Chemical/inorganic fertilisers were introduced to Sri Lanka in 1950 before which only organic sources were used. The main objective of the fertiliser subsidy programme is to encourage farmers to adopt high-yielding varieties with a view to attaining self-sufficiency in rice and also to ease the burden on the farmers’ budget. On the other hand, the subsidy scheme was initiated to make fertiliser more affordable to encourage its wider use for increasing agriculture productivity. Currently, most of the country’s required inorganic fertiliser is imported. The fertiliser subsidy in Sri Lanka was set in motion in 1962 at the onset of the Green Revolution which afterwards occupied a significant slot in government expenditure in the country. Three main types of fertilizers came to be used – urea to provide nitrogen (N), triple superphosphate (TSP) to provide phosphorus (P) and murate/muriate of potash (MOP) to provide potassium (K). Seven major phases in the provision of the subsidy since its inception in 1962 can be identified and are presented in detail below. The programme envisaged that an increased paddy production would lower the prices of paddy and rice, thereby making rice affordable to the consumer, other than reducing the cost of production. At the inception, a fixed fertiliser subsidy was introduced and different fertiliser types were subsidised at different rates. The subsidy was provided for all three main types of fertilisers: urea, TSP and MOP primarily targeted paddy. Until 1975, the subsidy level varied according to the type of crop. Since, this scheme was found to be unsuccessful as it allowed unauthorised leakages of fertiliser between agricultural sub sectors, in 1975, the government introduced a uniform subsidy scheme for all crop sectors. However, subsidy rates varied according to the type of fertiliser, with the rates subjected to revision over time, necessitated by the highly volatile prices of fertiliser in the world market.
