Is it time to go back to where we came from?

18 February 2014 05:05 am - 0     - {{hitsCtrl.values.hits}}

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By Chatura Rodrigo

Achieving food security continues to be a challenge for Sri Lanka. Increasing population, changes in lifestyles, changes in food preferences and emerging middle income class demand more production. Therefore, governments need to make sure they are self-sufficient in their staple food, in our case, it is rice. Records suggest that Sri Lanka has achieved self-sufficiency in rice, which as a country we have to be very proud of.

However, there is a burning question that we need to ask from ourselves, “Is chemical fertilizer and pesticide-based intensive agriculture a viable option for the future?” Much is being discussed and debated on the topic of the harmful effects of chemical fertilizer and pesticide-based intensive agriculture, especially issues related to health and environment. Some argue that Sri Lanka should look into the possibility of having more organic rice farming and some argue that it might not be viable.
Therefore, there is a clear ambiguity among the scholars and policymakers in establishing whether a shift into organic rice framing is a viable option or not. Existing research is not strong enough to make an informed policy decision and hence there lies a research opportunity as well as a responsibility to all the environmental and agriculture economists of the country.





Transformation from organic to inorganic
Sri Lanka has a rich history of rice farming. There was a time that we were not concerned about rice production; what was produced was enough to feed the nation. But things changed and with the increase in population suddenly there were questions about “whether organic farming and traditional rice cultivation is capable of feeding the nation?”  

Then came the green revolution, there were new improved rice varieties which yielded far greater than traditional varieties and we were able to feed the nation. But these rice varieties were only successful with the help of chemical fertilizers and pesticides.  

Hence, successive governments made their full effort to make sure that the farmers are provided with fertilizer subsidies and the chemical companies were more than happy to keep on supplying the necessary pesticides. Within a few decades, organic rice farming was transformed into a chemical fertilizer and pesticide-based intensive agriculture achieving self-sufficiency in rice.





Future policy outlook in terms of rice farming
People who talked about sustainable growth are now talking about green growth. Countries are now more and more concerned about the toxic-free produce and the environment. Post-2015 development agenda has put equal access to safe food and environment conservation at its heart. Therefore, developing countries like Sri Lanka want to make sure that they achieve self-sufficiency in their staple food but also produce toxic-free products while minimizing the environment degradation.

Hence, having organic rice cultivation which satisfies all these requirements to a greater extent could be a possible solution. While there were many scholars arguing about the health and environment benefits of organic rice farming, the government also has shown increasing interest, by promoting more organic rice, while reducing fertilizer subsidies to considerable levels, especially with the 2013 and 2014 budgets.

But there are some who raise very important questions regarding organic rice farming; such as ‘can we keep abreast with the demand for rice?’, ‘will this yield desirable profits for farmers?’ ‘Is there a significant consumer demand for rice?’.

While all these are very important questions, they can be replaced by one broader one: Is there a significant value placed by people on the organic rice farming systems in Sri Lanka? The answer to this question will capture the aspects of supply and demand of organic rice, profitability of organic rice farmers and their opportunity cost and most importantly the different ecosystem goods and services that are produced by the rice farming systems but are not being traded as commodities in the market place.

It is always easy for people to see the direct benefits out of a commodity but the value people put on that will be greatly dependent on the indirect benefits as well. To fully comprehend this, we need to understand what the ecosystem goods and services (EGSs) are and the different EGSs produced by the organic rice farming systems.





Organic rice farming and EGSs
Ecosystem good and services are benefits arising to people from ecosystems. Agriculture systems such as organic rice farming systems are capable of providing many EGSs. Agriculture systems are multifunctional, hence at a given point they are capable of providing many EGSs. Some of the EGSs produced through organic rice farming systems are: toxic free produce, improved water quality, improved soil quality, increased bio-diversity and aesthetic appeal.

Therefore, while economic viability and the self-sufficiency are quite important to address the debate on organic vs inorganic rice farming, it is equally important that people understand the benefits received from organic farming as EGSs are for the moment not being traded in the market place.

However, exploring all these factors is not an easy task. Yet, debates like these deserve solid arguments. Hence, the “valuation of organic rice farming, including EGSs provided by the farming systems” is quite important.





What are research options?
Valuing ecological goods and services is a complex task. However, there are very dynamic methods established by environment economists which allow one to tackle these tasks quite comprehensively. In establishing the viability of organic rice farming systems, the research problem that one would want to explore is “whether organic rice farming attracts a significant value.”

The answer to this research problem will justify whether Sri Lanka is ready to expand into organic rice farming. An effective valuation tool will capture all the aspects of rice self-sufficiency, economic viability and preferences towards the different EGSs produced by the organic rice farming systems.

A valuation can be done either through consumers (demand side) or famers (supply side). However, in the case of organic farming, a comprehensive valuation through consumers is not quite possible. The organic rice products are available in the market place. A consumer pays a certain price for that, which is above the price of inorganic rice.

Therefore, there is a price premium (difference between organic and inorganic) available, which represents the willingness to pay (WTP) for organic rice. However, this price premium represents the EGSs produced by the organic rice farming systems. Hence, even though a comprehensive valuation is not possible, a research could possibly capture what different EGSs does this price premium represent? It is also possible to capture the separate willingness to pay values for different EGSs.

But, a more promising approach would be to look at this research problem through farmers. Farmers cultivate organic rice for commercial purposes as well as consumption. Therefore, a farmer will also be a consumer and that is a unique situation for a valuation study. There are many valuation methods, but two promising approaches are, stated preference approaches and revealed preference approaches.

However, since the percentage of organic rice farming is small compared to the inorganic rice farming, a better way to employ is the revealed preference approach. A popular revealed preference method adopted by environment economists to look at farming systems is the “production function approach”.

Production function approach basically explains a production of a commodity as a function of the inputs to the production system, opportunity cost of time and EGSs produced by the production system. In giving a valuation for the organic rice farming systems, this approach will take into account the economics, self-sufficiency and EGSs aspects, which is the centre to the debate on organic vs inorganic rice farming.





Challenge and way forward
It must be acknowledged that there is plenty of research done into the organic rice farming sector in Sri Lanka. However, the majority of these studies are focused on improving organic rice farming systems, mostly by new improved traditional rice varieties, producing efficient organic fertilizers or changing farming methods.

There are also a few studies done to look at the consumer perceptions on organic rice products as well as other organic products such as fruits, vegetables and tea. However, the research has largely failed to capture the economic value of organic farming systems, which can be directly used to evaluate policy options. Hence, this sort of a study will be the first of its kind in Sri Lanka and for the South Asian region for that matter.

Researchers of the Institute of Policy Studies (IPS) of Sri Lanka have taken up that challenge. Recently a research study was launched to estimate the economic value of the organic rice farming systems of Sri Lanka, taking a mixed method approach.

This research study will explore both the consumer side and the farmer side, including trying to establish whether organic rice farming is a viable option for Sri Lanka, in terms of economic benefits to the farmers, securing self-sufficiency of rice, producing toxic-free healthy products and minimization of environmental degradation.
This research could examine whether organic rice farming, even though it yields health and environment benefits, is or is not a suitable option for maximizing farmers’ profits and ensuring self-sufficiency in rice. At the same time, it could also evaluate whether Sri Lanka is ready for a major, transition from inorganic to organic rice farming. Either way, it will be a deciding factor in the mostly debated topic in the agriculture sector for the past several years and the policymakers will be able to make an informed judgment on their policy directives.
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