Put one’s money where one’s mouth..

32809032Put one’s money where one’s mouth is an informal phrase used for saying that someone should do something; especially spend money, to show that they mean what they say instead of just talking about it. Today an opportunity exists for the state machinery in Sri Lanka to put a stop to tobacco cultivation that is harmful to its users, equally detrimental to the farmers and their families; because so much was told to the people of the harm caused to health by smoking tobacco by the state when imposing heavy tax that has resulted in cigarette prices in Sri Lanka the highest in Asia. A proper implementation of it will kick start the 1500 days Development Plan that will uplift the lives of the people.

The farmers of Jaffna district in the Northern Province have been involved in tobacco cultivation for export to the rest of the country as early as the late 19th Century, made major gains from cash crop boom in the 1960’s and 1970’s. Economically, the import substitution policies from 1970 to 1977 in particular, supported the cash crop boom in onions, chilies, tobacco, potato and banana etc., which fetched higher prices in the rest of the country. Agriculture and fisheries have been the principal economic activities of Jaffna district that drove the engine of growth and contributed substantially to the GNP of the country. The agriculture sector, including crop and livestock has contributed around 65% of the total gross domestic product of the district.

Due to the three decades of civil war the district contributions to the GNP of the country dropped substantially. These problems emerged in early 1980’s as labour costs were increasing with the boom in the mid-1970’s and then other costs rose with the introduction of the open economic reforms, as the price of cash crops declined. In addition the Northern coasts of the peninsula were badly affected by tsunami of the 2004 Indian Ocean earthquake; Fisheries sectors of this district were badly affected. People displaced from the coastal villages of Kankesanthurai, Myliddy and Palali due to the formation heavy security zone are not yet settled in the above villages and are facing difficulties without homes and jobs. Fisheries and agriculture sector in the above villages are affected badly and the state has plans to improve the living standards of those in these conflict affected zones that was delayed due to the past negative peace years. And the problem of collective trauma due to the exposure to conflict, war and disaster situations has impacted on the fundamental family and community dynamics; the New Coalition Government is making an effort and is progressing to address them in spite of many problems.

During the civil war many peninsula farmers had to face forced displacements,  been unfortunate with loss of cultivatable land to the tri-forces under the pretext of security, breakdown of input supply, alterations in handling, transport, marketing and distribution necessary to export to the mainland their products, in addition their harvests failed due to crop diseases and the drought. It was only viable for people who had an alternate source of income and not dependent on agriculture for the day to day expenditure of the household and yet to many agricultural production was still for their subsistence. The extent of the impact is clear from the figures received, tough the total extent of high land available for cultivation was 7,851 ha and with 1.642 ha (21%) held with the tri-forces, about 2000 ha lost as they were either in the vicinity of firing range of the battling forces or due to water sources being polluted by intrusion of salt water and other contaminants meant only in 4,200 ha were cultivated for field crops and vegetables during civil war.  Then farmers were forced to lift water manually to irrigate from the dug wells due to restrictions such as power cut and fuel embargo imposed by the state. During those dark days as the saying ‘necessity is the mother of invention’ saw farmers having to improvise on many productions related activities for survival.

In this backdrop, when normalcy returned to the peninsula tobacco farmers saw it as a window of opportunity to export their produce to the rest of the country, they resumed tobacco cultivation, without anyone instructing them to do so. During the 2007/2008 Maha season tobacco was cultivated in 765.5 ha extent (20% of the extent available) and producing a yield of 2,442.4 MT, while Yala season the yield was 30 MT produced in 5 ha extent.  Considering that hundreds of families in the district, that are engaged in tobacco cultivation and that there is likely to be a reduction in demand for tobacco products over the medium to long-term future, a decision must be made by the authorities to identify viable crop alternatives to tobacco.

On this subject, before proceeding with the discussion of individual country experiences it would be helpful to review a few basic concepts of what is required for competitive agricultural development. In developed countries, where most tobacco was produced until the late 1960’s, diversification away from tobacco has been facilitated by quota buy-outs and other generally favorable economic conditions that naturally attracted workers away from tobacco to other areas of agriculture and non-farm employment. These opportunities are limited in the remote villages in Jaffna where tobacco is grown to this day and the development of crop substitutes is likely to be a far more complex business today that demands attention to a great many things, by farmers and other private investors as well as by state and donors alike. To understand this challenge, it is worth to know the concepts of value chain and supply chain development. The value chains essentially represent enterprises in which different producers and marketing entities work within their respective businesses to pursue one or more end-markets and are completely unaware of the linkages between their operation and other upstream or downstream participants, that include input supply, production, transformation, handling, transport, marketing and distribution necessary to create, sell and deliver a product to a certain destination. The viability of any new enterprise also depends on the acquisition of specialized skills, the efficiency of input supply and availability of credit. Beyond the farm level, many other aspects of competitive value chain development must also be addressed. These include access to post-harvest handling facilities, efficiency of transportation networks, ability to amass sufficient quantities to attract buyer interest and adherence to international standards for horticulture and livestock products in particular. The scope for competitive development is also determined by competition with other producers of the same product, both at the international and domestic levels.

Control of tobacco cultivation is nothing new in the agriculture sector; it has been affected already in many countries in the world. News from Bangladesh, Kenya and Brazil show how farmers in these countries have switched from growing tobacco to alternative crops. After years of escalating health and environmental problems, low profits and the possibility of declining global demand for tobacco, these farmers realize that growing tobacco has put them in a ‘no-win’ situation. They don’t call it alternatives, but call it switching back to old crops, as they don’t want tobacco in their food crop fields and want the government to support tobacco control in a much stronger way. Farmers could earn more from growing other cash crops than from tobacco more so if the government provides incentives with a “More food, less tobacco” policy. Naturally these farmers very dependent on growing tobacco and were nervous about making changes and but the government provided support to the farmers that opted to make the switch. Brazil ranks as a middle-income country and so has greater possibilities to develop high-value agriculture products for the domestic market than poorer countries. The Brazil vegetables are sold in local outlets, bananas for national trade and organic vegetables being marketed through a supermarket chain. While these ventures have each been successful in their own way, all have limited outreach and several unique problems encountered along the way that help to illustrate the point about attention to supply chain processes and the need for multiple value chains to emerge as viable alternatives to tobacco.

One of the most successful is the story of banana production in Brazil where farmers were able to make a complete transition from tobacco. By joining forces with each other and enlisting government institutions and private traders, the farm community was able to develop a competitive value chain for this commodity and much of the infrastructure required for bananas was already in place to serve other growers. Enticements offered by the tobacco industry in Sri Lanka were a major factor in attracting farmers to grow tobacco. Provisions of seeds, aggro chemicals, extension services and purchasing of the produce were part of the package offered to the farmers by the industry. Farmers elsewhere in the country have accepted this arrangement because, initially, it made tobacco growing more profitable than farming other crops. In the early stages, inputs were inexpensive and a high price was paid for the produce, so farmers were able to make a good profit. However, as the soil fertility began to decrease, and the price of labour increased simultaneously, the farmers’ profits dropped. Soon, the anxiety of falling profits coupled with the physical exertion associated with tobacco farming became unbearable, and they gradually shifted to growing alternative crops and land previously used to grow tobacco converted to alternative crops. The best performers have been pepper and coffee, in the hilly slopes, and in dry zone an assortment of pulses/grains (cowpea, mung beans, corn), fruit (banana and papaya) and various vegetables.

As reported in the previous posting in Northern Breeze the local farmers are to cultivate sugarcane, as proposed in the 2017 Budget to impose a minimum price for sugarcane with effect from 1st January 2017, based on the ex-factory price formula. To invite, local and foreign investors to invest in Sugar Mills in Kilinochchi district with a minimum plant size of 2,000 Tones crushed per day, and provide government land to cultivate sugarcane under the out grower system with the respective factories and provide a 100 percent capital allowance on the investment. Furthermore to boost production of high value fruits and vegetables there is a 135 million dollar credit from the World Bank, to train farmers in modern agricultural practices to promote export agriculture and to link smallholder farmers into modern agriculture value chains and with innovation and new technology will help improve the economic efficiency in the sector. The project will be unrolled in five participating provinces that include the North and East Provinces by the ministries of primary industry and agriculture. The project is expected provide new employment opportunities for women and young people and supports farmer organizations and farmer-agribusiness partnerships. The tobacco farmers could be pursued to participate into these ventures with proper guidance and incentives from the state as appropriate.

The Jaffna District agricultural state machinery should facilitate their farmers to take up alternate crop in place of tobacco for cultivation, as it is harmful to its users, equally detrimental to the farmers and their families. Therefore it is prudent to discourage tobacco cultivation in the peninsula and the islands as a first step, and provide details about growing alternatives and a support scheme introduced for the farmers of the land where tobacco was grown earlier, to this end proper investigations are needed from concerned agricultural and related departments coordinated by agrarian services. Similarly, current tobacco farmers need to be made aware of the health and social consequences associated with tobacco cultivation by the health authorities, to encourage tobacco farmers to cultivate alternative crops to sustain their livelihood. So much was said by the state of the harm caused to health by smoking tobacco as reasons to justify imposing heavy tax that has made cigarette prices in Sri Lanka the highest in Asia. Once this land used for tobacco cultivation and the land held by the tri-forces are released and modern agricultural practices to be applied for cultivating field crops and vegetables, it could double the production that will like a tsunami kick start the agriculture sector engine of growth in the peninsula that would induce the other districts in the province. The state machinery must act to stop the cultivation of Tobacco to confirm what was said against Tobacco and if the leaders at the center and at the province act as per the informal phrase “put one’s money where one’s mouth ………….”.