By Garvin Karunaratne, Ph.D.

ƒÆ’-¡ƒ”š‚ Ranil Wickremasinghe the Leader of the Opposition has said that India should help us to restore development in the North. He begs for IndiaƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s support. He has also said that India should help us in our agriculture. He states, referring to the liberated North, that :ƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚ until the region returns to normalcy and commences food production and fisheries Sri Lanka will continue to have problemsƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚ He has also sought Indian help to improve our storage and marketing.

ƒÆ’-¡ƒ”š‚ It looks to me that Ranil Wickremasinghe has a tendency to forget the past.

ƒÆ’-¡ƒ”š‚ Was it not the United National Party of President Jayawardena, a Government of which Ranil Wickremasinghe himself was a cabinet minister that did decide to privatise and sell off the total infrastructure that Sri Lanka had built up over the period from independence till 1977. for the development of agriculture and marketing. It was this total sell off of the infrastructure that supported agricultural development that caused the demise of agriculture under the rule of the United National Party from 1977 onwards.

ƒÆ’-¡ƒ”š‚ This is history now. No one can deny the damage done to our agriculture by the United National Party of Jayawardena and Ranil Wickremasinghe.

ƒÆ’-¡ƒ”š‚ Let me quote my own writings to remind Ranil Wickremasinghe of how the UNP destroyed agriculture in Sri Lanka.

ƒÆ’-¡ƒ”š‚ In 1980 the UNP boasted of its agricultural production. My comments:

ƒÆ’‚¢ƒ¢-¡‚¬ƒ…- In 1980 when this achievement was boasted about, I asked the Secretary to the Ministry of Agriculture for the Crop Cutting Surveys which we as District Administrators had attended to with great care to ensure that the statistics of production submitted by the Department of Agriculture were correct. To my utter dismay he replied that crop cutting surveys were no longer done. Instead the statistics submitted by the agricultural officers were accepted as correct. No check was done. These were the officers in charge of agricultural development whose promotions depended on the increases recorded. The importance of the Crop Cutting Surveys was that these surveys were done by gazetted officers of high rank directly appointed by the Government Agent. The idea was to have an effective super check on the reported statistics. In Bangladesh, a special team by the Ministry of Agriculture established that agricultural officers had exaggerated the acreage under high yielding varieties by as much as three to four times. Once the Crop Cutting Surveys were done away with the situation in Sri Lankan statistics can be no exception. ƒÆ’‚¢ƒ¢-¡‚¬ƒ…-p.56)

ƒÆ’-¡ƒ”š‚ This is how the Jayawardena Government recorded increases in agriculture. The earlier system of checks and balances was done away with. Even today no crop Cutting Surveys are done. It would be good for the present Ministry of Agriculture to consider re introducing the Crop Cutting Surveys.

ƒÆ’-¡ƒ”š‚ Sri Lanka had developed the Guaranteed Purchasing Scheme(GPS) for Paddy and other cereals that were being imported. This was done at first by the Marketing Department, later taken over by the Agrarian Services Department and finally done by the Paddy Marketing Board. Under the GPS Scheme a premium price- at times double the world market price was offered to genuine producers. The VelVidene and later the Cultivation Committee had to submit a list of owners and cultivators and based on the average yield they could sell their produce to the Government at the premium price offered. In this method the high subsidy really reached the producer and thereby they could decide to use new methods of cultivation which will bring in a bumper harvest. The UNP of President Jayawardena scrapped this GPS Scheme. Let us look to India for their Scheme of offering subsidies. A high price is offered to anyone who brings in paddy to the Government stores. It is well known that rice millers and traders give loans at high interest or tied to be paid in paddy at a low rate and they hand over the paddy at the Stores and get paid the premium price. In this System the subsidy does not reach the real producer. Instead the subsidy reaches the trader and the rice miller and very few producers benefit. This is the System that India now has and this is also what Sri Lanka does today, after the UNP had destroyed its old GPS Scheme of buying from producers. Ranil Wickremasinghe shoul;d know his facts before venturing out to talk. Our GPS System was a supreme scheme that really helped producers and this enabled the farmers to get out of the poverty trap. The UNP action helped rice millers and traders more than the producers.

ƒÆ’-¡ƒ”š‚ . The UNP sold off the Rice Mills and the Paddy Stores and now they are in the scrap heap. The Marketing Department had State of the Art modern rice mills. These were neglected, and sold as scrap. Once in the Eighties I gazed at the remains of the Ambalantota Rice Mill, my home for a year, where we milled 4000 bushels of rice a day providing employment to over a hundred and providing quality rice for the Southern Province. The mill had been neglected and the land parcelled out. . The mill which in the Sixties was one of the best was in pieces. I could not believe the rack and ruin that had been done by the UNP Government .. Now the Government is picking the pieces and importing rice mills, to replace what the UNP destroyed!

ƒÆ’-¡ƒ”š‚ Take the Marketing Department. The real name was the Department for the Development of Agricultural Marketing. That was a great scheme- a proven method of marketing agricultural produce not known to India or to any other country. The fundamental idea of this marketing system was that it supported both the producer as well as the consumer. The System was to have Government officers to purchase vegetables and fruits at all the major producer fairs at a price higher than what is prevalent at the Colombo Wholesale Market. Then all the traders who buy at the Fairs are compelled to buy at the same price because otherwise they will be out of business. All the goods purchased were sent over night by lorry and rail to Colombo and the officers in charge of the Tripoli Market had to accept around twenty wagon loads and twenty lorry loads everyday early in the morning. I was in charge of the Triploi Market in 1957. The goods were accepted, graded and despatched to a large number of small retail shops by 10 o clock the next day, to be sold. The margin of profit was only 15%. There was a fleet of small vans running round to replenish stocks that were sold. The traders in the area had to sell at the prices we sold if they were to be in business. The Marketing Department kept a margin of less than 15% to offset cost of transport and wastage. The low sale price enabled the consumers to obtain vegetables and fruits at cheap rates. Normally the margin kept by the Wholesaler at the Colombo Market and the retailer was around 100%. By reducing the 100% margin to 15% the Marketing Department helped both the prodiucer as well as the consumer.

ƒÆ’-¡ƒ”š‚ Ranil Wickremasinghe may please inform the Indian Foreign Secretary to go through our archives for the Marketing Department Scheme that President Jayawardena scrapped in 1980s because India does not have any such Marketing scheme. What happens today in India, Bangladesh and in Sri Lanka (after the 1980) is for the producers to bring their vegetables and fruits for sale at the Fairs. Then the traders offer very low prices and the producers are compelled to sell at those prices because otherwise they can pay for transport and take the goods home and come back on the next Fair day and meet the same traders and more over vegetables and fruits are perishable and have to be sold somehow. That is the current system. India may as well look to the Sri Lankan System if they want to develop the marketing of agricultural produce. .

ƒÆ’-¡ƒ”š‚ The Marketing Department achieved more by developing cold rooms and establishing a Cannery. This enabled the Department to offer floor prices for produce like oranges, pineapple and red pumpkin which were made into jam and juice and this enabled Sri lanka to be self sufficient. The UNP of President Jayawardena privatised the Cannery and thereafter imports have flooded in. It would augur well for the Government of Sri lanka to consider re establishing the lost vegetable and fruit purchasing scheme equipped with cold rooms and a cannery to enable local produce to be made into jam, jelley and juice and thus obviate imports, saving foreign exchange as well as finding employment for our people. Here too Ranil Wickremasinghe has to request Nirupama Rao, the Indian Foreign Secretary to copy our old Marketing Department which was abolished by the UNP.

ƒÆ’-¡ƒ”š‚ Ranil Wickremasinghe has also wanted India to help our irrigation. It is Sri Lanka that can boast of a unique irrigation system and it is known that our irrigation engineers were called to help the King of Kashmir in ancient days.

ƒÆ’-¡ƒ”š‚ India cannot help us. It has its own problem of poverty which is endemic and beyond any solution. A visit to New Delhi will show the swarms of poor children begging for food, and shanties all over. Poverty bursting at its seams, the type of which is not prevalent anywhere in Sri Lanka. Mani Shanker, Member of the Indian Parliament has said that 77% of \Indians live on Rs 20 a day(Hindustan Times 15/8/2010)

ƒÆ’-¡ƒ”š‚ Let us look to see whether India can help us at all. In India the Integrated Rural Development Programme(IRDP) is a gigantic development programme that offers subsidies to people. No action is taken by way of development planning to ensure that the people that get the subsidy can develop their enterprise. As stated by Professor Nilakanta Rath, ƒÆ’‚¢ƒ¢-¡‚¬ƒ…-the IRDP experience of giving cattle and other assets has come to little. What really happened to the subsidy was alarming. In my own words:

ƒÆ’‚¢ƒ¢-¡‚¬ƒ…- The lack of planning led to a situation where the same asset changed hands. One household that had purchased the cattle under the subsidy sold it to another household that also claimed the subsidy and the loan from the IRDP. As Kuriyan says, ƒÆ’‚¢ƒ¢-¡‚¬ƒ”¹…” in this way the same cattle moved from household to household satisfying aggregate demand in the absence of matching supplyƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢ƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚¦ The loans and the subsidy did not create any increase in production What the IRDP did and does even today is creating trading and the sale of the asset from one person to another at a higher price. It is on record that a cow worth Rs 1,000.00 was provided at Rs. 1,500.00 to the next person to enable him to claim the subsidy and the loanƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚¦ This caused inflation It activated the Quantity of Money Theory of Prices. It is a theory that the level of prices in a country is determined by the quantity of money in circulation. In short it means that any excess supply of money in any economy is a key cause for inflationƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚(p.418)

Sri Lanka should be happy that we do not have such subsidies that create inflation. The IDRP authorities are so thick that they cannot understand how their subsidy creates inflation and not an increase in production.

ƒÆ’-¡ƒ”š‚ India can offer us some help in small industries and dairy development but these are not the areas suggested by Ranil Wickremasinghe. This also illustrated that Ranil Wickremasinghe has no knowledge of development.

ƒÆ’-¡ƒ”š‚ Ranil WickremassingheƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s Budget of 2002 , when he was the Prime Minister tells it all. This budget reduced the 100% tax levied on foreigners when they purchased land in Sri Lanka. It was a total sell off to foreigners. And prime land was sold to foreigners till the next Government stopped it. A US consultant was even a member of the Sri Lankan team for an international conference. Having worked as a consultant for two foreign countries I must state that foreign consultants are never taken for any country team to any international conference. This was also the time when the Cooperative Wholesale Establishment with its shops and stores was sold and privatized. This enabled traders who imported goods to sell at fanciful prices. The CWE offered imported essential supplies at cheap rates to consumers and by abolishing the CWE the UNP paved the path for increases in prices. The rich traders became rich in the process. This budget was a total sell off to foreigners. Taxes on foreigners and the rich were reduced.

ƒÆ’-¡ƒ”š‚ This reign of Ranil Wickremasinghe as Prime Minister was also marked by the sale of the sovereignty of Sri Lanka to the terrorist LTTE by his Ceasefire Agreement which was entered into with the LTTE. It is now being revealed that this Ceasefire Agreement was actually drafted by Balasingham, one of the LTTE leaders and poised on SriLanka by the Norwegians. In fact Ranil Wickremasinghe was a dictator for having agreed to this Ceasefire Agreement without a vote in Parliament. He announced the Agreement after it was signed. Parliament is the supreme legislative body in Sri Lanka and if Ranil Wickremasinghe had a semblance of democracy in him he should have submitted the Ceasefire Agreement to a vote in Parliament, which he never did. The Ceasefire Agreement was also never discussed in his Cabinet of Ministers. By the Ceasefire Agreement the Sri Lankan Army was confined to the barracks and the LTTE was allowed to attend to publicity and activity all over the island. This dictatorial manner in which Ranil Wickremasinghe imposed the Ceasefire Agreement can be contrasted with what is happening today in the Houses of Parliament where the 18 th Amendment is being hotly debated.. Earlier the 18 th Amendment was submitted to the UNP and the Opposition Political Parties and also released to the Press. It was even submitted to the Supreme Court of the country. The 18 th Amendment upholds democracy in that the President has to bow before the people at an election if he is to be in power. Ranil Wickremasinghe who once abused his authority and became a real dictator to sign the Ceasefire Agreement even without the knowledge of the then President today has staged a boycott of Parliament. when the 18 th Amendment is being debated.

ƒÆ’-¡ƒ”š‚ It was also during the time that Ranil Wickremasinghe was the Prime Minister that he allowed undue publicity for special army manoeuvres that had been done by the earlier Government against the terrorist LTTE which resulted in some 43 members of the Army intelligence service being gunned down. Ranil WickremasingheƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s Government did not stop this mayhem which saw to it that key officers were one by one murdered by the LTTE. Today the LTTE has been totally routed out of the island. The action of Ranil Wickremasinghe to support the LTTE can be contrasted to the achievement of President Rajapaksa to destroy the LTTE from our shores lock stock and barrel. What is wrong if the saviour of Sri Lanka, the personage who saved Sri lanka from the ruthless LTTE is given a further lease of the Presidency at an election where the people can decide. I am certain that if not for the timely action taken by President Rajapaksa Sri Lanka would be a divided country today., with the LTTE ruling a third or more of our sovereign motherland.

ƒÆ’-¡ƒ”š‚ Is it not sad that the United National Party the Party that once won independence for our country has now become the mouthpiece for the terrorist LTTE and the catƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s paw for the Superpowers who are now arraigned against the sovereignty of out sacred motherland.

( All quotations are from, Garvin Karunaratne: How the IMF Ruined Sri Lanka and Alternate Programmes of Development, Godages, Colombo)

Garvin Karunaratne

Former SLAS (Government Agent, Matara)

7 th September 2010.