By Garvin Karunaratne
The Hon President may please consider getting the
Army to establish the Marketing Department of the Fifties and thereby enable
vegetable availability as well as controlling inflation. It can be later
developed to be a major department. The total outlay can be recouped including
the cost of establishing a Cannery within the first year. I can vouch for this,
My earlier paper is reproduced and if implemented
now(can be done in days) will be a great feat.
It is hoped that our
President’s attention is brought to the fact that our country was the only
country in the world to have a system by which the prices of veg and
fruit was unofficially controlled. That was the Marketing Department(MD) at
work, buying and selling vegetables and fruit, competing with private traders,
keeping a low margin of around fifteen percent to cover up cost of transport
and wastage in handling.
It would behove of our
President to immediately order the Army to buy vegetables from the Producer
Fairs, keep a margin of fifteen percent to cover cost of petrol and wastage and
sell in the Cities. Traders keep at least a total of one hundred percent
at the buying place, at the wholesale dealer in Colombo and at the retailer’s
place.
The Army was entrusted with
this task in the days of Premier Mahinda Rajapaksa in about 1998 and then the
city was full of army lorries selling vegetables. I have seen them perform this
yeoman service.
The Dambulla Economic Centre
and economic Centers at many places- is not the answer, because as detailed in
the Daily Mirror of 24/2 Take Immediate steps to control Veg prices: Pres. to
Officials” because vegetables brought to Dambulla from the areas of vegetable
cultivation are distributed back (for sale) to the original areas… these
centers are controlled by large scale traders with vested interests.”
Once it was reported that the officer entrusted with the Dambulla Economic
Center was severely assaulted.
It is traders that rule. When I
once went to Dambulla and walked around, it was only traders. My incessant
visits to producer Fairs for over six years enables me to sniff producers
from a fair distance. It will be a difficult task to find a Producer Fair in
entire Sri Lanka not visited by me.
In 1955 when I joined the MD as
an Assistant Commissioner we did work from small shanty type of sheds- we
called them Packing Sheds. They were all buildings built with timber, a cement
floor and a corrugated cladding to keep off the rain and in a corner was housed
the Assistant Commissioner working in the air and dust of onions and
condiments. There were no DPJ Towers or Setsiripayas for us. These were
shed put up overnight to house the British Army when the Japanaese declared
war.
In the MD,our work commenced at
4 AM in the mornings on at least four days a week, visiting Producer fairs and
ensuring that we bought produce competing with the traders.
I include parts of my earlier writings, edited to avoid
repetition in support.
Once in the pre IMF days, in the days before Sri Lanka started
playing poodle to the IMF Sri Lanka did have a method by which it controlled
inflation.
That was the Marketing
Department at work. There was a scheme where the Marketing Department
purchased vegetables at the producer fairs, brought the produce overnight to
the cities and sold the produce keeping a very low margin of fifteen percent to
cover up cost of transport and wastage. This Scheme which had been developed by
Sri Lankan administrators and politicians was abolished on instructions from
the IMF in 1978 when the Jayawardena Government caved in to the IMF. Since then
it is the private sector traders that rule trade.
If only the Marketing
Department activities are restored, we can not only control inflation,
but we can also reduce imports and also find employment for our people.
It is time that our new
Government makes an initiative to re establish the Marketing Department
activities- its vegetable and fruit marketing scheme and the Canning Factory.
That will be a real achievement.
Inflation- Rising Prices is a
major concern today. Sri Lanka had built up the infrastructure to control
inflation. What we are seeing today-unbridled inflation, has been caused
because we did away with the infrastructure we had.
For the marketing of essential
commodities, in my own words:
The Department for the Development of Agricultural Marketing”¦
ensured that prices of all essential commodities were indirectly controlled and
the traders were compelled to offer fair prices to the producers and the retail
shop keepers were compelled to sell at fair prices to consumers. This is
a system that I have never seen elsewhere in the world’ ¦The motto of the
Department was to pay the highest possible price to the producer and sell at
the lowest possible price to the consumer.( From: How the IMF Ruined Sri
Lanka,”¦ (Godages: 2006)
I was involved with the entire System
because I was appointed Assistant Commissioner for the Development of
Agricultural Marketing in 1955, and worked in the Ratnapura, Hambantota,
Anuradhapura Districts as well as was in charge of the Tripoli Market,
the Headquarters of the Vegetable Marketing Scheme for a year in 1957.
This System involved a Network of Retail
Shops(Fair Price Shops) in every major city and a Vegetable and Fruit
Marketing Scheme involving purchasing, selling and processing
vegetables and fruits, a Scheme that covered the entire island.
The entire island was covered
by Assistant Commissioners in the Provinces and Marketing Officers posted in
producer areas, who had to report the availability of produce, prices at the
Fairs, and guide producers to plant varieties in demand.
The Marketing Department
established Vegetable and Fruit Packing Sheds(actually purchasing units) in all
producing areas. The name given was packing sheds and they were in many places
in temporary buildings mostly made with timber. Even some Assistant
Commissioners had their offices in these temporary buildings in 1955.
The entire Vegetable Marketing
Scheme was administered from Tripoli Market, based in the largest hangar in the
Colombo Goodshed. One part of the Scheme was to purchase vegetables and
fruits from producers who brought their produce to our Vegetable Packing Sheds.
They were paid immediate cash. The Department was equipped with lorries that
were sent to the chief Producer Fairs in the producer areas. Thus there
were mobile purchasing uints at all major fairs like Embilipitiya, Colombage
Ara, Bandarawela, Welimada, Kekirawa to mention just a few. These
Purchasing Units comprised Marketing Officers and a staff of purchasing
officers and labourers. The produce brought in was weighed and accepted from
producers and they were paid cash immediately. The Assistant Commissioners of
the Districts were required to visit all major fairs to ensure that the
purchases were made regularly. When I worked in the Districts on most days my
day commenced at four to get to the Fairs by six in the morning. Vegetables
were purchased and packed and dispatched to Triploi by evening either by
wagons(by trains) or by special lorry.
At Tripoli Market, the
Assistant Commissioner had a Marketing Officer at the Colombo Wholesale
Market. His task was to report the prices at which the wholesale traders sold
the produce to the retail traders and to report on the availability of produce.
In the Districts, the Assistant Commissioners and the Marketing Officers had to
report the prices at which private traders purchased vegetables and
fruit. Generally there was a wide gap between the prices at which the
traders purchased goods and the prices at which the Wholesale Traders sold to
the retail traders in Colombo. Based on these prices, the Assistant
Commissioner at Tripoli Market decided the purchasing prices at which goods
were to be purchased at the Fairs. This price was always above the prices
offered by the traders who bought goods at the Fairs. This helped the producers
and the traders at the Fairs too had to offer a similar price because otherwise
they will be out of business.
On a daily basis Tripoli Market
received around twenty wagon loads of vegetables and a similar number of
lorries bringing in produce. These were checked and had to be in our Retail
shops by ten in the morning. Tripoli Market was a hive of activity from
early morning. Then the Railways ran a very efficient service and brought
in produce in time. For instance curd from Ridiyagama Farm in Hambantota
was sent by lorry to Matara and came by night mail train to Tripoli. This was
an item in high demand. The retail price we fixed for Ridiyagama Curd
effectively controlled the prices of curd in private shops in Colombo.
The Assistant Commissioner at
Triploi Market kept a very low margin to cover up cost of transport and
handling and fixed a low price for sales to the consumers through the network
of Shops. Generally the Marketing Department kept a margin of around 10 to 15%
above the purchase price while the private trader at the Fair kept a
margin to 40 to 50% and the Whoelsale Traders too kept around 40% and further
the retail trader too kept around 40%. Thus while the private trader
generally kept a margin of 100% or 120% over the purchasing price at the Fair,
the Marketing Department kept a margin of 10% to 15%.
The working of the Marketing
Department meant that the private traders at the Fairs and the Wholesale
Traders as well as the Retail Traders in the cities had to be satisfied with a
low margin.
The Marketing Department in the
Fifties was headed by BLW Fernando, a Chartered Accountant and he would not
allow any Assistant Commissioner to keep a higher margin than 15%. That was a
rule to be followed. Every month all Assistant Commissioners had to attend a
Conference where the Profit and Loss calculations were closely studied and the
Commissioner would chastise all Assistant Commissioners that had a profit
of over 10% or incurred a loss. We were expected to cover up, not to
incur a loss or to get a large profit.
This was the key method by
which the prices of vegetables and fruits were kept in check. The Scheme has
thus a dual aim- of offering the producer a fair price as well as offering the
consumer a low price. At times it was like walking on a rope but we got
used to walk on it.
The Retail Shops had to be well
stocked and full of goods otherwise the wrath of the Commissioner had to be
faced.
A few years ago on one of my
visits I found tomatoes being sold at forty rupees a kilo by a producer on the
Mahiyangana Road, when the retail price in Colombo was around rupees eighty to
one hundred, a margin of over hundred percent. This could not happen while the
Marketing Department was at work. The Assistant Commissioners were
eternally traveling as they had to visit Fairs, inspect purchasing at the Fairs
and the Vegetable Purchasing Depots, contact producers and offer advice on
items on demand. Generally our traveling allowances exceeded our salaries.
Tripoli Marker had cold rooms
where the excess produce could be stored.
This Vegetable Marketing &
Fruit Marketingh Scheme was very successful in ensuring that consumers in
cities obtained vegetables and fruits at cheap rates. The Cost of Living was
effectively kept in check.
The Canning Factory
Local producers got a boost
with the establishment of the Canning Factory in 1955. At that time Sri Lanka
imported fruit juice and fruit from Australia and the task of the Canning
factory was to produce fruit juice, jam and jellies. The Vegetable Purchasing
Centers sent goods to the Canning Factory. At the initial stages in canning
fruit juice many problems were faced and it took over a year to surmount them
and get down to production for all Sri Lanka’s requirements. The Marketing
Department offered floor prices for pineapples, red pumpkin and ash
pumpkin and producers benefited immensely. Floor prices meant that the
Department will purchase everything offered at that price. Pineapple was tinned
and even an export trade was built up. Assistant Commissioner Oswald
Tilekeratne spread his wings abroad very often. Red Pumpkin was turned into
Golden Melon Jam and Ash Pumpkin was turned into Silver Melon jam. The Factory
activity made Sri Lanka self sufficient in fruit juice, jam and many other
processed food within a few years.
The Marketing Department was called upon to attend to many
tasks.
Once Sri Lanka was not self
sufficient in eggs. The Marketing Department offered a floor price for eggs and
Triploi Market collected eggs from the Negombo-Nattandiya area till Sri Lanka
was self sufficient in egg production. Once Self sufficiency was reached
the scheme was disbanded.
With the abolition of the
Marketing Department, and the privatization of the canning factory all this
achievement was lost. That was the way in which the IMF crippled the
development of the Third World and created a situation where we had to import
our requirements from the Developed Countries.
Once the tomatoes producers at
Hanguranketa made pandals of tomatoes in order to highlight their plight of not
being able to sell their tomatoes. This could not have happened while the
Marketing Department was functioning. To start with the Assistant Commissioner
of the area would be held responsible. If that happened when I was in charge of
The Tripoli Market I would have sent a few lorries and the entire stock of
tomatoes would have been purchased within a few hours and it would have been
turned into Tomatoe Sauce and Juice at the Factory. The MD had a fleet of over
a hundred lorries. Today Spain produces tomatoe sauce, tomatoe juice, tomato
paste and sun dried tomatoes for most countries in Europe. With a Tomatoe belt
in Hanguranketa we cannot produce tomato sauce even for our requirements. Our
climate had enabled a variety of crops. There is a mango belt from Anuradhapura
to Matale. Even today if action is taken to pluck mangoes and process it, we
can be self sufficient in all fruit juice within one year. The Chena
cultivators will find sales for their Red Pumpkin,Ash Pumpkin and Melon. There
is an Avacado belt from Peradeniya to Gampola and avacado juice can easily be
made. The country will benefit by avoiding the millions spent on imports.
Following the liberalization
free market economics of the IMF we created a market for tomatoe sauce
from the USA, and fruit juice from as far as Canada and Oregan in the
USA. Our producers have stopped producing large quantities for fear of
being unable to sell and we have unemployment and our farmers have low incomes.
The Colombo Supermarkets are full of Heinz Tomatoes sauce from the USA and
fruit juice and jam from Australia.Even vinegar from the USA! The IMF did its
work right to cripple development in our countries and for us to buy goods from
the Developed Countries. That was the Structural Adjustment Programme in
action. (For more details: How the IMF Sabotaged Third World Development:
Kindle & Godages) It is sad that we have deaf, dumb and
blind economists who even fail to come to grips with how we were duped by
the IMF.
I hope the Army will be
enlisted for this task of marketing development. In President Trump’s USA the
Army is widely used for irrigation, power station construction, even
maintaining levees that keep the sea from flooding New Orleans. In my wide
travel in the USA, clocking over 50,000 miles in my Roadtrek motorhome,
crossing America thrice I have seen the Army at work doing non military duties
on a regular basis. It is we fools that do not enlist the Army for development
tasks. If at all we touch the army we call them to the barracks in a short
while.
Let the Army experience of Van
Sales, this time end with the establishing of a proper Marketing Department
with a Cannery. The total cost of establishing a Cannery can be easily recouped
in the very first year by the savings of foreign exchange we use today to
import fruit juice and fruit preparations Later on the Army venture
can be handed over to a SLAS Department and the Army moved to another task-
perhaps the reconstruction of our irrigation tanks.
Let me live in hope.
