Sri Lanka urges farmers to plant more rice amid crisis
Sri Lanka is calling on farmers to grow more rice as it faces its worst economic crisis in more than 70 years. The country’s agriculture minister made the appeal as he said the country’s “food situation is becoming worse”.
It comes as severe shortages of essentials, including food, helped to push inflation, the rate at which prices rise, to a new record high. Also on Tuesday, the government raised taxes to help pay for critical purchases, including fuel and food.
The island nation of 22 million people has been hit hard by the pandemic, rising energy prices, and populist tax cuts. A chronic shortage of foreign currency and soaring inflation has also led to a shortage of medicines, fuel and other essentials.
Agriculture Minister Mahinda Amaraweera told journalists “it is clear the food situation is becoming worse”. “We request all farmers to step into their fields in the next five to ten days and cultivate paddy [rice],” he added.
Sri Lankan officials have been looking for ways to boost food production, as Prime Minister Ranil Wickremesinghe has warned of severe food shortages by August.
The country is also applying for assistance from a South Asian food bank, which has supplied rice and other goods to countries in need, the Financial Times newspaper reported.
Food commissioner J Krishnamoorthy said her department had “just started the process” of asking the South Asian Association for Regional Cooperation (SAARC) for “food bank assistance”. Krishnamoorthy added that Sri Lanka was seeking around 100,000 metric tonnes of food in the form of donations or subsidized sales.
On Tuesday, the Sri Lankan government announced an immediate increase to value added tax (VAT) from 8% to 12%. The move is expected to boost government revenue by 65bn Sri Lankan rupees ($179.9m; £142.7m). It also said corporate tax would rise in October from 24% to 30%.
Also on Tuesday, official figures showed that Sri Lanka’s rate of inflation rose to a record 39.1% in May, from a year ago. It had reached a previous high of 29.8% in April. Inflation reduces the purchasing power of money since more money is now needed to buy the same items.
Last month, Sri Lanka defaulted on its debt for the first time in history, when grace period to come up with $78m of unpaid debt interest payments expired. Defaults happen when governments are unable to meet some or all of their debt payments to creditors.
It can damage a country’s reputation with investors, making it harder for it to borrow the money it needs on international markets, which can further harm confidence in its currency and economy.
SOURCE: NEWS AGENCIES