Economic Feasibility of Alternative Technologies and Strategies for Sri Lanka’s Fertilizer Crisis: A Simulation Analysis for Paddy-Based Dry Zone Agricultural Systems

The government of Sri Lanka has introduced a mix of controversial fertilizer policies amid its economic crisis. The objective of this study is to assesses economic feasibility of a range of fertilizer technologies and strategies being introduced for paddy based dry zone agricultural systems of the country. A linear programming model was developed for a small paddy land holder considering maximization of profits as the objective and lowland and highland extents, labor, irrigation water, subsistence consumption, and financial resources allocated for fertilizers as constraints. The simulation scenarios included tax on urea-based fertilizers, increase in the cash grant provided to farmers, innovative marketing arrangements for environmentally friendly products and innovative fertilizer technologies. The results of the simulation experiments provide some quantitative estimates on the magnitude of changes in farm enterprise profits, nitrogen usage by the crops, and wastage of nitrogen from the system owing to the policy changes. The simulation exercises underscored the positive impact of incorporating slow-releasing fertilizer types on farm enterprise profits and nitrogen wastage from the system, contingent upon the financial viability of such fertilizers. The study offers insights into the interplay of policy interventions in shaping the profitability and environmental dynamics of dry zone farming in Sri Lanka.