by Economic Affairs Editor
Every few years a new development slogan arrives in Sri Lanka, wrapped in glossy reports and the logos of foreign agencies. This time it is the “circular economy.” The pitch sounds noble: close material loops, reduce waste, make production sustainable. Yet beneath the elegant charts and consultant language, the latest EU-sponsored circular-economy strategy for Sri Lanka’s food sector risks becoming another exercise in policy theatre—one that places new burdens on farmers while rewarding the same constellation of intermediaries, NGOs, and well-connected firms who always manage to capture donor money.
The report is full of technocratic optimism. It promises green finance, sustainable packaging, cold-chain efficiency, and access to European markets for “circular” food products. But it speaks in the vocabulary of investors, not cultivators. Every proposed intervention assumes that local producers are miniature corporations able to absorb the cost of biodegradable packaging, certification audits, and sophisticated waste-management systems. The financing model privileges projects worth half a million dollars or more, aimed at “growth-stage” companies. That is not the world of the small onion farmer in Dambulla or the vegetable growers in Nuwara Eliya. It is the world of exporters, processors, and urban entrepreneurs with English-language accountants and project managers who can write proposals for GIZ or Expertise France.
When donors talk about “bankable pipelines,” they rarely mean actual farmers. The criteria—third-party verification, climate-impact measurement, due diligence reports—create a moat that only large firms and a handful of NGOs can cross. The report itself concedes that “most projects are at ideation stage and lack financial maturity.” The polite translation is that small producers are too poor and informal to qualify. So the money flows back to Colombo through consultancy contracts and awareness workshops. Farmers, meanwhile, are told to modernise, innovate, and go circular—without access to the finance or infrastructure required to do so.
The language of sustainability hides a more uncomfortable truth: these initiatives import not only European money but European regulatory models. The new Packaging and Packaging Waste Regulation in the EU, for instance, mandates compostable or recyclable formats by strict deadlines. For Sri Lankan exporters, that means buying imported packaging materials that cost two to three times more than conventional plastic. The local Food (Packaging) Regulations still forbid recycled plastics for food use, so producers are trapped between two incompatible regimes. Large firms can hire lawyers and consultants to navigate this maze. Smallholders cannot. The consequence is predictable: the exporters consolidate, the farmers become subcontractors, and another layer of dependency is born in the name of green progress.
Circular economy rhetoric also ignores the basic political economy of agriculture in Sri Lanka. The farm-gate price is not destroyed by waste or inefficiency; it is destroyed by market manipulation. A few powerful importers dominate key commodities—onions, potatoes, pulses—and time their shipments to coincide with local harvests, flooding the market and driving prices down. Customs and the Ministry of Trade issue “emergency” import waivers at suspiciously convenient moments. Taxes and levies move not with the needs of producers but with the influence of traders. When farmers protest, officials lecture them on global competitiveness and the virtues of free markets. The circular-economy agenda, instead of addressing this structural capture, builds new dependencies by tying farmers to certification schemes and donor-approved supply chains controlled by the same intermediaries.
The report praises “shared cold-chain infrastructure” and “co-investment models,” but offers no plan for who will own and govern those assets. Experience shows what happens: cooperative ownership fails for lack of credit, and facilities are leased to private firms who charge rents the farmers cannot afford. Donor money builds the asset; the asset then migrates to private hands. Even when pilot projects start with good intentions, the operational funding and bureaucratic thresholds steer them toward the usual NGO network that already manages international grants. Thus, the circular economy reproduces the same circular flow of funds—from Europe to consultants to workshops and back to glossy progress reports.
Meanwhile, the small farmer remains trapped in a cycle of uncertainty. When a bumper crop arrives, imports crush the price; when imports are curbed, transport costs and post-harvest losses eat the margin. Government promises of price stabilisation come and go with elections. The technocrats who draft circular-economy strategies seldom acknowledge that before farmers can think about “valorising side streams” or “investing in bio-based packaging,” they need a fair market. A policy that allows import monopolies to dictate prices while imposing new compliance costs in the name of sustainability is not reform; it is greenwashing layered over structural exploitation.
Even the financing mechanisms in the strategy betray a deep misunderstanding of local realities. Development finance institutions prefer dollar-denominated loans, long approval chains, and risk-weighted conditions that no rural borrower can meet. Blended-finance windows sound inclusive but in practice funnel funds through commercial banks that already shun agriculture. The result is another façade of inclusion: glossy brochures showcasing “inclusive green growth” while the actual credit goes to urban agribusiness ventures. The report’s own numbers reveal this bias, but it hides behind the convenient language of “pipeline maturity.”
What is missing is political honesty. Sustainable agriculture cannot be built on imported jargon or donor metrics. It requires administrators with integrity, not pliant technocrats who treat food as a spreadsheet variable. It requires protection against predatory imports when harvests are strong, and transparent mechanisms to adjust tariffs when supplies fall. It requires public investment in storage, processing, and logistics that serve producers first, not middlemen. None of this appears in the circular-economy narrative because it is politically messy and financially unprofitable for the actors driving the agenda.
The tragedy is that many of the young farmers who genuinely want to modernise will now spend months attending donor workshops on “innovation ecosystems,” filling out forms for grants that never reach them, while the real levers of the market remain untouched. Each new international project raises expectations, delivers PowerPoint promises, and fades into the bureaucracy. The pattern repeats: the language of reform, the machinery of capture.
Sri Lanka does need environmental responsibility and better resource use. No one disputes that waste and inefficiency plague the food system. But sustainability cannot be imposed through imported checklists that ignore power relations. A truly circular economy would begin by closing the loops of accountability—by preventing the same elites who profit from cheap imports and donor contracts from dictating the terms of “green” transformation. Until that happens, the circular economy will remain what it already is: a circle of money and influence spinning far above the fields it claims to save.
