By Michael Shellenberger, July 12, 2022
Sri Lanka has fallen as, last week, thousands of protesters stormed the presidential palace and ousted President Gotabaya Rajapaksa.
The proximate reason for the chaos is that the nation is bankrupt, suffering its worst financial crisis in decades. Millions are struggling to buy food, medicine and fuel. Between June 2021 to June 2022, food prices rose by 80 percent. Last month, annual inflation hit nearly 55 percent. Since the start of the pandemic, half a million people have fallen into poverty.
The underlying reason for the fall of Sri Lanka is that its leaders—starting with former President Maithripala Sirisena and continuing with his successor, the deposed Rajapaksa—fell under the spell of Western green elites peddling organic agriculture and “ESG,” which refers to investments made following supposedly higher Environmental, Social, and Governance criteria. Sri Lanka has a near-perfect ESG score of 98—higher than Sweden (96) and the United States (51).
What does having such a high ESG score mean? In short, it meant that Sri Lanka’s two million farmers were forced to stop using fertilizers and pesticides, laying waste to its critical agricultural sector.
To be sure, there were other factors behind Sri Lanka’s fall. But the biggest problem was Sri Lanka’s chemical fertilizer ban, which passed last year and was central to the country’s effort to comply with ESG.
crop losses are catastrophic
The numbers are shocking.
One-third of Sri Lanka’s farm lands were dormant in 2021 due to the fertilizer ban. Over 90 percent of Sri Lanka’s farmers had used chemical fertilizers before they were banned. After they were banned, an astonishing 85 percent experienced crop losses. Rice production fell 20 percent and prices skyrocketed 50 percent in just six months. Sri Lanka had to import $450 million worth of rice despite having been self-sufficient just months earlier. The price of carrots and tomatoes rose fivefold. All this had a dramatic impact on the more than 15 million people of the country’s 22 million people who are directly or indirectly dependent on farming.
Things were worse for smaller farmers. In the Rajanganaya region, where the majority of farmers operate 2 1/2-acre lots, families reported 50 percent to 60 percent reductions in their harvest. “Before the ban, this was one of the biggest markets in the country, with tons and tons of rice and vegetables,” one farmer said earlier this year. “But after the ban, it became almost zero. If you talk to the rice mills, they don’t have any stock because people’s harvest dropped so much. The income of this whole community has dropped to an extremely low level.”
But the damage to tea was the key to Sri Lanka’s ruin. Before 2021, tea production generated $1.3 billion in exports annually. Tea exports paid for 71 percent of the nation’s food imports before 2021.
The fertilizer ban, starting in April 2021, changed everything. Four months after the ban took effect, the president, realizing that things were not going according to plan, lifted the ban on the import of chemical fertilizers—and then, two days later, reinstated it.
This article has been edited. To read the original Shellenberger post, click here.