Oversupply of agricultural products:

Changing consumption patterns may help overcome market failure

by Gamini Warushamana

Dr. E.M. Dassanayake

The Department of Agriculture celebrated its centenary last year. The Department made a significant contribution to the growth of the agriculture sector in the country. However, there are several unsolved issues and as a result, contribution to the economy is declining, while farmers are abandoning farming due to low profitability.

The Additional Director General (Research) of the Department of Agriculture, Dr. E.M. Dassanayake told Sunday Observer Business about the problems irking farmers and the agricultural sector. She blamed the continuous market failure of the agriculture commodity market on unplanned production, seasonal production and resulting oversupply and price fluctuations. Dr. Dassanayake is a specialist with 30 years experience in research on viral infections in crops. She did her Ph.D. on the same subject in the UK.

Q. One of the major issues in agriculture today is continuous market failure of paddy, fruits, vegetables and other agro products. What are the reasons for this crisis?

A. Our mandate is giving technology know how to farmers and to increase production. Today the responsibility of marketing is vested on other agencies and Government intervention is weak.

However, continuous market failure is a serious issue that negatively impacts on the growth of the sector and causes huge losses to the economy.

In the past, there were state agencies such as the Marketing Department which purchased agro products. Today the private sector is the main player and the agro commodity market is free and competitive. The reasons for market failure is unplanned production, seasonal production and the resulting oversupply followed by price fluctuations. Most of the commodities, especially fruits have seasonal supply.

Whatever technology the Department adopts, most farmers still use traditional methods of farming

Giving technology know how to farmers

What the Department should do is to provide information to farmers on the required quantity and help them to plan cultivation of these crops. We are now studying a model that is to be set up with the support of District and Divisional Secretaries and Provincial Agriculture Departments.

At present there is no such mechanism to provide information to farmers. Unplanned import also creates marketing issues. The big onion and potato farmers are a case in point and they suffer frequently.

However, to address issues related to seasonal supply of fruits and price fluctuation, our researches have introduced new technology of flower induction and off season production.

This technology was first used in pineapple cultivation and today pineapples are available in the market throughout the year. This technology has been successfully applied to mangosteens and durian.

Private sector companies have also introduced models to address these marketing issues successfully. The Outgrower system and forward sales agreements are some of them. This issue is also linked with our consumption pattern. We eat more rice and less vegetables, fruits and meat.

It is the other way round in some countries. According to MRI reports, a person needs to consume a minimum of 200g of vegetables and 150g of fruit a day. However, our consumption does not match this requirement resulting in an unbalanced diet and a cause for health issues.

Changing our consumption pattern may also be a solution to the marketing issues of fruits and vegetables. We launched a program at school level to increase fruit consumption.

Q. The Agriculture Department last year celebrated its centenary. What are the achievements of the Department during this period?

A. There are several sections in the Department with specific responsibilities and tasks. Research and development, seed and planting material, extension and training, socio-economic and planning, natural resource management, seed certification and plant protection and information and communication.

All these sub divisions have contributed to the overall achievement of the agriculture sector in the country and our success also reflects the oversupply of agro products and resulting marketing issues. This means we have invented technology, high yield varieties, and disseminated the technology to farmers successfully and as a result farmers are producing more than enough agro products.

We are self-sufficient in rice and there is a long history of successful research behind these achievements. From 1950 to 2009 the rice yield has increased from around 0.5 tonnes per hectare to 4.5 tonnes per hectare and our target is seven tonnes per hectare by 2016.

Policy makers point out the huge foreign exchange outflow for the import of food items and request increase local production. Our research is focused on these aspects.

There are thrust areas in agricultural research. In the paddy sector, our main focus is to increase profitability of farmers by increased productivity, sustainable use of soil, water and other input and minimal use of agro chemicals. In fruits, vegetables and root and tuber crops, year-round production is the goal.

The Department continuously introduces new and high yield crop varieties. Providing high quality seeds and planting material to farmers is our responsibility. However, there are limitations and we can supply only around 25 percent of total demand. The rest is supplied by the private sector.

However, some imported hybrid varieties do not match local conditions and as a result farmers and consumers suffer.

There is a demand for hybrid varieties from farmers because it is profitable. The Agriculture Department conducts research to develop local hybrid varieties as a solution.

Q. There is serious concern about the health impact of agro products as a result of high pest and agro chemical use. What are the solutions for these issues?

A. We were compelled to increase the yield of food crops and this commenced with the green revolution and high yield crop varieties were introduced.

These achievements in agriculture research could save the world from starvation and without high yield crops, the supply of food for the increasing population will be a serious issue.

New varieties need more input and as a result plants are vulnerable to pests and disease and therefore there is a need to apply pesticides and agro chemicals. Our researches have screened the required agro chemicals and required application levels.

The problem is that farmers overuse them and in some instances spray pesticides even after harvesting crops.

To address this issue, we need new regulations to control the use of agro chemicals. Today, they are freely available and anybody can purchase and use them. An expert should recommend the chemical needed and the quantity to be used. They should be issued by authorised vendors.

Today we don't have a mechanism conforming to this. There is an increasing demand for traditional rice varieties and organic farming products. We provide technology and multiply the seeds of such traditional varieties. However, we cannot maintain a 100 percent production regarding these varieties and these are niche products.

Q. Genetically Modified (GM) crops is a controversial topic and what is the stance of the Agriculture Department regarding GM products?

A. There is no clear answer and there is an on-going debate regarding this issue. Some countries use the technology to address issues in agricultural production and have developed high yielding, pest and disease resistant crop varieties using GM technology. GM foods are banned in Sri Lanka but imported GM foods may have crept into the market because there is no testing mechanism. India too has conducted successful GM research. We are yet to start GM research and we should start research to develop suitable GM crop varieties. Then we can disseminate them once the safety of GM products is assured.

Q. Whatever technology the Department adopts, most farmers still use traditional methods of farming and is one reason for low profitability and the setback in the agriculture sector. What is your view?

A. Earlier we had a good system of training farmers by visiting them but later it was abandoned due to the limited resources we have. We do have a system to approach farmers and relevant personnel but our researchers complain that their innovations have not reached the farmer.

This is a huge issue and we now use other methods to disseminate technology to farmers such as multi-media programs, CDs and programs in mass media are used to educate the people. We have over 10,000 officials in the Department and it is a huge operation.

Inefficiency and other matters such as attitude and lack of dedication of officers which is common in all state sector institutions is also rampant in the Agriculture Department as well. Low salaries and other facilities compared to the private sector are also issues in maintaining standards in research because qualified and experienced researchers join private sector companies for lucrative offers.