brand logo

Not possible to ration food items at present: Lasantha Alagiyawanna 

04 Sep 2021

  • Importers, traders, intermediaries creating artificial shortages
  • Over 1,000 sugar storage facilities, 4,000 rice storage facilities raided
  • Previous measures to control prices and prevent hikes not successful
  • There are pros and cons to restricting food imports; not 100% successful 
By Yoshitha Perera  Reports of shortages in sugar, liquefied petroleum (LP) gas, and milk powder have caused further concerns among a public heavily burdened by the skyrocketing prices of essential goods. However, the Government maintains that there are sufficient stocks of these items while charging that importers, traders, and intermediaries were hoarding such stocks to create artificial shortages. In an interview with The Sunday Morning, State Minister of Co-operative Services, Marketing Development, and Consumer Protection Lasantha Alagiyawanna assured that the Government would introduce a clear plan within this week to address these issues. Following are the excerpts from the interview:   There is a shortage of essential food items in the market and consumers are currently experiencing price hikes. What are the recent measures taken by the Government to control this situation?  It is important to note that we are not living with ordinary conditions at present; we are experiencing travel restrictions and lockdowns due to the rapid spread of Covid-19. The whole world is experiencing this pandemic situation and an economic crisis like none in recent history, and we have to understand this. Currently, there is a food shortage only of goods for which the Government has imposed controlled prices. A control price is set to protect the consumer, and we need to have private sector importers and wholesalers providing a better service for the consumers. However, some do not assist in this mechanism. Accordingly, we have to make laws to take legal action against them.  For example, we’ve asked that sugar storage facilities be registered, yet there are still some that remain unregistered. The President even had to publish a gazette notification as a solution to this arbitrary control of essential food items by certain people in private and state sectors.  Why are the measures taken to control the current price hikes not showing results?  Previous measures to control the price hikes have not been successful, and we accept that. However, so far, we have conducted more than 1,000 raids at sugar storage facilities and about 4,000 raids at rice storage facilities; yet, there was no price control in the market. The current fine for selling at higher prices is Rs. 2,500, and I believe that wholesalers and retailers are taking this lightly, and habitually increasing prices without any control. We understand that the existing laws to protect consumers are inadequate.  Therefore, for the first time, we will present a proposal to increase the fine up to Rs. 100,000 during the next parliamentary session. We have also initiated the process of amending 72 sections of the Consumer Affairs Authority (CAA) Act, and we hope to implement these amendments by November.  Are there any moves to ration essential food items?  At present, we have not reached such a decision. Additionally, it is not possible to do that in a market like this. The only way is to reduce the prices of essential goods and make them available in the market. That is the only way to meet the existing consumer demands.  Essential food importers say the Government’s cure-all is imposing import restrictions. In this situation, how will the Government handle the current food shortage in the market?  There are several purposes for restricting imports. One is to increase domestic production; and another objective is to reduce the unnecessary outflow of foreign exchange. The import restrictions were not imposed to punish anyone, but rather to prioritise the protection of the consumer by increasing domestic production. There are pros and cons to that process. We are not saying that this is 100% correct, but we will take steps to move forward with less shortcomings.  There are claims that the reduction of tax on daily-use products, especially sugar, didn’t benefit the consumer. What is your view on this statement?  As for sugar, it was in the market for Rs. 135 per kg, and it was during this period that the Government reduced the sugar tax by Rs. 49.75 per kg. Apart from Sathosa and co-operatives, we were not able to do this (pass on the benefit to the consumer) in the market. We have to accept that.  Also, during this period, sugar was sold at Rs. 110 and Rs. 115; and even though the sugar tax was reduced, the consumers were not able to get sugar at Rs. 85. But due to the reduction in taxes, the consumer got an advantage of Rs. 30-35.  Importers of sugar are not paid in dollars today; they get paid in 180 days. Due to the increase in the value of the dollar and the increase in the price of the global market, sugar is being sold at a higher price. But we cannot justify this situation. Now, this has become an unfair charge.   The CAA recently sealed several warehouses containing sugar, and there was news of an alleged sugar scam in the country some months back. How do you explain these situations?  We have to do a separate calculation on this. We reduced the sugar tax, which was at Rs. 50, to Rs. 0.25. We managed to reduce the tax by Rs. 49.75.  For example, if 1,000 kg of sugar was imported, after this tax concession was implemented, the tax concession would be Rs. 49,750. The question being asked is, who took it?  Fraud and unlimited profiteering are two different things. Due to the reduction in taxes, the revenue of the Government decreased. So, if this is a scam, this money should go to someone. But how did that happen?  It would be better if the case in this regard is heard soon in the Supreme Court. We need to talk about this separately. It is very clear that due to the reduction in this tax, the consumer got an advantage of about 60% of it. In this process, the Government also got 10-15%. Another 25% was gained by some people. A significant number of people made large imports due to the reduction in sugar taxes. The Controller of Imports and Exports imposed a fine of Rs. 1 billion on these people. That’s why I said that the Government also got some revenue from this. I believe once this matter is heard soon in the Supreme Court, we can form a correct opinion on it.  Do you think the recent price hike in LP gas addressed the issues faced by the LP gas importers and that there would not be any shortages in future?   There will be no shortage in the future.  Milk powder imports are continuing to reduce, irrespective of the Cabinet’s decision to remove the import taxes on milk powder. How will the Government handle this situation?  I admit that there is a shortage of milk powder in the market at present. This kind of shortage would not happen if the control prices imposed by the Government are removed. However, we tried to work out this kind of control price to protect the consumer. In particular, the Government has increased the tax concession on milk powder, even though the rise in global prices of milk powder and the appreciation of the dollar are far greater than this tax relief. I think milk powder, gas, rice, sugar, chicken, and a few other essential items will be discussed at the cabinet meeting this week, and a clear plan will be put in place.    Since milk powder imports are being limited, are there any moves by the Government to promote the production of liquid milk in the country?  In line with the national policy framework “Vistas of Prosperity and Splendour”, the Government’s aim is to promote liquid milk, and this is currently being looked at. However, there shouldn’t be any shortage of milk powder in the country.

Kapruka

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Automobile, Mother and Baby Products, Clothing, and Fashion. Additionally, Kapruka offers unique online services like Money Remittance, Astrology, Medicine Delivery, and access to over 700 Top Brands. Also If you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.Send love straight to their heart this Valentine's with our thoughtful gifts!

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Automobile, Mother and Baby Products, Clothing, and Fashion. Additionally, Kapruka offers unique online services like Money Remittance, Astrology, Medicine Delivery, and access to over 700 Top Brands. Also If you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.Send love straight to their heart this Valentine's with our thoughtful gifts!


More News..