$200 million: The price of Sri Lanka’s botched all-organic farming program

Last July, the UN released a startling report documenting the effect of the pandemic on global food security in 2020: “In many parts of the world, the pandemic has triggered brutal recessions and compromised access to food. A total of three billion people could not afford a nutritious diet, and just under 10% of the world’s population was classified as undernourished, up from 8.4% in 2019. Overall , continues the report,

… more than 2.3 billion people (or 30 percent of the world’s population) lacked year-round access to adequate food: this indicator – known as the prevalence of moderate food insecurity or severe – jumped in one year as much as the previous five combined.”

What is the worst thing a government can do in these circumstances? Make it harder for farmers to produce food. Sadly, that’s exactly what Sri Lanka did in 2021. Following advice from Head in the Clouds activiststhe island nation has banned imports of synthetic pesticides and fertilizers as part of its drive to achieve 100% organic food production. [1] When this policy led to shortages, as any economist or agricultural scientist knew, the government accused the wealthy of hoarding commodities and established price controls for staples like sugar, onions and rice. .

The results of the Sri Lanka experience are known, and they are simply devastating. AlJazeera reported on January 26, the government agreed to pay $200 million in compensation to rice farmers “whose crops were destroyed”, the country’s agriculture minister said, in addition to another $149 million in grants to help these producers to rebuild their operations. Altogether, in the midst of a pandemic that has left so many hungry, Al Jazeera noted that

About a third of Sri Lanka’s farmland sat idle last year due to the import ban.

A predictable outcome

Economist Alex Tabarrok’s view on Sri Lanka experience: “A good example of central planning in action.” The government has been forced (or rather forced its citizens) to learn the hard way that officials are incapable of dictating how a nation’s food should be produced. They literally cannot know, for example, how much rice consumers will consume in a given year or how much input (like fertilizer) farmers will need to grow the crop.

Lofty goals like protecting “human and environmental health” are no substitute for market mechanisms that precisely guide the decisions farmers and consumers make. The same rule applies to any good or service we consume. Leonard Read laid out this argument in his classic essay me pencil, in which he claimed that no “brain” had the expertise to produce something as simple as a pencil. Even this requires the contribution of millions of specialized people awareness:

“I, Crayon, am a complex combination of miracles: a tree, zinc, copper, graphite, etc. But to these miracles that manifest themselves in Nature, an even more extraordinary miracle has been added: the configuration creative human energies – millions of minute skills configuring themselves naturally and spontaneously in response to human need and desire and in the absence of any human genius!”

Lesson learned?

The people least likely to learn this lesson are those most in need of education: organic food activists and the popular media that give them a platform. Despite their ignorance of science and economics, they wield considerable influence around the world, including in the European Union, which is about to cause serious damage to its agricultural sector by imposing deep cuts in the use of agrochemicals and increases in organic production.

For now, the dispute over organic food is primarily an academic debate for us in the United States, rich and well-fed that we are. But as the experience of Sri Lanka confirms, bad policies can have tragic consequences. We can only ignore reality for so long before people really start to suffer.

[1] “Synthetic” is a meaningless term in this context. I use it here for convenience. The reality is that “natural” chemicals are often very toxic, even those approved for use in organic farming.

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