Securing Food Security

Originally appeared on The Morning

By Dhananath Fernando

World Food Day falls on 16 October. In Sri Lanka, food security has been a topic of discussion for a considerable period of time, especially gaining prominence during the Covid-19 pandemic. 

During that period, there was confusion between food security and self-sufficiency. Instead of focusing on ensuring food security, the emphasis was placed on self-sufficiency, with the belief that all food consumed in Sri Lanka should be produced within the country. There were even discussions among Sri Lankans about shifting from using lentils (dhal) to locally-grown maize.

After approximately two years, when we assess the Global Food Security Index report, Sri Lanka is ranked 79th out of 113 countries. Food security isn’t solely about achieving self-sufficiency by producing all the food within the country; it encompasses the affordability, availability, quality and safety, as well as a nation’s exposure and resilience to natural resource risks.

Prior to the inclusion of the natural resources and resilience component, Singapore led the Global Food Security Index. However, after adding this component in 2022, Singapore dropped to the 28th position, with Finland now topping the Index. India is in the 68th position, Nepal in the 74th position, and Bangladesh in the 80th position, just one spot below Sri Lanka.

Due to the economic crisis, characterised by high inflation rates, particularly in food prices, the number of people who were food insecure exceeded six million. This number has now decreased to less than four million, emphasising the significant role economic stability plays in ensuring people’s food security.

Sri Lanka’s food security has always been a challenge due to economic policies that have been against market dynamics. Monetary instability resulting from the unfettered levels of money printing led to food inflation, affecting the affordability of food. 

The Government’s imposition of price controls led to shortages of protein sources such as eggs and chicken, further impacting the availability of food. Additionally, the Government imposed a Special Commodity Levy (SCL) on selected food items as a protectionist measure, maize being a prime example, driving up prices. 

Maize is a key raw material for the aquaculture and poultry industries. Price volatility in maize also affects the prices of poultry products and other locally consumed protein sources, sometimes impacting the competitiveness of our agricultural exports. 

The Government’s approach, whether through higher tariffs or import bans, is equally detrimental. Our food security structure is simply unsustainable, with weak and unpredictable supply chains and inconsistent policies.

Ensuring food security involves addressing both macro and micro issues. A holistic approach, taking into account land rights, is essential. The documentary recently released by the Advocata Institute titled ‘Land, Freedom and Life’ highlights the challenges faced by farmers due to the absence of land rights, hindering their access to capital or technology to enhance productivity.

In addition to land rights, water management is another critical aspect that needs serious consideration. Currently, our water usage in paddy cultivation is unsustainable. We consume approximately 1,400 litres of water to produce 1 kg of rice. Even if we price a litre of water at 50 cents, the cost of the rice we consume would significantly surpass current prices. 

With the challenges posed by climate change, future water availability cannot be guaranteed. Despite the number of people experiencing food insecurity declining, our approach in food production is not sustainable. Another local or global shock could easily set us back.

The Government has attempted various approaches such as providing subsidies for farmers, free meals for school children, and free nutritional packages for women during maternity. However, in order to truly  address Sri Lanka’s food security crisis, a multifaceted approach is required. 

This should begin with macroeconomic stabilisation, providing land titles for farmers and agro-companies to enhance agricultural productivity, reducing labour costs in agriculture, recognising the interconnectedness of markets, and allowing market forces to operate.

Until these issues are resolved, World Food Day will remain a day for discussing problems without implementing solutions.

Cattle Slaughter Ban: It’s Not Intentions But Consequences That Matter

Originally appeared on Daily FT, Daily Mirror and The Island

By Sathya Karunarathne and Pravena Yogendra

The Cabinet of Ministers approved the Bill to amend laws to ban cattle slaughter in the third week of October. While this is a contentious policy measure, it did not come as a surprise as the Prime Minister proposed the same policy just over a year ago in September of 2020. 

From the outset, it may seem that the policy is well-intended. Alleviating animal suffering is a noble cause that many Sri Lankans would identify with. Unfortunately, even well-intended policies have unintended consequences. In the case of a cattle slaughter ban, the consequences can be dire for the livelihoods of thousands of people. As stated by the Department of Census and Statistics, 117,033 farmers raised cattle and/or buffalo locally and 56,984 farmers raised improved cattle and/or buffalo in 2020.1 Further, as reported by the Livestock Statistical Bulletin there were 296,111 cattle farms and 26,284 Buffalo farms registered in 2020.

The cattle rearing industry does not exist in isolation, nor is it sustained to nurture the beef industry alone. Cattle are an integral part of the dairy industry, leather tanning industry and footwear and leather goods industry. The dairy industry sells unproductive cattle, where 50% of the animal is salvaged as beef (3) and other parts are sold as raw material to other industries such as the leather tanning industry, etc. Therefore, a cattle slaughter ban would have consequences on all these sectors.

The Government’s intention in banning cattle slaughter is to increase dairy production and local agriculture as reported by the media. According to Central Bank data in 2020, the annual milk production from cattle was 414 m litres and 78 m litres were produced by buffalos. In the same year, Sri Lanka imported 102,355,524 Kgs of milk and milk products, and exported 1,057,079 Kgs of the same.

To keep this dairy industry running, milk producers need to get rid of unproductive cattle. Eranga Nihal Perera, the Chief of the Ceylon Cattle Farmers Association, put this into perspective speaking to the Sunday Times a few weeks ago. He stated that a bull or milch cow requires 10% of its body weight in food daily. For example, an adult stud bull weighs about 400 kgs. That is approximately 40 Kgs of feed per bull, every day. Therefore, a bull would require a monthly cost of around Rs. 26,000 to be maintained. It makes limited economic sense to sustain unproductive cattle incurring such costs as it will increase costs of maintenance with no return on investment. 

A total of 162,000 cattle were legally slaughtered in 2020. Key person interviews with leading industry stakeholders revealed that the cattle population which amounted to 1,628,771 in 2020 can grow up to three times within 10 years with the implementation of a slaughter ban with 75% of them counting to be unproductive.(10) The costs of maintenance will therefore evidently be unbearable. These cost increases, if they can be sustained at all, will be passed on to consumers as price increases in milk. A further stress to an industry already reeling with shortages and high prices. 

Beef is sourced from cattle deemed as unproductive by the dairy industry. Male cattle or bull calves are used to identify female animals in heat and to serve stud purposes, aiding the artificial insemination process. They are slaughtered for beef when they reach about three months of age. Milch cows are slaughtered after completing four calving cycles as they are considered aged, unproductive and unprofitable to maintain at this juncture. Unproductive animals must be culled to maintain the overall productivity of the herd as unproductive stud animals could mate with productive cows, producing low yielding calves. 

The latest available data shows that beef production in 2019 amounted to 29.87 metric tons.

Smallholder dairy farmers contribute to this as smallholders dominate the livestock industry. For example, a 2019 study by the University of Peradeniya revealed that among private dairy farms in the country about 95% are small scale producers. While cattle farming in Sri Lanka is running on narrow margins, a significant contribution of the marginal profits comes from the sale of these animals to the beef industry. 

Dairy farmers make an annual lifetime profit of ~30% from the sale of an animal. Therefore, small farmers who raise cattle individually for an additional income will be severely impacted by the ban. They will not be able to afford the additional maintenance costs of unproductive cattle and will have to halt their small scale business operations.

Banning cattle slaughter with the intention of increasing dairy production therefore is contradictory as it proves to be counterproductive. As illustrated above the milk industry can barely sustain itself without the beef industry. 

A slaughterer purchases an animal for ~LKR 300 per Kg live weight. Live weight ranges from 300-500kg. Thereafter, 50% of the animal is salvaged as beef and the remaining is sold to other industries.(14) The leather tanning industry is one such industry that sources raw material from cattle slaughter. A slaughtered cow yields 15-16 sq ft of rawhide. Rawhide is sourced from the slaughterer by the leather tanning industry at Rs. 45 per Kg. Domestically tanned leather is sold to the footwear and leather goods industry as raw material at Rs. 175 per Kg as opposed to imported tanned leather priced at Rs. 250 per kg ($1- 1.20).(15) 

Moreover, discussions with the industry revealed that about 60% of leather needed to produce affordable footwear is produced domestically and banning cattle slaughter will directly impact the accessibility of affordable footwear by the middle and lower-income earners of the country. Further, more than 60% of the footwear and leather goods industry consists of micro and small businesses.(16) Therefore, this policy measure will indeed hamper their access to affordable raw material and their very sustenance.

Implications of cattle slaughter 

As stated by the Buddhasasana, Religious, and Cultural Affairs Ministry Secretary, Prof. Kapila Gunawardana the Government is discussing the possibility of exporting ageing cows that will not be slaughtered in Sri Lanka with the implementation of the ban. However, exporting aged live cattle is challenging as there is a high probability of international markets being reluctant to purchase cattle exposed to infections in the process of transportation. 

With the increase of idling cattle, the Government will have to invest to build new cattle salvage farms, ensuring adequate veterinary facilities and daily feed. The NLDB has only two salvage farms in Kurunegala and Anuradhapura with a combined capacity of 1,000 animals at a time. About 400 cows are legally slaughtered per day.(19) As aged cattle require high maintenance costs with no return on investment, this will be an added strain on Government expenditure given Sri Lanka’s current limited fiscal space and precarious economic conditions. This will also clash with limited agricultural land available in the country leading to a serious threat to crops. 

Moreover, with the local beef industry coming to a complete halt, the domestic production and importation of alternative sources of protein such as chicken and fish will have to increase, meeting domestic demand and ensuring affordability for the average consumer. It is important to note that the prices of these alternatives have experienced a steep increase. According to the Department of Census and Statistics weekly retail prices, one kg of fresh chicken that cost Rs. 558.93 in November of 2020 costs Rs. 727.27 now. Further, one kg of salaya that cost Rs. 252.67 in November of 2020 is now priced at Rs. 291.67.

Moreover, a flat-out ban on cattle slaughter will breed an underground economy of illegal slaughter and trade. This will foster animal cruelty as the industry will not come under the purview of welfare authorities, creating the environment for low-cost slaughtering techniques defeating the very moral grounds of a cattle slaughter ban.

Further, banning cattle slaughter with no ban on beef consumption allowing for beef imports will only shift the burden of slaughter elsewhere. This is hypocritical as cattle will still have to be slaughtered abroad, for the consumption of Sri Lankan people. It is worthy to note that India is the fifth largest carabeef exporter in the world earning 2.8 billion dollars in exports in 2020 despite the country’s religious veneration of cattle. 

It is evident that even though a slaughter ban may sound ideal in theory, it springs a chain of unintended economic consequences hampering the dairy, beef and other related industries, paving the way for further price increases and posing a threat to business operations. 

Therefore, it is clear that when making economic decisions it is paramount to look at policies in terms of incentives they create rather than blindly pursuing a goal. This simply means that immediate and long term consequences matter more than intentions. Economic policies therefore must strive to go beyond intentions crafted by hopes and inspiration. Failure to do this will certainly lead to disastrous outcomes for the whole nation. 

The opinions expressed are the author’s own views. They may not necessarily reflect the views of the Advocata Institute, or anyone affiliated with the institute.