Presidential Speech – 2023

Policy Analysis in the Face of Multiple and Overlapping Crises: The Role of Agricultural Economists

It is with great honour I deliver the presidential address of the 17^th Annual Research Forum of the Sri Lanka Agricultural Economics Association (SAEA) focusing on “Policy Analysis in the Face of Multiple and Overlapping Crises: The Role of Agricultural Economists”. The SAEA Annual Research Forum (ARF) is a testament to our collective commitment to advancing knowledge, fostering innovation, and steering our agricultural landscape towards a more inclusive and sustainable future.

Over the 30 years of the history of SAEA, our research and related work have been tailored to address emerging global challenges and the current agricultural economics issues, with a special focus on the agri-food sector of the country. The published research in our journal, the Sri Lankan Journal of Agricultural Economics (SJAE), and the proceedings of ARF provide policymakers with evidence-based insights and analysis for informed decision-making.

We are fortunate to make collaborations with the United Nations World Food Program as a strategic move allowing both entities to mutually benefit through collaborative projects and research, enhancing visibility within the agricultural economics community, and greater contributions to discussions and developments in the agri-food sector. To further strengthen the bond, SAEA would allocate space in the 2024 edition of the SJAE for a paper discussing WFP’s investment in food systems and its relation to Sustainable Development Goal 2, creating a world free of hunger by 2030. To remain relevant for current and future members of the association, we must continue to adapt to understand the heterogeneous needs of the economy, environment, and society.    

Agriculture has always been in a unique position in our economy, irrespective of the state of development, providing sustenance livelihoods, and as a foundation for our nation’s prosperity. As we gather here to discuss the latest developments and challenges currently face and to disseminate the outcomes of agricultural economics research and innovation in the time of emerging country from the unprecedented economic crisis, it is crucial to recognize the pivotal role that agricultural economists can play in shaping the future of agri-food sector. 

Sri Lanka like many other countries in the world faces multiple and overlapping challenges from the economy and environment that directly affect the agricultural sector. Although the economy grew fast after the long-continued civil war in 2009, the structural weaknesses caused numerous economic shocks that put the economy in crisis in the last five years. Eventually, the severe and unprecedented macroeconomic crisis happened in 2022 resulting in a 7.8% contraction in real GDP, which was more than twice as high as the impact of COVID-19, the worst-ever pandemic in history. Looking at the impacts of the macroeconomic crisis on the agricultural sector, acute shortages, and spikes in the prices of food and agricultural inputs, severely compromised the economic activity with major disruptions to agricultural production. The United Nations World Food Programme’s Household Food Security Survey highlights that about 33% of were suffered from acute food insecurity in 2022, while 68% attempted to restore food-based coping strategies such as limiting portions and reducing the number of meals eaten per day. Since prices rise when the incomes of many remain unchanged, it has given rise to doubling the poverty rates from 13% in 2021 to 25% in 2022.   

Apart from the post-pandemic challenges and consequences of the economic downturn of the country, the challenges from the environment are evident and the adverse impacts of climate change have become more pronounced over the last decade. The estimations on climate change predict that the temperature rise will be marginally lower than the global average. However, agricultural production is severely affected by extreme weather events whose frequency has increased in the past few decades. According to the Global Climate Risk Index 2020, Sri Lanka could lose USD 3,626 million annually attributed to climate-induced disasters. Also, the World Bank estimates show that 7.7% of the country’s GDP (approximately USD 50 billion) would need to be allocated to face climate disasters by 2050. These climate-induced disasters have adversely affected Sri Lanka’s economic growth while the vulnerable communities, including a majority of rural agricultural people, are suffering from deteriorating welfare. Also, sustainable intensification of agriculture to feed a massive population in the future and climate change adoption have become inextricably linked aspects whose trade-offs need to be wisely managed. 

In an era marked by such multiple and overlapping crises, including but not limited to climate change, economic uncertainties, global pandemics, calamities in the world market caused by Ukraine and the Palatine war, export bans etc., the role of agricultural economists becomes even more valuable. We as agricultural economists can play a vital role in addressing and mitigating these crises by providing valuable insights, formulating scientific evidence-based policies, and contributing to the development of resilient and sustainable agri-food systems.

One of the key areas of research I would like to focus on is policy analysis and reforms. It is important that agricultural economists critically analyze effectiveness, efficiency, equity concerns, and potential impacts of policies, programs, and projects implemented by governments and non-governmental agencies in times of crises, both ex-ante and ex-post. That would lead us to offer some recommendations for reforms in addressing both immediate challenges and long-term sustainability. As can as possible, we should consider incorporating novel approaches and techniques in policy analysis to make it more comprehensive and complete.

The concept of the interdisciplinary approach can be incorporated into our current policy analysis that involves drawing appropriate solutions from several disciplines to revisit and redefine problems by going beyond the normal boundaries and finding solutions using a new understanding of complex and dynamic situations. At times of multiple and overlapping crises, the impacts are complex and hence it requires consideration of various direct and indirect effects of policies and the way they affect different agents, sectors, the environment, and the economy as a whole. Incorporating an interdisciplinary approach in our analysis allows us to gain a comprehensive understanding of the crises and bring diverse perspectives. Also, mixed-method research that combines both qualitative and quantitative research techniques enables us to analyze policies by giving a more holistic understanding of the crises.   

The use of experimental economics as a research method, that involves controlled experiments to study economic behaviour and theories will be a powerful tool for gaining insights into the potential outcomes of policy interventions. It allows us to design experiments that simulate the impact of proposed policies in a controlled environment. Thereby we can evaluate the potential effectiveness and unintended consequences of different policy options. Furthermore, these experimental techniques will be a good platform to study human behaviour in economic decision-making. As we all know, policy analysis and most of our research often rely on assumptions about how individuals will respond to changes or policies, experiments can uncover those behavioural insights, that enable us to refine those policies to better align with actual human behaviour.

Another innovative approach that can stimulate and integrate with our in-depth policy analysis is the use of dynamic simulation models. As our economic, environmental, and agri-food systems are comprised of numerous complexities and interdependencies within systems over time, capturing such effects could explore the long-term implications of policies and assess their resilience in the face of changing conditions.

Apart from that, the knowledge of data science empowers us to extract valuable and meaningful insights from existing data enabling effective policy analysis and drawing recommendations for the agri-food sector. Furthermore, the use of advanced techniques like machine learning algorithms and predictive modelling, those gifted by the Artificial Intelligence (AI) approach undoubtedly has the potential to revolutionize our research in the next century. 

In conclusion, I would say that policy analysis in an era of multiple and overlapping crises is very complex and hence our role as agricultural economists is dynamic and multifaceted. Our expertise is crucial for informing policies, guiding policymakers of the country, and fostering resilience in the face of challenges that impact the agri-food sector of the country. I believe that the insights for policy analysis delivered here are highly relevant to the SAEA’s work and way forward, particularly in addressing more effective and adaptive policymaking. 

I wish SAEA ARF 2023 all success. 

Sumali Dissanayake (PhD)
President SAEA 2023