Key Crop Production Falls, Raising Concerns Over Food Security and Economic Stability
Sri Lanka’s fragile economic recovery is facing fresh hurdles, with the Government’s own statistics revealing significant declines in the production of major agricultural commodities including paddy, tea, coconut, rubber, and fish during the early months of 2024.
According to the Central Bank of Sri Lanka’s (CBSL) Agriculture Sector Data Bulletin for March, paddy production for the ongoing 2024/2025 Maha season is projected at 2.61 million metric tonnes (MT) — a 4.2% drop compared to the previous Maha season. Although a silver lining exists with an 8.8% year-on-year increase forecasted for the 2024 Yala season, the overall picture remains concerning.
Meanwhile, fish production witnessed a sharp 15.1% decline in January, followed by a marginal recovery of 1.0% in February, mainly due to reduced inland fishing activities. Tea and coconut sectors have also suffered heavily, with domestic tea production plunging by 22% and coconut production by a staggering 31.6% year-on-year in February. Rubber production has similarly dipped, according to provisional figures from the Rubber Development Department.
Stakeholders Sound the Alarm
Industry leaders across key sectors are raising serious concerns about the implications of this decline.
Tea Exporters’ Association member Jayantha Karunaratne described the tea production drop as “alarming,” warning of long-term consequences if structural issues — including fertiliser supply and replanting — are not urgently addressed. He emphasized that while financial impacts are currently muted due to stable export prices, the industry’s sustainability is at risk without immediate intervention.
In the rubber sector, Sri Lanka Association of Manufacturers and Exporters of Rubber Products (SLAMERP) Director General Sisira Ranatunga criticized the lack of a clear Government plan to rejuvenate cultivation. Climate change, unresolved plant diseases, and dwindling motivation among smallholders have compounded the challenges, forcing manufacturers to increasingly rely on imports.
Fisheries have also been battered, with All Ceylon Fisherfolk Trade Union Chairman Aruna Roshantha citing fuel shortages, inadequate cold storage facilities, and unstable market prices as key reasons for reduced harvests. He lamented the absence of effective policies to revive the sector, warning that the economic collapse of fishing communities could have wider social consequences.
A Dangerous Cycle of Decline
Economist Professor Ananda Jayawickreme from the University of Peradeniya painted a sobering picture of the potential macroeconomic fallout. Using paddy as an example, he warned that reduced harvests could trigger a chain reaction of food shortages, soaring prices, increased imports, and mounting pressure on Sri Lanka’s fragile foreign reserves.
Prof. Jayawickreme stressed that food inflation could drive more people into poverty, eventually forcing the Government to increase welfare spending and risking another balance of payments crisis. In his view, strict adherence to IMF conditions could restrict the Government’s flexibility to mitigate these impacts through tax or price adjustments.
As agricultural output falls and key export commodities shrink, Sri Lanka faces the prospect of rising inflation, weakening the purchasing power of citizens and threatening hard-won economic stability.
Policy Decisions Ahead
The CBSL and the Government must urgently assess the full scale of production declines and take data-driven decisions on food imports to avoid exacerbating macroeconomic imbalances. Furthermore, targeted agricultural development programmes, crop diversification, and inflation-targeting monetary policies will be critical to avert a deeper economic crisis.
Trade Ministry Secretary K.A. Vimalenthirarajah confirmed that the Food Policy Committee would soon make key decisions on managing the situation, but stakeholders across industries are watching closely, hoping for swift and strategic action.