AGRICULTURE SECTOR
THE HIDDEN VALUE OF WASTE
Akila Wijerathna unlocks a new wave of agricultural value through waste
Sri Lanka can unlock a new wave of value in agriculture by turning waste into inputs, energy and export products. A circular economy approach focusses on closing resource loops so that crop residue, manure and food waste become feed stocks for bio fertiliser, bioenergy, biochar, fibre and insect protein.
The bottom line is compelling because circular agriculture can reposition Sri Lankaas a resilient and premium producer. Lower dependence on imported fertiliser and fuel reduces cost volatility while traceable recycling facilitates access to premium markets that now audit supply chains for sustainability performance.
Agriculture still anchors rural livelihoods and national exports, yet farms and estates are exposed to three persistent risks: input price swings, rising waste handling costs, and climate variability that stresses soil and water. Circular practices directly address these pressures.
Farm nutrient recovery reduces the cash burn on synthetic inputs, and residue to energy projects hedge against fuel and grid instability. Documented circular practices also support claims that help open doors in the EU and advanced Asian markets.
Value emerges in specific loops that suit local crops and industries. In the case of paddy and other grains, straw can be carbonised into biochar that improves soil structure and locks carbon in the ground for years.
Rice husk can fuel small boilers or be refined into silica products that feed construction value chains. Mushroom growers already buy straw as substrate, which offers farmers a cash outlet soon after harvest. On tea estates, pruning provides clean fuel for biomass boilers while factory waste can be composted and wastewater partially recovered for process use.
The coconut triangle is a ready platform for higher value circular products. Husks and shells already support coir, peat and activated carbon businesses; but there is room to add shell biochar, compostable moulded items and shared effluent treatment to raise returns.
Livestock and poultry units can supply anaerobic digesters that help produce biogas for heat or power. ‘Digestate’ byproduct is a nutrient rich fertiliser that can be sold in liquid form or as pellets for convenience.
Cluster models that aggregate between 300 and 500 small farms improve feedstock certainty, and reduce unit costs through professional operations, which in turn boosts revenue.
Investable business models are clear: a cluster biogas hub can buy manure and litter under simple collection contracts, sell power under a purchase agreement, and market digestate to nearby paddy and horticulture farms on forward contracts.
A coconut circular park can set up coir spinning, peat processing, shell biochar and activated carbon facilities with shared lab services and water treatment. Black soldier fly (Hermetia illucens) facilities convert urban food waste into insect protein for aquaculture and poultry while the frass residue serves as predictable organic fertiliser.
Policy signals should be stable and science based. Tax incentives on circular equipment and green credit lines for processors will attract private investment. Predictable feed in tariffs for biogas to power and purchase agreements for compressed bio methane can firm up revenue.
Municipal rules that mandate source separation of organic waste create a reliable pipeline for anaerobic digestion and composting plants.
Digital traceability for recycled nutrients, emissions reduction and soil organic carbon will enable producers to convert performance into data that buyers and lenders can trust. Clear standards protect consumers while supporting reputable operators.
Implementation follows a practical playbook. Map feedstocks by season and radius, and document moisture, contamination and competing uses. And also match feedstocks to technologies such as anaerobic digestion, composting, biochar, black soldier fly, combined heat and power or fibre processing.
Secure off-take with forward contracts for bio fertilisers and energy, and supply commitments for coir and activated carbon. Stack finance by combining concessional climate funds with commercial bank debt and stage projects with modular assets so that risk is managed step by step.
Operate with laboratory testing and batch traceability; then measure and report using simple monitoring systems that capture nutrient flows, emissions, soil health and jobs.
Partnerships such as farmer producer groups and estate managers can organise supply and off-take while municipal authorities provide source separated organics. Universities can run pilots, offer third party testing, and train operators and extension officers.
Equipment providers and agri tech startups can deliver simple interfaces and remote monitoring that reduce downtime. Local banks and development finance institutions can co-design instruments that suit cash flows in agriculture rather than generic industry templates.
