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Organic Disaster

Summary:
Sri Lanka’s President abruptly banned chemical fertilizers earlier this year in a bid to become 100% organic. The ban has resulted in reduced production and soaring prices that, together with declining tourism and the pandemic, have created an economic crisis. According to major Sri Lankan tea conglomerate Herman Gunaratne, one of 46 experts picked by President Rajapaksa to spearhead the organic shift, the move’s consequences for the country are unimaginable. “The ban has drawn the tea industry into complete disarray… If we go completely organic, we will lose 50 per cent of the crop, (but) we are not going to get 50 per cent higher prices,” he reportedly said. …Former central bank deputy governor W.A. Wijewardena reportedly termed the organic plan as a “dream with unimaginable social,

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Sri Lanka’s President abruptly banned chemical fertilizers earlier this year in a bid to become 100% organic. The ban has resulted in reduced production and soaring prices that, together with declining tourism and the pandemic, have created an economic crisis.

According to major Sri Lankan tea conglomerate Herman Gunaratne, one of 46 experts picked by President Rajapaksa to spearhead the organic shift, the move’s consequences for the country are unimaginable.

“The ban has drawn the tea industry into complete disarray… If we go completely organic, we will lose 50 per cent of the crop, (but) we are not going to get 50 per cent higher prices,” he reportedly said.

…Former central bank deputy governor W.A. Wijewardena reportedly termed the organic plan as a “dream with unimaginable social, political and economic costs”. He said Sri Lanka’s food security had been “compromised” and without foreign currency, it’s “worsening day by day”.

An island-wide survey of farmers found out that 90 per cent use chemicals for farming and 85 per cent expected sizable reductions in their harvest if disallowed to use fertilisers. Moreover, the survey said that only 20 per cent farmers had the knowledge to transition to completely organic production.

It also found that 44 per cent farmers are experiencing a decline in harvests, and 85 per cent are expecting a fall in the future.

The survey also revealed that many key crops in Sri Lanka depend on heavy use of chemical input for cultivation, with the highest dependency in paddy at 94 per cent, followed by tea and rubber at 89 per cent each.

With the shift from chemical to organic cultivation, Sri Lanka needs a large domestic production of organic fertilisers and biofertilisers. However, the situation is very bleak.

The government has responded to the soaring prices not by reversing its decree but in the usual way by imposing price controls, attacking “hoarders” and seizing stocks of agricultural commodities like sugar.

Organic farming has its place but it takes a lot of human capital to make it work and overall it results in lower yield and thus more land used. Nor is organic farming less polluting per unit of output. See this piece from the Annual Review of Resource Economics.

Organic agriculture is often perceived as more sustainable than conventional farming. We review the literature on this topic from a global perspective. In terms of environmental and climate change effects, organic farming is less polluting than conventional farming when measured per unit of land but not when measured per unit of output. Organic farming, which currently accounts for only 1% of global agricultural land, is lower yielding on average. Due to higher knowledge requirements, observed yield gaps might further increase if a larger number of farmers would switch to organic practices. Widespread upscaling of organic agriculture would cause additional loss of natural habitats and also entail output price increases, making food less affordable for poor consumers in developing countries. Organic farming is not the paradigm for sustainable agriculture and food security, but smart combinations of organic and conventional methods could contribute toward sustainable productivity increases in global agriculture.

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Alex Tabarrok
Alex Tabarrok is Bartley J. Madden Chair in Economics at the Mercatus Center at George Mason University and a professor of economics at George Mason University. He specializes in patent-system reform, the effectiveness of bounty hunters compared to the police, how judicial elections bias judges, and how local poverty rates impact trial decisions by juries. He also examines methods for increasing the supply of human organs for transplant, the regulation of pharmaceuticals by the FDA, and voting systems.

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