Contribution of agricultural sector for economic growth
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
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
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
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
Mudalalies and their catchers, village collectors and middle men
always condemn the produce and demoralise the farmer before fixing a
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
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
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
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
(The writer was Marketing and Enterprise Development Consultant NWP
Dry Zone Participatory Development Project)