Acute Food Crisis May Hit Sri Lanka in August. What’s the New PM’s Plan?

Sri Lanka is experiencing a multidimensional economic crisis, which is compounded by food insecurity.

Food Crisis may hit Sri Lanka in August. 

(Photo: Aroop Mishra/The Quint)

Video Editor: Prajjwal Kumar

Producer: Smitha TK

Sri Lanka, the island nation that is gripped by an economic crisis, could face an acute food crisis by August, citizens fear. Sri Lankan Prime Minister Ranil Wickremesinghe has invited the top official of the United Nations World Food Programme (WFP) to visit the country as it grapples with an impending food shortage, with experts warning of a possible shortage of rice and other essentials in two months, because of lower production.

The island nation is experiencing a multidimensional economic crisis, which is compounded by food insecurity, rising protection concerns and shortages threatening lives and livelihoods.

The UN on Friday appealed for $47.2 million to provide life-saving assistance to crisis hit Sri Lanka, as it noted that shortage of medicines and surgical consumables will ease with the support of a credit line from India and other partners.

Sri Lankan PM Ranil Wickremesinghe is on very thin ice in terms of power and popular support.

At Least 50% Crop Losses This Year

The fall in rice and production of other essentials is being seen as an impact of President Gotabaya Rajapaksa's ban on fertilisers in April 2021.

“There has to be policy changes to ensure the increase in food production to avoid such a grim future for the people. But he is not the kind of politician who prioritises issues such as agriculture and the welfare of people,” said Ahilan Kadirgamar, Professor at University of Jaffna.

Food and energy price stocks were affected by the Ukraine war, according to the UN humanitarian office, OCHA.

Food and energy price stocks earlier this year were affected by the Ukraine war.

In May 2022, food inflation stood at 57.4 percent. Dearth of adequate supplies has led to 50 percent crop losses.

“There is shortage of imports like maize which is used in animal feed. Also, since the Sri Lankan rupee has depreciated against the American dollar, the prices are very high. The price of bread is three times more than what it was six months ago. There is shortage of milk powder. We are looking at a full-blown food crisis. We don't even have the foreign exchange to import food,” said Professor Kadirgamar.

Eight Lakh Government Employees to Be Fired?

About 62 percent of Sri Lankan workers are daily wage earners and majority of them are jobless today. Small and medium enterprises have said that they cannot pay wages to about 4.5 million workers.

Sri Lanka’s Ministry of Public Administration issued a circular on May 25 instructing the heads of state institutions to only employ duty officers “essential to maintenance of the public services.”

The decision was taken by the cabinet of ministers and came into effect on 26 May.

This is the first step towards downsizing the public sector which will see more than 8,50,000 government employees being fired, even as wages are expected to be cut. There could be increased workload on the remaining employees.

The cuts are part of the austerity measures suggested by International Monetary Fund (IMF). These are being implemented by President Gotabhaya Rajapakse and Prime Minister Ranil Wickremesinghe.

Easing Fuel Shortage Could Be the First Step to Soothe Public Anger

A crippling shortage of foreign reserves has led to long queues for fuel, cooking gas, and other essentials while power cuts and soaring food prices heaped misery on the people.

Towards the end of May, Sri Lanka saw fuel prices increase to an all-time high with petrol at Rs 420 and diesel at Rs 400 per litre.

The PM is seeking a total of $4 billion dollars from IMF, China, Japan to afford food and fuel.

“None of the boats have set sail. Over 400 boats are just tied here to the shore. For one litre of kerosene, you have to stand in the queue from 8 am,” said a fisherman from Jaffna.

Sri Lanka has been mulling different options to prevent fuel pumps from going dry, as the country faces a severe foreign exchange crisis to pay for its imports. Sri Lanka has been banking on an Indian Line of Credit (ILC) for fuel purchases since January.

The UN on Friday appealed for $47.2 million to provide life-saving assistance to crisis hit Sri Lanka.

The PM is seeking a total of $4 billion dollars from IMF, China, Japan to afford food and fuel.

Experts believe easing shortages could be the first step to soothe public anger.

“We need the government to supply diesel for us at Rs 110 like it was earlier. There are over five lakh fishermen in Guru Nagar and we will be able to go to the sea for fishing again and also sell fish at affordable rates,” said Chandrakumar, a fisherman.

PM on Thin Ice in Terms of Power & Support

In a month, the new government’s interim budget will be presented. Funds for infrastructure projects will be redirected into a 2-year relief programme.

But will this arrest the political, social and economic crisis in Sri Lanka?

Prime Minister Wickremesinghe is on very thin ice in terms of power and popular support.

Annual inflation is expected to rocket past 40 percent

“The rest of the world is laughing at our plight. The leader has to hand over the country to the young generation. We have no hope in this leader,” said Suren from Jaffna.

Ranil Wickremesinghe has been the PM five times since 1993. His rule saw an insider scam involving central bank bonds. He has been already accused of failing to prosecute members of the previous Rajapaksa regime.

“He should forget his family and his old ways and work for the welfare of the people. And if he does so he will always enjoy the support of the people,” said Paraman Palanivel, an employee of the Income Tax department.