ECONOMYNEXT- Sri Lanka could export sugar at Rs 2,500 per kilogram (about US $ 12) after banning agrochemicals, and also produce 20 percent of the country’s organic fertilizers, a minister said.
Farmers will be saved thanks to a premium organic fertilizer produced by two state-owned sugar companies,
According to Janaka Wakkumbura, Minister of State responsible for the development of minor crops, including sugar cane, corn, cashew, pepper, cinnamon, cloves, betel-related industries and promotion of exports.
State-owned sugar companies aimed to achieve organic certification by 2023 and export sugar at high prices, he said.
Companies now functioned as “import substitution industries (ISIs)” much like Latin America. However, the minister is trying to turn them into exporting companies.
“If we get this organic certificate, the sugar sold at Rs 115 per kg in Sri Lanka can be sold for Rs 2,500 per kg in foreign markets without raising the price of sugar in the local market,” Wakkumbura said on July 21.
Economists and philosophers generally attribute the losses of state-owned enterprises to the lack of imagination and innovation that cannot keep up with the voluntary choices made in the market by customers involving free trade and the use of coercion and to totalitarian methods of operating state agencies.
Sri Lanka’s state-owned sugar companies initially suffered billions of rupees in losses after the expropriation.
The companies then made profits through high import taxes on brown sugar and ethanol, diverting import duties that would otherwise have gone to the treasury (tax arbitration).
Last year, ethanol imports were banned, allowing state-owned sugar companies to increase their profits. In export markets, there is no government to tie the hands of customers and force them to buy the products of Sri Lankan state-owned enterprises, forcing the companies to compete with each other.
State sugar factories expropriated in 2011 will also produce organic fertilizers, filling the void created by the chemical fertilizer gang.
“We plan to produce 20 percent of the fertilizer demand in Sri Lanka,” Wakkumbura said.
Sri Lanka’s agricultural sector is in crisis with numerous protests by farmers over fertilizer imports after authorities banned chemical fertilizers, saying they would “save foreign currency” and reduce kidney disease.
Two state-owned companies involved in sugar production and growing cane will also produce 20 percent of the country’s organic fertilizers, he said.
“A bag of sugar is produced on one side and ethanol is produced on the other in the Pelwatte and Sevanagala sugar factories…” Minister Wakkumbura said.
“I hope to bring out a bag of organic fertilizer from the same factories this year.”
Minister Wakkumbura dismissed critics’ fears that large volumes of organic fertilizers are needed to replace chemical fertilizers.
He said the sugar companies will produce granules (keta pohora).
Usually, one hectare of sugar cane will use 650 kilograms of chemical fertilizer.
“But only 500 kilograms of fertilizer that we produce are needed,” Minister Wakkumbura said.
“The biggest fear of the people of this country is that they will have to put trucks and skips full of organic fertilizers to the crops, but we will produce granular fertilizers using new technology. “
He said the cabinet document in this regard will be presented to cabinet in the coming week.
“We know that nothing can be done without fertilizer, we know that farmers cannot cultivate without fertilizer,” Wakkumbura said.
“Since foreign exchange is brought into the country through these crops, the government will not intervene to put farmers in difficulty. We came to power thanks to the votes of farmers.
Sri Lanka also plans to double its exports from the current $ 10 billion to $ 12 billion through the export of organic spices and other agricultural products, Trade Minister Bandula Gunewardene said. (Colombo / July 22/2021)