Impact of the Fertilizer Import Ban in 2021 on Paddy Yield and Farm Economics in Polonnaruwa District, Sri Lanka: A Pooled Cross-Sectional Analysis

High-yielding paddy varieties mainly depend on chemical fertilizers to enhance productivity. Since the introduction of the fertilizer subsidy policy in 1962, Sri Lanka has depended heavily on imported chemical fertilizers. However, the sudden fertilizer import ban implemented in May 2021 created significant challenges for agricultural production and raised concerns regarding food security and farmers' economic well-being. Although the ban was lifted in November 2021, the policy highlighted the vulnerability in the agricultural sector to abrupt changes in fertilizer availability. This study evaluates the impact of the fertilizer import ban in Polonnaruwa district, one of the country's major paddy-producing areas. Pooled cross-sectional data collected from 253 paddy farmers in both the Yala and Maha seasons by the Department of Agriculture between 2018 and 2023 were used for this study. Data were analyzed using the Cobb-Douglas production function, and paddy yield was used as the dependent variable, while independent variables included seed rate, machinery cost, weedicide cost, fertilizer cost, labour, and total chemical fertilizer used for paddy farming. A dummy variable was used to denote the ban period, allowing for an assessment of its impact on production outcomes. The study results indicate a 24.5% reduction in paddy yield during the period affected by the fertilizer ban. Additionally, the findings reveal that a 1% decrease in fertilizer usage causes a reduction in paddy yield by 0.43%. Further, the impact of gross margin and the benefit-cost ratio was also evaluated. Although production was reduced during the ban period, the high farm-gate price partially mitigated the economic impact on farmers. This study suggested that analogous policy interventions in the future be implemented through a phased and evidence-based approach, supported by rigorous scientific assessment and inclusive stakeholder engagement. Such an approach is essential to ensure policy coherence and to safeguard long-term economic stability, political feasibility, and social sustainability, while mitigating potential adverse impacts on the agricultural sector.