Sri Lanka food crisis: How shortage of fuel and rising prices affect entire economy

May 07, 2022

In the rice paddies east of Colombo you can see the roots of Sri Lanka's looming food crisis.

It's planting time here, coinciding with the arrival of seasonal rains that will fill the paddies, but in the fields that flank the road to Rambukkana, cultivation has barely started.

Only a handful of the plots have been planted with the pale green seedlings, the rest carry the wispy remnants of last season's crop gone to seed, or are empty, save for a soupy brown slop.

Farmers here are victims of the same problem that is afflicting the entire Sri Lankan economy, a shortage of fuel and rising prices.

As a result they can't afford, or sometimes even find, the diesel or kerosene required for tractors and rotavators to turn the soil.

Ravindra Wickramrathana is still nursing his young crop at the family home outside Rambukkana, the seedlings laid out in strips like fresh turf on the terrace regularly soaked from a pink watering can.

Standing in the middle of the four paddies on which his livelihood depends, he explains why this year's crop is threatened.

The soil in each paddy has to be turned twice before planting, a job that would take a matter of hours with a tractor but takes two days for each turn when dug by hand. That's before planting the seedlings, also by hand, a task that takes 10 men a full day.

But this year that work may not be worthwhile. After a government ban last year on imported chemical fertilisers, yields have plummeted, and his harvest is unlikely to cover the labour costs.

The ban on fertiliser imports was supposed to help preserve the country's dwindling foreign currency reserves, but the unintended consequence has been to threaten food security.

"After the fertiliser ban we were getting only 25% of the yield," Ravindra says. "We just can't get the same yield with organic fertiliser, and our labour costs more than our harvest will earn, so there is no profit."

"I can't even think about the future, the price of everything is increasing, labour costs have gone up, if we can't cover our costs how can we continue farming? We don't know how to do anything else."

What happens in Ravindra's paddies matters because farmers don't just feed their families, they feed the whole country. When yields were high they were self-sufficient at home and sold their surplus to rice mills for processing.

With lower yields, the price in shops and markets has tripled and Sri Lanka is more reliant on imports it can barely afford, and not just of rice.

Fruit and vegetable yields are also down and general food inflation is running at 50%.

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The official weekly tally of staple prices in Colombo's wholesale market shows green chillies up almost 40% in a year, okra 50%, potatoes 60% and limes 240%.

All these prices are driven up by fuel shortages adding to the cost of getting produce from rural areas to the cities, where the bulk are consumed.

Add a chronic shortage of liquid natural gas used for cooking, more important during the rainy season when firewood is soaked, and Sri Lankans face a cost of living crisis that's brought them on to the streets, tipping an economic crisis into a political one.

As President Gutabay Rajapaksa dug in this weekend, declaring a state of emergency that gives him the power to suppress further protest, Sri Lanka's finance minister admitted the country has just $50m of accessible foreign currency in reserve.

That's barely enough to cover a month's fuel imports, leaving the country reliant on aid or loans from China and India as it tries to negotiate a bailout with the International Monetary Fund, and restructure annual debt repayments of $7bn a year.

That this verdant, abundant island could soon face food shortages may be the starkest measure yet of the trouble it's in.

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