The Army to control prices of vegetables: The resurgence of the lost Marketing Department?
Posted on January 18th, 2011

By Garvin Karunaratne, Ph.D.

 I am happy to see the Army being called to tackle the cost of living and what is most important is to note that the Army has been able to sell the produce at half the price at which the traders retailed.  I am an interested party as in a number of Papers written by me I stated that the problem was the high margin of profit that the traders kept. I was also convinced of this because of my background in the Marketing Department, where the Department kept only a margin of 10% and further the Department purchased the vegetables from the producer at a higher price than what the traders offered.

 The Vegetable and Fruit Marketing Scheme  of the Marketing Department was implemented islandwide and like in the case where the Army has initiated action to tackle the spiralling cost of living  today, the Marketing Department too was established overnight during World War II to combat the spiraling prices.

 Then a Civil Servant called R.H.Bassett was given full authority to establish a vegetable purchasing and retailing scheme. He moved really fast. He did not requisition or build shops; instead he found some crown land and put up a wooden shed. They were first called packing sheds- they were real sheds built up over night and the vehicles roared in with Marketing Officers. Even in 1955,  years after Bassett left, we Assistant Commissioners worked from these wooden sheds. At times our files got wet, but we dried them and worked undeterred. The manner he recruited is now a legend. One advertisement appeared in the newspapers for applicants to call personally. In  comes Bassett and asks them to line up. Those who yet fiddled about and failed to line up properly, were thrown out. The rest were asked to shout out the numerals in order, starting from one. Those who faltered were asked to step out and disqualified. The rest were taken in- the odd numbers as Marketing Officers and the even numbers for office duties.

 I marched into this set up in 1955, when Bassett was  no more but we were under one B.L.W.Fernando a Chartered Accounted who never minced words. His orders had to be invariably carried out and we were put in charge of a Province. As much as we recruited overnight we were authorized to sack anyone that stole. I sacked an Assistant Manager for pilfering even forty rupees worth of goods. Those  were the days when if I needed storage space I would step into the largest house I could find and persuade the owner to hand over some out rooms or a portion of his house. I negotiated the rent, paced up and down counting my steps, calculated the floor space,  drew a sketch and the net day posted an Assistant Manager and started purchases. It was something I dare not do when I was a Head of Department eighteen years later for fear of being censured by the Auditor General. We acted really fast and most of us worked a full 12 to 14 hour day including weekends, the day starting before si in the morning.  I am certain that the details I provide of how the Marketing Department started and functioned will help the Army to get going with the noble task of controlling the spiraling prices.

 There are protests already from various quarters. The Army Commander has been called a Vegetable Mudalali.. That was my job at Triploi Market in 1957, when my duty was to control the entire operation islandwide. The Assistant Commissioners who worked in charge of Tripoli Market could be proud of controlling the Trader mafia and offering fair prices to the producers,  fair prices to consumers and also saving valuable foreign echange.

 The Vegetable and Fruit Marketing Scheme was centered at Triploi Market, in one of the large hangers at the Maradana Goodshed.  There was a rail siding and every morning there were around twenty wagon loads and another twenty lorry loads of vegetables and fruits coming in from all corners of the island. They were all full of vegetables and fruits and these were unloaded, weighed and despatched to the retail outlets of the Department. If I remember right in the City of Colombo we had around fifty small retail outlets that sold vegetables and essential commodities like Dhall, Sugar, Onions etc.. There was a retail outlet even at Kohuwela. The Department had Purchasing Depots in all the producing areas and producers who brought produce to the depots could sell  the produce and get paid cash immediately.. In addition the Purchasing Units had a few lorries and a Marketing Officer would go on a mobile purchasing mission to all the Fairs in the island to purchase produce. He would buy at the rates fied by Tripoli Market, pay the producer, and despatch the goods overnight to Colombo.  The Producer Fairs commenced at si in the morning and by noon the entire produce would be sold.

 The  cruicial task was fiing the buying prices at the District Purchasing Depots and  this was done by the Assistant Commissioner in charge of the Tripoli Market.  I was in charge of the Tripoli Market in 1957. I had three officers at the Colombo Wholesale Market whose duty was to observe the prices at which the traders sold goods to the retailers. We could not find the prices at which the wholesale traders purchased goods from the producers but we could always find the prices at which the produce was sold to the  retailers. The wholesale merchants always kept a good margin.  The wholesale market rates were reported to Triploi Market. The Marketing Officers who visited the Fairs in the producer areas, reported the prices at which produce  was purchased by the traders  in the producing areas.  Based on the prices at the wholesale market in Colombo and the prices at the Fairs I decided the buying price. This was always a price higher than the prices offered by the traders at the Fairs. Fiing the right price was a litmus test. If the buying price was too high the traders would not buy and the Marketing Department would have to buy all the produce to tackle which we did not have transport and storage. The guideline was not to supplant the traders but to make them offer a higher price to the producer.

 The retail sale price in Colombo was generally fied at 10% or 15% over the buying price to cover the cost of transport and wastage,  Consumers benefited because our retail prices were generally around half of the traders’ retail prices

 In February 2010, producers on the Mahiyangana Road were selling tomatoes at Rs 40 a kilo and at that time retailers in Colombo were selling at Rs . 80 to Rs. 100 a kilo.  If the Marketing Department purchased a kilo at Rs 40 a kilo the sale price would be less than Rs 50 thus benefiting the consumer. That area was not a real producing area. In the real producer areas the price would be below Rs. 40 a kilo.

 At best,  the Marketing Department purchased only around 10% of the produce at the Fairs, the traders had to be guided  by the prices at which the Marketing Department purchased because otherwise no producer would sell to them. What happens is that when the Marketing Department is ready to purchase at a particular price and this is displayed on a board, the traders too purchase at that price. Thus the Marketing Department controlled the prices at the Fairs in an unofficial manner.  Similarly in the towns  the fact that goods are available at our sales outlets at a particular rate meant that traders had to also sell at that rate because otherwise no one will buy from them. The Department had a fleet of small vans that were eternally on the run  filling the retail shops with produce.

 Relating this eperience to what the Army is doing today, one can state that the Army should purchase produce at the Producer Fairs. These are at Welimada and Bandarawela for up country vegetables and  Embililipitiya, ColambageAra,  and Kekirawa for low country produce. In addition there are smaller Fairs throughout the island.

 The Army should have a central depot like the Triploi Market because the consumers require a variety of vegetables and a central depot like Tripoli Market can ensure that the Army sales outlets are fed with stocks of all varieties.

 A few cold rooms are also required to store vegetables and fruits as the total stock cannot be always sold and has to be stored overnight.

 There is no question of the Army failing in its mission. In February 2010, the shelves of Supermarkets in Colombo were full of bananas imported from Latin American countries. It is not necessary to import any bananas. We have not contracted to provide employment and incomes for farmers in Latin America! The Army should have a purchasing unit in the Rambukkana area which is the prime banana producing area in Sri Lanka. Bananas are grown mainly in the Sabaragamuwa and also in the Dry Zone areas.  It may be good to rope in the Divisional Secretaries to  inform the availability of produce and also report the consumer prices in the regional cities. The Marketing Department had retail sales outlets in all small towns that sold vegetables and essential  goods  and we also supplied  all major hospitals in the island.

 The Marketing Department had  a large network of buying and selling units and if the network of sales units is not widespread the attempt at controlling prices will be a failure. There should therefore be no question of the Army stopping its vegetable purchase and sale . If the Army stops its activity the traders will jack up the prices. The traders will keep higher profits to combat for what they lost during the Army-vegetable operation.

 Another aspect lies in  Canning the etra produce. At the initial stages  there was no canning factory and the produce that was purchased had to be somehow sold.  This was done by having van sales at lower prices running at times till late in the night. Later in  about 1955, a  Canning Factory was established and this enabled floor prices to be offered for Pineapples, Red Pumpkin and Ash Pumpkin. The Department purchased the total quantity offered of these varieties, and prepared  jam and  juice. Red Pumpkin was made into Golden  Melon Jam and Ask Pumpkin into Silver Melon Jam. Sri Lanka became totally self sufficient in jam and food preservations and this saved valuable foreign echange. Pineapples were even eported.Under IMF advice the Cannery was privatized!

 Another important  aspect of the Marketing Department was to advise the producers as to what to produce.  Producers who brought produce to the Fairs and those who brought produce to the Purchasing Depots were advised  on what should be produced. The Assis tant Commissioners in the Districts also participated at the Divisional Revenue Officers’ Divisional meetings  and their assistants like the Rural Development Officers and the Village Headmen were assigned with the task of contacting producers. In addition the Department of Agriculture had Agricultural Instructors at the Divisional level and Agricultural Overseers at the village level who helped the producers on technical matters.

 While the present foray of the Army into buying  produce  in the remote producer areas and selling them in the cities has so far been a success it is essential that the Army activities have to be developed further and a full fledged Marketing Department has to be established if the cost of living is to be controlled.

 In my last Paper I questioned as to why we are frightened of the Trader Mafia that controls the prices. The fact that the Army was put into action shows that our Government is not frightened.  A Government that defeated the monster Prabhakaran is not a meek mouse.

 The IMF and the World Bank have their theory that the Private Sector is the engine of growth and that the Government should not engage in commerce. The Marketing Department mechanism is in commerce but it forms an essential part of the development infrastructure that will enable both the producer to be assured of  a fair price as well as the consumers to be assured of goods at a reasonable rate. It is a development infrastructure that is essential to create production and employment. We will fall into a deep abyss if we fail in production and  employment creation.

 In the Fifties and the Sities the Marketing Department was a great success and it was decapitated by the United National Party under President Jayawardena at the behest of the IMF.

 Deploying the Army to control our spiraling prices is a move in the right direction. It is hoped that this foray will lead to the establishment of a new Marketing Department.  A development infrastructure comprising a Marketing Department, a CWE(Lak Satosa) for marketing and controlling prices, a vibrant agricultural etension service to enable production are absolute necessities in the march to economic development. This is nothing new. We had this set up earlier and we have to get it back. Otherwise we are committing hara-kiri!

 Garvin Karunaratne
Former SLAS, Government Agent, Marata District

18/1/2011

4 Responses to “The Army to control prices of vegetables: The resurgence of the lost Marketing Department?”

  1. Susantha Wijesinghe Says:

    DEAR GARVIN, I know that you have been very vociferous on this subject, of Vegetable and Fruit Marketing concept, and has written umpteen number of articles proving your point. It is a very laudable effort, and I do hope that any authority concerned would pick up your advice.

    Lets start…. TRIPOLI MARKETS OF SRI LANKA.

    I do remember coming to Tripoli Market with my late Father, who was a Civil Servant, in our bola Morris Eight Saloon ( X8920), to buy produce. This was in the late forties, and I do remember he had a friend named Alwis, and also another named Tillekeratne, and both were Staff Officers. My father was also a personal friend of Ridgeway Tillekaratne, whom I believe was not the same Tillekaratne at the Tripoli. Tripoli was a vast place with large cool rooms, full of vegetables, and many consumers came there to buy direct. The place was congested with lorries bringing in collected Produce.

    I believe Tripoli should be modernised and extended to also receive Fish and Sea Food.

    It is my point of view that there should be TRIPOLI MARKETS in Kandy, Galle, Anuradhapura, and Ratnapura, for a start, using them as MOTHER STATIONS. They should be spacious, and should have very modern Storage Facilities, including Cool rooms and Freezer Rooms. They should have their own Ice Making Machines manufacturing Ice Blocks and Ice Cubes, which could be used to preserve the more perishable produce. The very concept of the TRIPOLI MARKETS, should be for long term planning to help sustain fair prices to Producers, and Also fair prices to consumers. IT WOULD BE A TREMENDOUS CHALLENGE TO THOSE WHO WOULD BE INITIATING THIS TRIPOIPLI CONCEPT. And as suggested in this article by Garvin, who is it that who can do better than the army. ?

    During the Sixtees, I wrote a paper on this identical subject, with a Proposition to the then Honarable Prime Minister late Sirimavo Bandaranaike. I believe my Proposition would have been filed in the WPB, as her Secretaries would not have comprehended the subject matter, and had not given it to the due recipient. It may have received JUNK MAIL treatment.

    My suggestion was for the Marketing Department to appoint Purchasing Officers, and lodge them in Railway Stations, where there are heavy vegetable producing areas. To prove my proposition, I will list an example here:- I had leased out a hundred acres in the Jungle, on the stretch between Cheddikulam on the Mannar Road, and Poorvasanakulam on the Jaffna Road. All the People who lived in this stretch of the jungle were Sinhales and Muslims. Hardly a tamil. During the season, all these villagers planted, Cucumber, Karavila, Pathola, Watakolu, Wattakka, Puhool, etc. The produce was so much, there was nobody to buy it. We planted Cucumber on about Half Acre, and believe me, we were walking on Cucumber. So much of it. If a Villager wanted to sell Cucumber produced in Cheddikulam, he has to take it to Medawatchchiya, in gunnies, and he is paid only Rs3.00 per Gunny. So, meeting the cost of transport in a van or tractor, the producer has nothing. The produce was rotting in the fields. This is what I saw with my own eyes. It was a very sad situation. No money changing hands, and the villager is destitute. NO MPs, No Parlimentarians, No Kachcheri Officers. CHEDDIKULAM STATION would have been an ideal collecting point. I was lucky to have left the project and the area. I later heard that the Tiger Terrorists, hacked and killed all the Sinhalese Villagers. The BIG MUDALALI IN CHEDDIKULAM WAS SALIHU MOHAMMED, a very kind and friendly man. The tigers would not have spared him either.

    Produced collected at the Railway Stations, could be transported to the mother stations for onward deliveries, and distribution for retail sales.

    Some of the Unemployed Graduates could be given meaningful employment too.

    It is my fervant hope and wish, that GARVIN can come to Sri Lanka and liase with the Army, to help set up the TRIPOLI CONCEPT. Garvin, please use your expertise and experience in this field, to help the Consumers of MOTHER, Sri Lanka. GOOD LUCK.

  2. Ben_silva Says:

    Using the army for selling Veg. is a step in the right direction. Using the army for civil work has been done in Israel for a long time. Those in the army that is involved will learn or need to learn a lot of skills, such as marketing, sales, logistics, purchacing, storage, team work, customer satisfaction and so on which will be useful in civiian life. The scheme could be developed to a Marketing Dept, which should be able to compete with private orgs. Further, as we are short of cheap fish, the navy could get involved in fisheriies.I also hope tat the services of Gavin be obtained by GOSL.

  3. Fran Diaz Says:

    Thanks to Dr Gavin Karunaratne for his informative articles.

    GoSL should bring back the Marketing Dept. & the CWE. IMF rules were followed by the UNP. Do we have to continue that trend ? IMF is interested in pure or mostly Capitalism, isn’t it ? Pure Capitalism has already proved to be inefficient to meet the needs of the masses of any nation.

  4. Fran Diaz Says:

    Apparently, the CWE now known as Sathosa, is apparently doing a good job. Is this correct ?

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