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The rising cost of living: Public grappling with prices   

24 Apr 2021

  • In need of more permanent solutions  

By Yumiko Perera    The rising cost of living is a crisis the Sri Lankan public is all too familiar with. While a vast majority of people would often complain about the hike in prices of essential goods, and rightfully so, there is no denying that the persisting problem seems to be structurally rooted.  [caption id="" align="alignright" width="323"] "Although the large-scale mill owners hand over goods at the stipulated price, they slap on a transport cost along with it so the retailer can't sell the goods for the gazetted price. We are planning on introducing new regulations to the Consumer Affairs Authority Act in order to control this scenario, through which we could operate under stricter guidelines, and the traders would be under the supervision of the CAA" Consumer Affairs Authority (CAA) Chairman Maj. Gen. (Retd.) D.M.S. Dissanayaka[/caption] Back in February, Minister of Trade Bandula Gunawardana had signed a forward exchange agreement with local manufacturers and direct importers of goods in a bid to stabilise the prices of 27 essential goods for a period of three months.  While this was introduced as a new methodology to control prices of essential items, these items would only be sold through Lanka Sathosa, co-operative stores, and Q-shops. There are approximately 420 Sathosa outlets and 3,000 co-operative stores across Sri Lanka. Gunawardana had highlighted that this step was taken with the intention to deliver quality essential goods to the people at a lower price.  Discussed at length, the “Sathosa Sahana Malla” is a relief pack with essential dry rations worth Rs. 1,000, which had been introduced for the festive season. While this relief package contains one kilogramme each of white raw rice, red raw rice, Nadu rice, white sugar, red dhal, and wheat flour, the relief pack also contains packets of salt, chilli flakes, and tea leaves, along with a facemask.   Although the Government's efforts to bring down the prices of essential goods is commendable, the same cannot be said about the practicality of the measures presently in place, as there is a significant price distortion and gaps between mark-to-market prices.  Emphasising the failure at ground level, and why market prices have not declined as expected, Consumer Affairs Authority (CAA) Chairman Maj. Gen. (Retd.) D.M.S. Dissanayaka, speaking with The Sunday Morning, shared: “There are a lot of practical issues, for example in the price of rice. Even if the large-scale mill owners give us rice at the wholesale price, they keep a certain amount for themselves and say that it is the transport cost. While they do not issue a bill for this supposed transport cost, they hand the rice over to the retailer after keeping a significant amount for themselves. The failure at the ground level to reduce market prices arises from here, as the retailer has to make up for the transport cost. The retailer is then unable to sell rice at the stipulated price level.” Stating that opting for a tangible solution under the current provisions is arduous, Dissanayake further elaborated: “If the large-scale mill owners are not given the money for transport, they do not bring the goods. Since this isn't written anywhere either, it is often overlooked.”  Highlighting the need for stricter provisions to bring the situation under control, Dissanayaka added: “With the present provisions in place, we have no way to find out how or when this happens. Although the large-scale mill owners hand over goods at the stipulated price, they slap on a transport cost along with it so the retailer can't sell the goods for the gazetted price. We are planning on introducing new regulations to the Consumer Affairs Authority Act in order to control this scenario, through which we could operate under stricter guidelines, and the traders would be under the supervision of the CAA."  [caption id="" align="alignleft" width="288"] "To get a kilogramme of rice, one-and-a-half kilos of paddy rice is needed. We usually buy a kilo of paddy rice at Rs. 35-40, and they have said that they have bought paddy rice at Rs. 50 a kilogramme. Even if you buy paddy rice at that amount, and sell the finished product at Rs. 90 after adding transport costs, etc., how and why the authorities are letting a kilogramme of rice be sold at Rs. 200 is a question we must all ask. The prices of the essential items have only been brought down for three months; what happens after that is the real question"  National Movement for Consumer Rights Protection Chairman Ranjith Vithanage[/caption] Meanwhile, Gunawardana further stated: “I think we have been able to manage prices of essential goods comparatively with the previous years. I have observed that even privately-owned supermarkets have come up with certain offers in line with the reductions in prices. It is clear that the Government has managed to bring in significant change in this regard.”  While the Minister of Trade seems to be convinced that they have managed to bring about considerable change, many seem to think otherwise.  National Movement for Consumer Rights Protection Chairman Ranjith Vithanage, speaking with The Sunday Morning, shared: “Prices for almost all essential items have skyrocketed. Everything, especially when you look at the essential items we consume on a daily basis, clothes, etc., the prices have increased significantly. The relief package available in the market for under Rs. 1,000 does not suffice for the consumption of an average family, it is nothing but mere deception.”  Highlighting that the “Sathosa Sahana Malla” is a vain attempt at addressing a serious systemic issue, Vithanage went on to say: “Even the type of rice included in the relief package is not something average families would use for daily consumption. This says a lot about how well the Government understands the people of our country."  Vithanage, pointing out that the problems of the people within our country cannot be solved with a mere relief package, further elaborated: “The transport costs slapped on top of the gazetted price when handing over rice to retailers is not new. This problem has existed for a long time. However, you must understand that that is only a part of the problem. “To get a kilogramme of rice, one-and-a-half kilos of paddy rice is needed. We usually buy a kilo of paddy rice at Rs. 35-40, and they have said that they have bought paddy rice at Rs. 50 a kilogramme. Even if you buy paddy rice at that amount, and sell the finished product at Rs. 90 after adding transport costs, etc., how and why the authorities are letting a kilogramme of rice be sold at Rs. 200 is a question we must all ask. The prices of the essential items have only been brought down for three months; what happens after that is the real question," Vithanage observed.  Speaking with regard to the rise in rice prices, Vithanage added: “I don't think the transport cost for a kilogramme of rice falls at Rs. 100. Unless it does, the price hike is completely unjustifiable. The people have appointed a government to manage all of this. Even back then, we had a similar market, and we had the same consumers. The needs of the consumers remain the same as before. This is daylight robbery.”  Claiming that the inability of the incumbent Government to understand the needs of the consumers is reflected in this, and highlighting that the only way to address it seems to be through a process of long-term economic restructuring, Vithanage stated: “The only significant change to be noticed is that the governments are different; other than that, the rest of the contributing factors remain the same. If the market has not changed, if the demand has not changed, if the requirements of the consumers have not changed, then how it came to this, remains the question."   

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