Export what?

The dire need to increase Sri Lanka’s export earnings and thereby reduce the trade deficit to meet the severe financial crisis we are facing today has been emphasised by many. According to Central Bank annual reports (see Table), export incomes have not increased substantially during the last few years. Tea, which contributes around 12 % of the total exports, registered a notable decline of 16.0 per cent in 2022, attributed to many factors.

In 2022, production of high, medium, and low grown tea, declined by 13.8 per cent, 21.2 per cent, and 15.4 percent respectively. Meanwhile, the average yield in the smallholder tea sector decreased to 1,193 kilogrammes per hectare, registering a year-on-year decline of 15.6 per cent in average yield. Production of rubber and most of the other export crops too have decreased during the last decade.

Increasing exports is of paramount importance to overcome the current financial crisis. But what we are going to export is the main question. Newspaper reports indicate that the quantity of most of our crop exports has dwindled during the last few years. As indicated above, production of tea, our main export crop product, has not shown any substantial increase during the last few years. All these data indicate that the production of our export crops is dwindling and it is sine qua nun that an effective plan is implemented to increase our export incomes. In such a plan, increasing the production of currently cultivated crops such as tea, rubber and coconut need to be adequately dealt with.

Sri Lanka has a wide variation in soil and climate with 46 agro-ecological zones, each characterised by specific climate and soils making it possible the cultivation of a number of different types of crops such as tuberous crops, horticultural and floricultural crops, medicinal herbs, cane, bamboo, sunflower, castor etc. which have a considerable export potential. Out of the 6.5 million hectares of land, around 2.0 million hectares are in the wet zone. About 75% of it is cultivated and most of this land is of low-productivity due to soil degradation. In the dry zone, out of the 4.5 million hectares, only about 2 million acres are in productive use. Thus, there is a large extent of potentially cultivable land in the dry zone. Most of the soils in the dry zone are relatively more fertile than those in the wet zone. Non-availability of adequate rainfall during the Yala season is one of the limiting factors of crop production in the dry zone. However, better water management practices would reduce this limitation. Also, various major irrigation projects such as Mahaweli, Kirindi Oya, Muthukandiya and Inginimitiya provide irrigation to about 200,000 hectares in the dry zone. The numerous minor irrigation projects too would increase the irrigable area in the dry zone. Thus, there is a considerable potential to increase the level of crop production in Sri Lanka.

Although there are many organisations such as the Ministries of Agriculture, Industry and Commerce, Export Development Board, Industrial Development Board etc. there appears to be no proper medium long-term plan to promote the cultivation of these crops and develop appropriate agro-industries except for some ad-hoc projects. The Ministry of Industry and Agriculture should implement an effective agro-Industrial Development Programme which undoubtedly would increase our exports incomes, improve employment opportunities and incomes in the rural areas. Private sector can be involved in such projects for which appropriate technical assistance needs to be given by the relevant public organizations.

In any programme/plan to increase foreign exchange earnings from the agric. sector, agro-industries have to be given much emphasis. A large number of crops cultivated in Sri Lanka have considerable potential in various agro-industries. However only rubber, coconut and a few fruit crops are used in industries. Crops such as cassava, horticultural and floricultural crops, medicinal herbs, cane, bamboo, sunflower, castor, ayurvedic herbs, etc. have a considerable industrial potential but are not cultivated to any appreciable extent for want of better and improved varieties, technological know-how, relevant market information etc. Development of agro-industries will also increase export income and will have a tremendous impact on the economy of the country and also provide employment opportunities among rural people.   Private sector can be involved in such projects for which appropriate technical assistance needs to be given by the relevant public organizations.

There has been rhetoric on promoting exports. It is meaningful and effective actions that are necessary. Giving talks at numerous seminars etc. will not increase exports unless there is a realistic plan implemented effectively.

Dr. C. S. Weeraratna

csweera@sltnet.lk