This dissertation attempted an answer to the question ‘why the subsidy on fertilizers for rice in Sri Lanka is continued amidst a number of sustainability concerns?’ There is ample evidence to point out why the long-running subsidy schemes should end; but they continue. This study locates the problem beyond its current definition that largely focuses on the gains and losses of subsidies, to incorporate the roles of stakeholders and their environment in deciding the important causes of subsidies. Using the current rice fertilizer subsidy scheme that started in late 2005 as the case, this study examined the roles of two key stakeholder groups rice farmers and agricultural bureaucrats and researchers – set in the complex interplay of history, institutions, ideas, leadership, different actors, and external influences in constituting and mediating the rice fertilizer subsidy policy in Sri Lanka.
Guided by the foundations of post-positivism, critical realism, and systems thinking, the study used a mixed method approach consisting of both quantitative and qualitative methods. Data was collected from 22 semi-structured interviews with agriculture bureaucrats and researchers, 189 survey responses from rice farmers, and three focus groups involving 24 agriculture bureaucrats and researchers. The data analysis was followed by a critique of the roles of stakeholders and their environment.
The key findings of this study suggest that the persistence of the rice fertilizer subsidy in Sri Lanka is best explained by a model of shared food preference. The social, political, and economic conditions in Sri Lanka engendered and accommodated ideals that elaborated the role of rice unparalleled to its economic value. Nurtured by this environment, both farmers and agriculture bureaucrats and researchers have, for different reasons, constituted a support for subsidized fertilizers. At the operational scale, the rice fertilizer subsidy of Sri Lanka has been an experience very similar to those subsidy schemes in other developing countries generating benefits in fertilizer usage and rice production, but falling below its full potential due to limitations in its own operational mechanism and deficiencies in its enabling environment. Constrained by the diminishing soil conditions – perceived to be the most critical among all variables deciding rice yields – farmers found the perceived benefits of the subsidy to be beyond material measure, mediating a strong support for its continuation. The agriculture bureaucrats and researchers’ support for the fertilizer subsidy was largely driven by ideals of nationalism, development, and nutrition. To these ideals achieving self-sufficiency in rice was of the highest priority. Science’s contribution to policy was severely constrained by this cultural construct of rice and hence the policy choices. Therefore, the study concludes that the reason for continuing the rice fertilizer subsidy scheme in Sri Lanka is its people’s intimate preference for rice that is shared across the social spectrum. Being a shared preference, rice evaded scrutiny and debate over any topic that questioned its suitability or potential, making it taboo. The rice fertilizer subsidy is only a symptom of this unconditional association Sri Lankans have with rice, limiting much of its potential for development. This not only explains why the subsidy persists but also why an exit is difficult.
A key recommendation of this study is the need for the agriculture sector to understand its context. It has to adapt to the changing dynamics of the rural sector and the real risks that involve not only food markets but beyond, both at the local and international scales. For effective policy reforms, including a solution to the subsidy problem, three sensitive topics require an open dialogue. These topics include the role of rice in science, the role of science in Sri Lankan agriculture, and the role of agriculture in the Sri Lankan economy. These constitute an enormous challenge in the current context.