Sri Lanka’s controversial 2021 agricultural transition has returned to national prominence after World Bank Senior Economist Jakob Engel characterized the country’s past chemical fertilizer import ban as having “proven to be a bad decision.” Speaking at a media briefing in Colombo following the release of the institution’s latest economic assessment of Sri Lanka, Engel reflected on the long-term ramifications of the policy while answering questions regarding the nation’s future agribusiness strategies.
The policy originated in 2021 when the administration led by then-President Gotabaya Rajapaksa imposed nationwide import restrictions on chemical fertilizers, pesticides, and weedicides. Defending the measure on September 24, 2021, at the United Nations Food Systems Summit, Rajapaksa described the directive as a “bold step” designed to transition Sri Lanka toward organic agriculture and curb adverse health and environmental impacts. Although the government argued that organic cultivation would bolster food security, alleviate rural poverty, and improve nutrition, Rajapaksa acknowledged at the time that domestic organic fertilizer output was insufficient and that farmers accustomed to conventional inputs were resistant to the abrupt change.
The sudden restriction generated widespread resistance across farming regions, sparked alarms over declining crop yields, and drew calls from industry stakeholders for a gradual transition before becoming a focal point in the lead-up to Sri Lanka’s severe economic crisis. Addressing the briefing five years later, Engel stressed that the core lesson extends beyond a single directive, noting that repeated policy shifts over decades have created severe uncertainty for agricultural investors, businesses, and farmers. He emphasized that agricultural frameworks must prioritize production, economic stability, and environmental sustainability through evidence-based, predictable strategies rather than frequent reversals.
Key Developments
- Former President Gotabaya Rajapaksa instituted a sweeping ban on chemical fertilizers, pesticides, and weedicides in 2021, promoting it at the United Nations Food Systems Summit as an organic transition.
- The sudden shift led to farmer protests, reduced yield expectations, and widespread debate preceding the height of Sri Lanka’s economic crisis.
- World Bank Senior Economist Jakob Engel noted in Colombo that the ban proved to be an ill-advised decision and highlighted the dangers of unpredictable policy changes.
- Engel recommended essential reforms for Sri Lanka’s agricultural future, including eliminating anti-export biases, creating a level playing field for exporters, and enhancing logistics and compliance networks.
- The economist called for structural improvements across land, credit, finance, and insurance markets to foster long-term stability and productivity.
Looking ahead, Engel outlined critical priorities to revitalize Sri Lanka’s agribusiness landscape, noting that authorities must eliminate anti-export biases and establish an equitable environment for exporters. He concluded that long-term recovery depends on enhancing sector productivity, modernizing compliance infrastructure and logistics networks, and reforming land, finance, credit, and insurance markets to restore certainty across the agricultural economy.