Top farmer left in poverty by unfair trade

Mr M. Dhanapla (on the right), a father of three from Anuradhapura, won a presidential award for the best paddy farmer. Now he has to take other jobs to make ends meet [Patrick Nicholson]

In 1995, Mr M. Dhanapla, a father-of-three from Anuradhapura, Sri Lanka, won a presidential award for the best paddy farmer. Now he has to take other jobs to make ends meet.

Mr M. Dhanapla says, “I’m reduced to poverty. Paddy is now 18 rupees a kilo because it is after the harvest. But during the harvest it is 10 rupees a kilo. The price is so low because of the lack of government intervention. Merchants can charge whatever they like.

“Imported rice is one of the things which affect the price. Merchants can import cheap rice, forcing down the price of rice on the local markets. Meanwhile, production costs remain high.

"Due to the open economy, the merchants can buy at whatever price they want, and import cheap international rice.”

Staple crop

Rice is Sri Lanka's largest food crop - and the staple food for most of its people. Around 1.8 million families grow rice, two-thirds of them farming plots smaller than one hectare.

The government of Sri Lanka has traditionally used trade policy to protect basic foods from competition with imports. But the country has been undergoing liberalisation, including making large cuts to the tariffs that protect local agricultural produce.

Sri Lanka now has one of the most open economies in the region while, at the same time, there has been a lack of investment in agriculture for non-export produce, leaving the rice sector undeveloped.

Small farmers have been badly hit by problems caused by increased rice imports from more competitive countries.

CAFOD trade policy analyst Matt Griffith says: “The remaining, much-reduced, rice tariff is of vital importance for Sri Lankan rice farmers. It is the central factor in determining domestic rice market prices – and hence the viability of their livelihoods.

“At the World Trade Organisation, rich countries (notably the US) and more competitive developing countries are proposing tariff cuts that would force Sri Lanka to cut its agricultural tariffs even further.

"This would open the doors to a flood of cheap rice imports that would further undermine the livelihoods of poor Sri Lankan farmers.”

Defending special products

The Sri Lankan government is part of a group of developing countries (the G33) at the WTO trying to oppose this - by allowing poor countries to protect specific crops, such as rice, that are crucial to food security and poor people's livelihoods from further tariff cuts.

They are supporting a proposal called ‘Special Products’ which will be further negotiated at Hong Kong.

CAFOD will be at the World Trade Organisation meeting in December, along with partners from Kenya, South Africa, Cambodia and East Timor. We will be arguing the case for fairer trade rules, including allowing poor countries to protect special products which are important for reducing poverty among their people.

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