“Negligence of agri sector, a setback to the economy” | Sunday Observer

“Negligence of agri sector, a setback to the economy”

8 November, 2020

Sri Lanka will go from bad to worse in the post-covid era if its agriculture sector which has been the mainstay of the economy for decades is ignored, said? Senior Professor of Business Economics, University of Colombo, H.D. Karunaratne. He said the agriculture sector has been a vital cog of the Sri Lankan economy even though its contribution to the GDP declined sharply during the past three decades. Leaving out a sector that provides employment to a large number of the country’s workforce will have major ramifications to the economy which will have to rely on imports to meet the growing demand for food. The contribution of the agriculture sector in 2019 and? during the first quarter this year had been around seven percent while employing around 30 percent of the workforce of the country.

Sri Lanka spends a sizeable portion of its revenue on food imports each year to meet the rising shortfall. These include imports of milk powder, milk based products, wheat flour and sugar.

“I have been harping on setting up a task force comprising experts in multiple sectors to promote agriculture and develop micro, small and medium enterprises to manufacture? agri-based products for the local and export market,” Prof. Karunaratne said.

However, he said that delay to act will have major implications on the entire economy which will no longer be able to rely on costly food imports that will be curtailed if the current crisis persists.

“A mechanism must be created for micro, small and medium sector enterprises to make use of agricultural output to manufacture a range of agri-based products such as milk food, rice-flour, biscuits, sweets and all products that are being imported to the country which will help slash the staggering import expenditure incurred each year,” Prof. Karunaratne said.

He said the home garden expansion project initiated by the government is a good move given the availability of waste arable land, sunlight and water in the country..

He said the other key tenants of the economy such as services and manufacturing sectors to play a vital role and therefore continuing work in these sectors while adhering to healthcare guidelines is crucial to keep the economic wheel rolling.?

“A complete lock down is not a viable solution though it could be a short term strategy to handle the crisis.

Service sector which comprises logistics, transportation, ICT services, leisure, travel and tourism to name a few accounts for around 60 percent of the GDP in Sri Lanka and if the sector which has a wide exposure to the global economy is hit the economy will suffer a major blow,” he said, adding that work and healthcare measures must go hand in hand.

He said the economy this year is likely to record a minus three percent growth this year and if sound long term strategies are not in place to face the new year 2021 could be a challenging year.

“However, we cannot predict the outcome of next year in terms of economic growth as all depends on when the crisis will come to an end.

Therefore we need to be ready to face fresh challenges being agile and innovative taking a cue from other countries,” Prof. Karunaratne said, adding that everyone will need to make major sacrifices by forgoing statutory leave and fringe benefits to pull the country out from the current crisis.

He said it will not be a V or W shaped economic path but a zigzag route to recovery in the post crisis time.