Sri Lanka's New Fertilizer Cash Grant (FCG) Scheme for paddy: What do participants and associates look and hope for?

This paper examines stakeholder perceptions and expectations regarding Sri Lanka’s new Fertilizer Cash Grant (FCG) scheme for paddy farmers. It presents findings from qualitative research assessing the potential impacts and challenges associated with the program. The document is valuable for policymakers, agricultural development practitioners, and researchers interested in understanding the effectiveness of subsidy programs in developing countries.

Key Insights

Awareness about the proposed FCG

None of the interviewed Agriculture Research and Promotion Assistants (ARPAs) were adequately informed about the proposed FCG. This lack of information hinders their ability to effectively support farmers in the Maha 2023 season. According to ARPA1, “We were instructed to gather data on cultivated lands, but did not receive any information. There remains uncertainty whether vouchers would be issued, fertilizer would be supplied, or how and when the monetary grants would be disbursed.”

Perception about the proposed FCG

Both ARPAs and most farmers have a negative outlook on the proposed FCG. This negative perception stems from prior experiences with similar programs that suffered from untimely cash disbursement, inadequate funding, corruption, and a lack of trust in government officials.

Timing

Most farmers questioned the timing of the FCG, noting that land preparation and sowing were already underway without the disbursement of the cash grant. As one farmer emphasized, “the most crucial aspect is not just whether we receive the cash grant or not, but when we receive it.”

Amount of cash grant

Many farmers expressed dissatisfaction with the amount of the cash grant, deeming it insufficient to cover the rising costs of essential inputs. The FCG is not indexed to inflation, reducing its effectiveness over time.

Prior experience with subsidy programs

Farmers harbor skepticism toward the proposed FCG due to negative experiences with past subsidy programs, where some eligible farmers did not receive benefits. According to ARPA2 “data itself on paddy farmers were collected during land preparation, so there is no guarantee that all those who prepared land would actually cultivate paddy.”

Commercial vs. Subsistence Farmers

Commercial farmers are more likely to invest the grant in farming activities to enhance their agricultural production. In contrast, subsistence farmers may prioritize immediate household needs, such as health care and education.

Environmental Benefits Associated with FCG

Neither ARPAs nor farmers anticipate that the cash grant will lead to environmental benefits or increased use of organic fertilizers, due to limited availability, transportation difficulties, and production challenges.

Key Statistics & Data

• About 1.2 million farming families are qualified to receive the FCG benefit (Agrarian Services Department, 2023).
• The FCG provides a maximum allowance of LKR 15,000 per ha of cultivated land for the Maha season-2023.
• Most farmers interviewed operate less than 3 ha of paddy land.
• A single bag of Urea can cost approximately LKR 9,500 per 50 kg bag.

Methodology

This study employed qualitative data collected from stakeholders involved in the FCG. In-person, semi-structured interviews were conducted with 30 paddy farmers, office bearers of farmer organizations, and five ARPAs in the Anuradhapura district, a major rice-growing region in Sri Lanka. The interview questions explored perspectives on the potential benefits, utilization, barriers to effectiveness, and potential modifications to improve the FCG. Data analysis involved line-by-line open coding to assign data to categories, followed by subsequent analysis to assign categories to themes corresponding to theoretical constructs. The trustworthiness of the data was assessed using credibility, dependability, confirmability, and transferability measures.

Implications and Conclusions

The study’s key conclusions include:

• Mixed Perceptions and Attitudes: Farmers have diverse perceptions and attitudes toward FCG, with skepticism arising from negative experiences with previous subsidy programs.
• Economic Crisis Impact: The ongoing economic crisis influences farmers’ perceptions, as many believe small farmers may use the funds for immediate consumption rather than farming.
• Lack of Trust in Government Agencies: Negative experiences with previous programs and a lack of trust in government agencies have affected farmers’ attitudes toward FCG.
• Importance of Timing and Distribution: Farmers stressed the need for timeliness of delivery of funds and efficient monitoring mechanisms.
• Desire for Accessible Fertilizers: A common preference among farmers is for accessible and affordable fertilizer supplies over FCG.
• Awareness and Training Needs: Farmers expressed the need for better knowledge and access to resources, including training and support services.

The success of the FCG depends on addressing multifaceted challenges, including the economic status of farmers, the availability of agricultural inputs, and the trustworthiness of government agencies. The study suggests improvements such as transparent and timely disbursement, a robust targeting mechanism, diversified support, and farmer training programs.