seasonal and rain fed based on Yala and Maha seasons. In horticulture local fruits are flooded to the market twice a year in months of April-May and November-December periods.

No one especially the farmer knows the demand, the supply needed and the price formation of a produce. The risk of floods, droughts, pest and disease attacks are not unusual to reduce crop yields.

iii. Unavailability and high cost of labour: Today it is very difficult to find skilled workers for field activities and those available are unskilled. Not only the young generations are shy to work in agriculture but also they discourage their parents to engage as agricultural workers though they are poor.

For example in coconut sector there is a severe dearth of climbers, huskers and the rubber sector is affected by lack of skilled tappers. Even if one finds workers they demand high wages that the farmer cannot afford.

iv. Low productivity of available labour: The productivity of available agricultural labour is poor. If the labour force is dispersedly engaged in a commercial farm it is difficult to supervise them. If a target is given the quality of work is lowered to complete the task quickly and it applies to contract work too.

The attendance of workers is not regular thus one cannot have a planned set of activities to complete in time. The nutritional states of farm workers are poor and their drinking habits and addiction to it lowered their strength to perform well in the field.

v. Deteriorating (man made) environmental conditions: The fertility of agricultural soils is deteriorating day by day due to poor management of it. Lack of soil and moisture conservation measures, misuse of agro-chemicals and overuse of artificial fertilisers and neglect of using green manures and compost have lead to this situation. Most of our soils are sick or dead and lack soil beneficial microbes and other organisms like earth worms.

The soils become very hard a few days after rain. The water absorption and retention capacity is poor due to low organic contents and hence run off percentage of rain is high and intensive causing surface erosion of reach top soil.

vi. Inefficient govt. extension service: An Indian technician working in our fields has made a good remark to me. "Your officers in agriculture know theory very well and work inside office rooms but we know how to apply the theory well in the field because most of the time we are with the farmer in their crop fields."

The agricultural extension officers employed to advise and solve field problems of farmer and time devoted with them are very much beyond the needs. Most young officers are not confident to handle a field problem. The agricultural diploma courses offered by technical colleges are without field practicals and farmer contacts.

vii. Most ignored sector and inability of the institutions to cater the end needs: The sector is full of govt. institutions with large staff strengths to cater to farmer. The old ones such as Paddy Marketing Board and Marketing Department are disappearing and new institutions such as Post Harvest Technology Institute are appearing.

The officers' monthly programmes of active institutions are full of meetings with higher officers and politicians, devote more time understand circulars and to fill data forms for exaggerated progress reports and no time to work in the field or to attend to a farmer who reached to his office. Restricted allocations for travelling and misuse of allocated facilities are two other constraints.

viii. Poor marketing facilities: The daily newspapers are full of rural news items as follows: In Polonnaruwa the highest paddy producing area farmers are worrying because they cannot sell their paddy at a reasonable price. In Puttalam (Neelabemma) farmers are waiting to sell their bumper big onion harvest but no buyers.

The farmers in Matale cannot sell their tomato for more than six rupees a kilo and income is just enough to pay the transport cost. In Moneragala the lime is allowed to fall because the price is not sufficient to pay the cost of harvest. In Kuliyapitiya farmers throw their betel after waiting hours because no mudalali to buy.

Fruits such as banana, mango, pineapple and papaya etc. have no market during the rainy days or glut seasons. The farmer sell their quality fruits at very low price and when there is a demand in off seasons the unripe artificially ripened fruits come to the market diverting the consumer to imported fruits.

Though various departments are there to teach 'how to grow' but not a single organisation to facilitate 'how to sell'.

ix. Exploitation of middle man: The middle man exploits heavily. They use under weights deduct percentage for various reasons and do not pay at once and keep a balance so that the farmer trapped with him for continuous supply.

Mudalalies and their catchers, village collectors and middle men always condemn the produce and demoralise the farmer before fixing a price.

x. Competition with imports: Our farmers grow what they have received from the Agriculture Department. For example the department nurseries promote wood apple / orange grafts. Its fruits (oranges) are with rough, thick and green coloured skin and full of seeds with high content of offal.

How could the local oranges compete with imported ones which are attractive in colour, size and softness and are seedless? It is same with the imported green gram from Australia, tomato juice from Iran for souse industry and other substitutes such as apples, grapes, mandarin and even guava.

xi. Post harvest losses: Post-harvest losses in fruit and vegetables are very high. Due to piece rate of transport to markets farmers are compelled to pack their harvested vegetables tightly in bags. Transporting the produce from field to collector, to wholesale buyer and seller and to retailer in tractors and trucks, cause lot of damage to it and are not visible.

This reduced the shelf life and it is estimated about 40 per cent is wasted. In compensating this one can see a 50 per cent price difference in selling price of farmer, in growing areas and consumer buying price in cities.

Now all the local fruits are excessively carbide treated for quick ripening. They do not give the real taste of a particular fruit. Most of the customers shift from local fruits to imported fresh or canned fruits because of this. It is very sad to see the canned 'warka' (ripe jak fruit) from Malaysia in our supermarkets while our jak fruits are wasted at the tree no processing industry absorb the crop.

xii. Poor contribution of research: The contribution of various research institutes are not focused to farmers problems or their recommendations are not practicable. The farmers' problems should be identified by the field extension officer and directed to researcher to conduct research to find solutions.

Tested solutions must go back to the farmer through extension officer through field days and training classes to rectify the farmer problems. The extension officer should act as a bridge between farmer and researcher. Is this happening today?

xiii. Consumer preference for imported produce: The consumer prefers green gram imported from Australia instead of local green gram, or the urban consumer prefers sunflower, soya or corn oil instead of coconut oil. The consumer preference is diverted to attractively packed highly advertised imported cereals to yams and local pulses. Thanks to free economy!

xiv. Changing food habits: Changing food habits mainly based on wheat flower and Chinese foods reduce the demand for local vegetables. The most natural drink of thambili reduced its market share among rich class and young generation to carbonated and addicting but repeatedly advertising chilled drinks.

xv. Not enough processing activities to absorb the seasonal gluts: The natural fruit based tippings, snacks and salads are very much better than sugar coated junks and ice creams. No investors to start fruit leather, dried fruits, fruit cubes and fried chips but only cordials and jams and are lagged behind in market place to artificial 'soft drinks'.

Then one can ask the question "why farmers engage in agriculture if it is not viable and profitable?" The answer is that there is no other alternative for them to engage in rural areas.

To correct these shortcomings are not easy for a country. It needs a vision, the political will, long term plans and heavy investments and the dedicated service of officials to bring back to positive growth of agriculture.

(The writer was Marketing and Enterprise Development Consultant NWP Dry Zone Participatory Development Project)