Beneath the glossy branding of sustainability and circular economics, Sri Lanka’s rural farmers now face the risk of deeper poverty, rising production costs, and a new web of foreign-funded dependency disguised as environmental reform.
Every few years Sri Lanka is introduced to a fresh development slogan, wrapped in colourful reports, consultant-crafted diagrams, and the polished language of global agencies. This year the fashionable phrase is the circular economy. It is marketed as a noble vision that urges nations to reduce waste, close material loops, and adopt more sustainable production systems. The message sounds progressive and even compassionate, but beneath the immaculate charts and carefully chosen terminology lies a strategy that threatens to become another exercise in policy theatre. The newest EU-sponsored circular economy proposal risks creating heavier burdens for farmers while rewarding the familiar network of Colombo based intermediaries, donor linked NGOs, and private sector elites who traditionally navigate and benefit from foreign funded development programmes.
The report is overflowing with technocratic optimism. It promises green finance, circular agriculture, sustainable packaging, improved cold chain efficiency, and access to European markets for products that comply with new environmental standards. Although the language is written to sound inclusive, it clearly speaks the vocabulary of investors and international partners rather than cultivators. Each proposed intervention seems to assume that Sri Lankan farmers are miniature corporations with the financial muscle to absorb the costs of biodegradable packaging, third party certification audits, and advanced waste management systems. The financial models favour projects above half a million dollars, structured for established companies described as growth stage enterprises. This vision does not reflect the lived reality of the small scale onion farmer in Dambulla or the vegetable farmer in Nuwara Eliya. It instead reflects the world of exporters, urban processors, and entrepreneurs with the English language skills and professional networks required to submit proposals to agencies like GIZ or Expertise France.
Whenever donors refer to bankable pipelines, they seldom refer to actual farmers. Their selection criteria include third party verification, climate impact calculations, detailed due diligence reports, and other requirements that create a barrier only large firms and a handful of NGOs can cross. Even the report itself reluctantly admits that most projects remain at the ideation stage and lack financial maturity. The translation is simple: small scale farmers are too poor, too informal, and too disconnected from the formal financial system to qualify for these opportunities. As a result, funding gravitates back to Colombo where consultancy contracts, awareness workshops, and policy dialogues consume the bulk of donor spending. Farmers meanwhile are instructed to modernise, innovate, and adopt circular practices without being given the infrastructure, credit, or regulatory environment required for success.
Behind the appealing language of sustainability lies a far more troubling truth. These initiatives do not merely introduce European money to Sri Lanka; they import entire European regulatory frameworks. The EU’s new Packaging and Packaging Waste Regulation is a prime example. It requires all exported goods to be packaged in compostable or recyclable materials within strict deadlines. For Sri Lankan producers, this means investing in imported packaging materials that are two or three times more costly than conventional plastic. Complicating this further, Sri Lanka’s Food Packaging Regulations prohibit recycled plastics for food related use. Producers are therefore trapped between two conflicting regulatory systems. Larger exporters have the financial and legal resources to navigate this maze. Smallholders do not. The predictable outcome is consolidation among exporters, downscaling among farmers, and the creation of an additional layer of dependency justified by the rhetoric of green progress.
Circular economy narratives also ignore the core political economy governing Sri Lankan agriculture. Waste and inefficiency are not the main forces draining farmers of income. The primary culprit remains market manipulation. A handful of politically connected importers dominate trade in key commodities such as onions, potatoes, and pulses. By timing large shipments to coincide with local harvests, they flood the market and push farm gate prices down. Government institutions including the Ministry of Trade and Customs frequently issue emergency import waivers at suspiciously convenient moments. Taxes and levies fluctuate not according to the needs of farmers but according to the influence exerted by traders. When farmers protest these practices, government officials lecture them about the virtues of free markets and global competitiveness. Instead of challenging the structural capture of markets, the circular economy agenda introduces new layers of dependency by tying farmers to certification schemes and donor approved supply chains dominated by the same intermediaries who already extract value from the system.
The report praises concepts such as shared cold chain infrastructure and co investment models, but fails to explain who will own and manage these assets. Past experience shows that cooperative ownership collapses due to lack of credit, and these facilities end up leased to private companies that charge rents farmers cannot afford. Donor funds are used to construct the infrastructure, but ownership eventually shifts to private hands. Even when a pilot programme begins with strong intentions, the bureaucratic hurdles and operational demands push these assets toward the usual network of NGOs that already manage international funding channels. In effect, Sri Lanka’s circular economy becomes a circle of European money circulating from foreign institutions to Colombo based intermediaries and back to Europe in the form of progress reports, while farmers remain spectators to their own development narrative.
Meanwhile, small scale cultivators struggle with the same cycle of uncertainty. If a bumper crop arrives, importers use emergency permits to crash prices. When imports are restricted, transport costs and post harvest losses consume profits. Government promises of price stabilisation surface during election seasons but fade soon after. The technocrats authoring circular economy strategies rarely consider that before farmers can invest in side stream valorisation or bio based packaging, they need a fair and predictable market. A policy that enables import monopolies to dictate prices while adding new compliance costs under the banner of sustainability will not reform agriculture. It will deepen exploitation by rebranding an unequal system as environmentally progressive.
The financing mechanisms proposed in the strategy reflect a misunderstanding of rural economic realities. Development finance institutions favour dollar denominated credit, multi stage approval chains, and risk weighted requirements that few small scale farmers can meet. Blended finance solutions appear inclusive in theory but in practice route funds through commercial banks that have long avoided agricultural lending. The result is a system that publicly celebrates inclusive green growth while privately channelling capital toward urban agribusiness ventures. The report’s own numbers acknowledge this imbalance, but it obscures the truth through the polished language of pipeline maturity.
What continues to be missing is political honesty. Sustainable agriculture cannot be engineered through imported jargon, glossy presentations, or donor driven metrics. It requires decision makers with integrity, not technocrats who treat food production as an abstract line in a spreadsheet. It requires protection against predatory import practices during strong harvests, and a transparent mechanism to adjust tariffs when supply fluctuates. It requires public investment in storage, processing, and logistical systems that prioritise producers rather than middlemen. None of these critical elements appear in the circular economy blueprint because they are politically sensitive and financially inconvenient for the institutions promoting this agenda.
The greater tragedy is that many young farmers who genuinely want to modernise will now spend months attending donor organised innovation workshops, filling applications for grants that never reach them, while the actual mechanisms governing the market remain unchanged. New projects will raise expectations, deliver attractive PowerPoint presentations, and eventually fade into bureaucratic obscurity. The cycle repeats: the language of reform masks the machinery of institutional capture.
Sri Lanka undeniably needs greater environmental responsibility and more efficient resource management. Waste and inefficiency are real problems within the food system. However, sustainability cannot be imposed through imported frameworks that disregard local power dynamics. A genuine circular economy for Sri Lanka must begin by closing the loop of accountability. This means preventing the same economic elites who profit from cheap imports and donor contracts from dictating the terms of green transformation. Unless this fundamental imbalance is addressed, the circular economy will continue to be what it already is: a circle of money, influence, and consultant driven narratives spinning far above the fields it claims to protect.
