Fertiliser crisis and Sri Lanka’s long road to self-sufficiency

Since 2021, farmers are facing a prolonged crisis due to the chemical fertiliser ban. Even though the ban was lifted, current challenges have aggravated the crisis at hand

Sri Lanka’s farmers are facing a double whammy due to unseasonal weather patterns and rising global tensions due to the US-Iran conflict. Sri Lanka imports more than 90 percent of its fertiliser requirements, especially urea from Iran. Iran’s urea production is built on its abundant, low-cost natural gas feedstock, making it one of the most cost-effective producers globally. In 2024, up to 30% of global fertiliser trade passed through the Strait of Hormuz from the Persian Gulf to export markets around the world, as well as an estimated 20% of liquified natural gas (LNG), a key fertiliser feedstock, and 27% of globally traded oil. 

However, the indefinite closure of the Strait has triggered a sharp surge in global energy prices while impacting international supply chains. As a result, farmers are confronting soaring fuel and fertiliser costs which would further affect agricultural production and deepen the country’s food security crisis. 

Addressing Parliament in early April, President Anura Kumara Dissanayake promised a continuous supply of fertiliser to farmers during the southwest monsoon cultivation season. He said that a 50 kilogramme bag of fertiliser would be purchased at Rs. 13,500 from private companies and would be provided to farmers at a subsidised rate of Rs. 10,200. But farmers have raised doubts about maintaining these prices amidst global tensions. The world market price of a tonne of urea rose to USD 726 in March and USD 857 in April. 

Since 2021, farmers are facing a prolonged crisis due to the chemical fertiliser ban. Even though the ban was lifted, current challenges have aggravated the crisis at hand. According to experts, existing fertiliser stocks are enough to fulfill about 60% of the total national requirement. But paddy cultivation alone requires around 98,000 metric tonnes of urea for the Yala season. In addition to the paddy sector, Sri Lanka’s plantation sector too,  is impacted by soaring prices and limited availability of fertiliser. 

The devastation caused by Cyclone Ditwah inflicted an estimated USD 814 million in agricultural losses, destroying around 20 percent of the Maha cultivation period paddy harvest and other crops. Over 227,000 farmers were affected as floods submerged about 530,000 hectares of paddy land. Many farming communities are still struggling to recover from the disaster due to losses incurred.

The fertiliser crisis is just one challenge. Added to it is the burden of hiring farming equipment and covering labour costs. Many farmers depend on loans to cover their costs and they complain that the income generated from paddy farming is barely enough to feed a family, let alone settling loans. Perhaps this is one reason why the younger generation is not interested in paddy farming and are seeking for better jobs in urban areas. They prefer to work as carpenters or do contract work instead of spending days in paddy lands and incur financial losses. 

Cyclone Ditwah proved that Sri Lanka is highly exposed to future climate shocks. Therefore the government needs to address recovery and resilience in different approaches. Dry rations and compensation could be given as short term measures. But in the long term, in order to establish Sri Lanka as a food secure nation, the government should look at distributing seeds and fertiliser to affected communities. Even though there are no incidents of people dying due to starvation, issues such as malnutrition persist among impoverished communities. 

In future, Sri Lanka needs to maintain adequate buffer stocks of fertiliser as well as paddy to respond to external shocks such as the global fertiliser crisis. Right now the country cannot expect pending shipments and there needs to be a backup plan. Sri Lanka has experienced paddy and fertiliser shortages before, and this means we need to depend on another country to import these items. Therefore,  this is a golden opportunity for this government to take lessons from neighbouring India and develop a buffer stock system.

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