All-Organic Agriculture? Sri Lanka Cripples Farmers and Sparks Food Shortage

Earlier this year, Sri Lanka banned imports of synthetic pesticides and fertilizers, part of its effort to embrace organic-only farming. The project has left farmers without access to vital tools and sent food prices soaring.

When we argue over genetically engineered crops and pesticides in the developed world, the outcome of the debate doesn't determine whether or not we go hungry. Restricting and banning the technologies farmers utilize can have very serious repercussions, but we've yet to experience many of these; most of us live within minutes of multiple grocery stores stocked full of almost any food we could want. We have so much to eat that even the poorest among us are battling obesity. [1]

This isn't the case in many countries around the world. Restricting farmer access to synthetic pesticides and fertilizers, for example, can limit their production and cause serious food shortages as a result. Sri Lanka is living through this right now, as George Mason University economist Alex Tabarrok noted earlier this week:

Sri Lanka’s President abruptly banned chemical fertilizers earlier this year in a bid to become 100% organic. The ban has resulted in reduced production and soaring prices that, together with declining tourism and the pandemic, have created an economic crisis.

This experience isn't unique to Sri Lanka. Many countries have suffered food shortages due to idealistic pro-organic policies. But analyzing the situation as it unfolds exposes precisely what goes wrong when governments make decisions based on bad ideology and ignore evidence. 

Economics 101

Whatever else we can say about Sri Lanka's all-organic craze, it's clear that the country's farmers didn't approach the president and ask him to ban useful tools like chemical fertilizers. Ninety percent of these growers use such products, and 85 percent expected their yields to plummet if they were denied access to them. Roughly the same majority of farmers also said they didn't know how to begin farming organically, which is quite common. "Due to the higher knowledge requirements in organic farming," a recent review noted, "currently observed yield gaps between organic and conventional methods might further increase if a larger number of farmers would switch to organic practices." 

Therein lies takeaway number one. If organic agriculture were so clearly superior to its conventional counterpart, most farmers would have embraced it long ago. You don't have to force people to employ growing methods that increase their yields or cut their production costs. Inputs excluded from organic farming—like biotech seeds, synthetic pesticides, and chemical fertilizers—are expensive but boost productivity. The fact that growers still use these tools, sometimes even when they're banned, is the clearest evidence that Sri Lanka's policies are backward.

We can draw the same conclusion from the consumer's perspective. The prices of everyday foods like sugar, onions and rice exploded following the ban on agrochemical imports. Did the president re-evaluate his organic-only policy in light of this outcome? Sensible economic theory (and common sense) indicates that you should rescind a bad policy to avoid its consequences, so naturally, the government left the ban in place and blamed the problem on someone else, leaving the root cause unaddressed.

The president appointed a former military general to serve as “Commissioner General of Essential Services” and confiscate agricultural commodities from “hoarders.” The government then set price controls for these goods “in order to protect the consumers,” which has a well-documented history of causing and exacerbating shortages. Nice job, commissioner. The economist Ludwig von Mises explained how this happens using milk as an example:

On the one hand, the lower price of milk increases the demand for milk; people who could not afford to buy milk at a higher price are now able to buy it at the lower price which the government has decreed. And on the other hand some of the producers, those producers of milk who are producing at the highest cost — that is, the marginal producers — are now suffering losses, because the price which the government has decreed is lower than their costs.

This is the important point in the market economy. The private entrepreneur, the private producer, cannot take losses in the long run. And as he cannot take losses in milk, he restricts the production of milk for the market.

Feel-good ideology > science

Those economic considerations lead us to another key conclusion: the government didn't carefully review the evidence for the benefits of organic agriculture before enacting this policy. Had it done so, officials would have seen the obvious downsides of an all-organic policy, among them, increased land use and greenhouse gas emissions—and of course, higher consumer prices. Science writer Dr. Steven Novella laid out what these deficiencies actually lead to:

The science is actually increasingly clear on this point – organic farming is not good for the climate or global ecosystem. This often leads hardcore organic farming defenders to argue that we need to reduce the human population (again, non-sequitur – this does not justify inefficiency), often without stating explicitly that they are talking about mass starvation (of other, usually dark-skinned, people, of course).

Such harsh realities can be obscured by calls to “protect the health of the people and environment of the country that have been deteriorated due to agrochemicals.” But this is little more than the same feel-good rhetoric that drives pesticide bans in the West.

This isn't to say organic farming offers zero benefit; it certainly does, though its use has to be more targeted. According to agricultural economists Eva-Marie Meemken and Matin Qaim,

The conclusion that organic farming is not the global blueprint for sustainable agriculture does not mean that organic methods cannot be useful in specific situations. Under certain conditions, organic farming can be clearly positive for the environment ...

Experience shows that farmers can benefit as well when they are linked to certified markets in which consumers are able and willing to pay a significant price premium for organically produced foods. This is the case in certain high-value niches but less so in mass markets catering to lower-income population segments. [my emphasis]

That's a balanced, scholarly analysis of a complicated issue. But a universal organic policy that bans vital farming tools in the name of environmental protection lacks any such nuance. The welfare of Sri Lanka's farmers and consumers seems to have been overlooked, too. 


[1] the poverty-obesity paradox is a topic another day. My only point here is that most Americans are not going hungry.