Damage to farmland by floods exceeds billions of rupees:

Crisis in food security imminent - Economic Analysts

By Gamini WARUSHAMANA

The cost of the damage to farmland by the recent floods will exceed billions of rupees and the country will have to undergo a difficult period, economic analysts said and added that a major crisis in food security is imminent.

However, correct information on the damage cannot be obtained as responsible government officials keep mum while some media exaggerated figures over and above the actual damage.

Adverse weather conditions hit many countries especially food exporting countries creating fear of a second global food crisis in three years.

No cheap rice and curry

Incessant rains over the last two months across various parts of the country and all main paddy farming areas - Ampara, Polonnaruwa, Anuradhapura and Batticaloa districts were under flood. Government officials in the districts said almost all paddy fields have been destroyed.

Media has reported that nearly 90 percent of the Maha paddy cultivation has been damaged. The Secretary to the Ministry of Agriculture denied these figures as exaggerated and said that still they are estimating the damage. According to preliminary information the damage will be less than 200,000 hectares.

An internal report of the Ministry said that the paddy production loss is over 700,000 tonnes and over two million tonnes can be expected if this Maha season which is sufficient for seven months consumption.

Apart from floods the paddy cultivation has been seriously affected by continuous rain and gloomy weather. Farmers failed to apply fertiliser, weedicides and pesticides on time and when the paddy fields were flowering there was low temperature and no adequate sunlight as a result the paddy yield dropped sharply in most parts of the country. The price of rice is increasing as supply is stagnant and mill owners last week said that they cannot provide rice at the maximum retail price set by the Government as milling and paddy supply has been limited.

Damages to infrastructure

According to the Director General of the Department of Irrigation Dr. G.G. Godaliyadda three medium size tanks have breached; one in the Polonnaruwa district and two in the Ampara district. Sources said 368 small tanks, 271 anicuts and 769 canals have been damaged. Dr. Godaliyadda said the damage to the canal system is extremely high and the total cost is around Rs. 3 billion.

Renovation and reconstruction will commence immediately to protect remaining paddy fields with existing funds of the department. The Government has already allocated Rs.1.6 billion for the purpose, he said.

Other crops too have been destroyed and vegetable and fruit cultivation in all parts of the country, has been affected by heavy rain. According to sources 7,993 ha of maize, 2,755 ha of chilies, 13,850 ha of grain, 11,000 he of vegetable and 769 ha of fruits have been damaged.

Damage to livestock and poultry has not been estimated. Vegetable supply from main cultivation areas such as Dambulla, Nuwara Eliya and Welimada has reduced and farmers said that they cannot start cultivation until the rain ceased.

They said that it will take two to three months to restore the vegetable supply. In addition to food crops some paddy stocked in households in flood affected areas have been spoilt. Director, Price and Wages of the Department of Census and Statistics D.C.A. Gunawardena said that this situation will increase the prices of commodities with higher weight on consumer price index and inflation will rise.

However he said that paddy stocks are sufficient for several months and there was no reason to panic.

Food insecurity

Economic analysts said that this situation will create fiscal pressure on the Government because it will have to spend enormously to provide relief for the people, reconstruct damaged infrastructure and reduce taxes on essential commodities.

Opposition political parties are already demanding to reduce the import duty on essential food items as a short-term measure. Government has already pledged to supply dry ration for flood victims for six months.

According to estimates there are over 1,200,000 affected people and the cost of the relief package would be massive.

Some economists said that food insecurity in the country is a long-term issue that is linked with Government policies.

Dr. Sirimal Aberathne of the University of Colombo said that high food price, from November to January is a seasonal trend and the adverse weather condition has only aggravated the situation.

He pointed out that although the Government has put a lot of money and effort to develop agriculture sector the results are minimal.

High vulnerability to market and weather conditions is the nature of this subsistence agriculture practice.

He said that to change the situation, more reforms are needed to make agriculture a business and attract more investments.

No cheap imports

Since the world is now facing the second food crisis in three years and as most of the countries face similar adverse weather conditions, the option of imported food at lower prices is also not possible in the future.

Food price inflation is an important topic in international politics today and some countries have faced political crisis over sky rocketing food prices.

The depth of the issue, as well as factors other than bad weather that fuel the food crisis has been illustrated by the recent report issued by the Food and Agriculture Organisation (FAO).

The FAO report said that global food prices are moving higher, hitting record levels since last month. The report blamed a jittery market reacting to unpredictable weather and tight supplies as the reason for price increases.

The FAO price index, which tracks 55 food commodities for export, rose 3.4 percent in January, hitting its highest level since tracking began in 1990, the report said. It was the seventh month in a row of food price increases, according to FAO.

Warning on tough future

Meanwhile the World Bank Managing Director Ngozi Okonjo-Iweala warned that food prices are not only rising, but they are also volatile and will continue this way into the future. She has said that factors such as weather, higher demand, smaller yields and crops diverted to bio-fuels are fuelling the crisis.

According to the FAO report sugar prices are at a 30-year high. Prices for cereals are rising but still below their April 2008 peak. Oils and fats are up and close to their 2008 level, and dairy is higher but still below its 2007 peak.

Even positive news, like good rains in Argentina and a strong harvest in Africa, has failed to keep prices from rising.

Experts also point out that increased export demand for food is also a reason for food price increases. For instance, changing diets stemming from higher incomes, especially in places like China and India, mean a greater demand for meat and better grains.