I’ve been invited to moderate a three party discussion on live TV organized by the Ceylon Chamber of Commerce, on the government SLRC channel at 10 PM today. In preparing for the task, I read through the economic proposals contained in the General Election manifestos of the JVP, the UPFA and the UNP. Given our continuing engagement with the Sri Lanka agriculture sector which started almost 10 years ago, I thought I’d use the proposals on agriculture to illustrate the approaches of the three parties. I also thought it might be useful to see if any of our ideas had percolated into the political mainstream over the past decade.
Given our focus has been on the high-value fruit and vegetable segment, I will focus on that. All three manifestos recognize the core problems of excessive price volatility and waste in the supply chains that have resulted in both farmers and consumers being dissatisfied with the outcomes.
The solutions vary. Both the JVP and the UPFA, with different degrees of firmness, want to control what the farmers grow and when. The UNP want to establish a National Agricultural Marketing Agency that will, among other things, establish cold storage and warehousing facilities. Cold storage is found in the UPFA and JVP manifestos as well. There is no specific mention of forward contracts and futures in the UNP document, but the wording that has been used can easily accommodate this. The importance of using these market instruments to modulate the decisions individual farmers make on what crops to grow and when was a central conclusion that we drew from our research. The idea of centrally coordinating the extremely heterogeneous horticulture sector that is found in both the UPFA and JVP platforms is highly impractical. We cannot of course claim complete credit for the inclusion of warehousing and cold storage in all three platforms, but it is something we have contributed to.
All parties appear to have an affection for concessionary loans for farmers, with the UPFA promising to create another bank for this purpose. The unanswered question is whether the Sri Lanka state has the capacity to efficiently administer these kinds of targeted loan schemes, especially in light of the massive portfolios of non-performing loans in the books of the state banks that periodically have to be written off with public funds. One wonders why greater weight is not given to the use of insurance as a mechanism to address the risks inherent in agriculture. Only the UNP makes mention of agricultural insurance.
The small-holder quality penalty was a central finding of our supply chain work. We are happy to see it being addressed in the UNP platform in the form of a proposal to consolidate smallholders into cooperatives on the lines of several foreign examples.
We did not see explicit mention of what ICTs could do in improving agriculture, but that does not disappoint because we have always sought to position ICTs within the context of institutional changes such as consolidation of small holders so that they can more effectively participate in global supply chains.