By Garvin Karunaratne,
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.
(From:High Prices for Vegetables: Is there a remedy? Posted on January 19th, 2020 0
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 six months. 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.
Garvin Karunaratne,
25/2/2020
For a full detail of MD
activities, please read: Papers on the Economic Development of Sri Lanka”,
Godages, 2010
For details of how Sri
Lanka was taken for a ride by the IMF, please read: How the IMF Sabotaged
Third World Development(Kindle/Godages :2017) and
How the IMF Ruined Sri Lanka & Alternative
Programmes of Success(Godages:2006)