{"id":119239,"date":"2021-10-15T15:46:13","date_gmt":"2021-10-15T22:46:13","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=119239"},"modified":"2021-10-15T15:46:13","modified_gmt":"2021-10-15T22:46:13","slug":"skyrocketing-prices-of-veg-and-fruit-is-there-a-remedy","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2021\/10\/15\/skyrocketing-prices-of-veg-and-fruit-is-there-a-remedy\/","title":{"rendered":"SkyRocketing Prices of Veg and Fruit: Is there a Remedy?"},"content":{"rendered":"

by Garvin Karunaratne<\/em><\/span><\/h2>\n\n\n

Sky rocketing prices of\nvegetables and fruit has happened to be the order of the day. Once we did have\na method to control inflation by ensuring that traders cannot keep a fat\nmargin. That was the system built up by Sri Lankan administrators RH Basset and\nBLW Fernando Commissioners of the Department for Development of Agricultural\nMarketing.  This system was worked in a perfect manner from the Fifties\ntill the late Seventies, when  we bowed to the IMF and abandoned it.<\/p>\n\n\n\n

I enclose a Paper written by me\na few years ago which details the system which was  unique to Sri Lanka.\nOpening more Economic Centers do not provide an answer to inflation. \nPerhaps this paper may offer some ideas.<\/p>\n\n\n\n

Controlling Inflation: How once we did it<\/h4>\n\n\n\n

Inflation- Rising Prices is a\nmajor concern today. Sri Lanka had built up the infrastructure to control\ninflation. What we are seeing today-unbridled inflation, has been caused\nbecause we  did away with the infrastructure we had.<\/p>\n\n\n\n

For the marketing of essential\ncommodities, in my own words:<\/p>\n\n\n\n

The Department for the Development  of Agricultural\nMarketing\u201d\u00a6 ensured that prices of all essential commodities were indirectly\ncontrolled and the traders were compelled to offer fair prices to the producers\nand the retail shop keepers were compelled to sell at fair prices to\nconsumers.  This is a system that I have never seen elsewhere in the\nworld\u2019 \u00a6The motto of the Department was to pay the highest possible price to\nthe producer and sell at the lowest possible price  to the consumer.(\nFrom: How the IMF Ruined Sri Lanka,\u201d\u00a6 (Godages)<\/em><\/p>\n\n\n\n

 <\/em>I was involved with the entire System\nbecause I was appointed Assistant Commissioner for the Development of\nAgricultural Marketing in 1955, and worked in the Ratnapura, Hambantota,\nAnuradhapura  Districts as well as was in charge of the Tripoli Market,\nthe Headquarters of the Vegetable Marketing Scheme for a year in 1957.<\/p>\n\n\n\n

 <\/em>This System involved a Network of Retail\nShops(Fair Price Shops) in every major city and a Vegetable  and Fruit\nMarketing Scheme involving purchasing, selling and processing  \nvegetables and fruits, a Scheme  that covered the entire island.<\/p>\n\n\n\n

The entire island was covered\nby Assistant Commissioners in the Provinces and Marketing Officers posted in\nproducer areas, who had to +report the availability of produce, prices at the\nFairs, and guide producers to plant varieties in demand.<\/p>\n\n\n\n

 A Network\nof Retail Shops(Fair Price Shops)<\/strong><\/h4>\n\n\n\n

In order to enable the\navailability of essential food the Marketing Department established a large\nnumber of shops in the cities and these shops were well stocked with essential\nfood like dhall, sugar, flour, onions and vegetables. These were sold at rock\nbottom prices, where no profit margin was kept. The intention was to\nunofficially control the retail prices offered by private traders. When a well\nstocked shop was selling goods at a low price the private retailers too had to\nsell at similar prices otherwise they will have no sales because the consumers\nwill all go to the Marketing Department shops and the private shop keepers will\nhave to close down. Assistant Commissioners had to ensure  that the\nDepartmental shops were well stocked.<\/p>\n\n\n\n

An incident comes to mind. I\nwas then in charge of the Southern Province with my office at Ambalantota. In\nthe Red Onion season we got wagon loads of red onions from Jaffna and we were\nrequired to sell at whole sale prices to traders and also to sell at our shops.\nOne day  I had just inspected our shop at Galle and also visited a number\nof private traders\u2019 shops to ensure that they did sell red onions at reasonable\nprices. I returned to Ambalantota. The next morning in office I got a telegram\nfrom Head Office. It read, Member of Parliament Dahanayake reports that there\nis a shortage of red onions in Galle. Inspect and report at once\u201d. Those were\nthe days when we had no mobile phones and it was very difficult to get long\ndistance calls. \u009d. I got into my car and\nreached Galle by  around four. I went straight to our shop and found it\nwell stocked with red onions. I checked the books for sales. I visited a number\nof private shops and found them well stocked selling at a slight higher price\nthan our price. That was how it ought to be. Armed with these details I went to\nMr Dahanayake\u2019s residence. He was not in and I waited for him. I knew him well.\nIt was late in the night about ten that he came home and inquired what brought\nme there. I brandished the telegram and said that I had been in Galle the\nearlier day and found that red onions were available in our shop and that there\nwas no shortage. He  looked hard at me for a few minutes and said, Garvin,\nYou know a man came to meet me and said that there was a shortage of red onions\nand to satisfy him I sent a telegram to the Minister\u201d\u009d I quipped, \u201d But sir, there is no shortage and there never was\u201d\u009d \u201d That I know but to keep that man happy I had to send a\ntelegram.\u201d\u009d  He added,\u201d That\nis politics, Garvin. We have to keep our supporters happy. Don\u2019t you worry,\nnext time when I go to Colombo I will meet the Minister and tell him that there\nis no problem here with the Marketing Department\u201d\u009d  That was all. I reported this meeting to our Commissioner\nand never heard again. Presumably Mr Dahanayake had phoned the Minister. \nWe Assistant Commissioners had to have a dragnet over all essential supplies\nand that included not only our shops but all private shops. It was an indirect\ncontrol of prices and availability.<\/p>\n\n\n\n

Again, once at the District\nCoordination Committee at Anuradhapura it was reported that the few traders\nwere fleecing the colonists at Padaviya by charging high prices. I was the\nAssistant Commissioner at Anuradhapura and said that we will open a shop at\nPadaviya. I got covering approval from the Commissioner and in a few days time\nopened a Shop at Padaviya, to serve the colonists. Our Shops effectively\ncontrolled the cost of living. The private traders had to cut their profits as\notherwise they would be  out of business. That scheme worked well.<\/p>\n\n\n\n

The Vegetable and Fruit Marketing Scheme<\/h4>\n\n\n\n

The Marketing Department\nestablished Vegetable and Fruit Packing Sheds(actually purchasing units) in all\nproducing areas. The name given was packing sheds and they were in many places\nin temporary buildings mostly made with timber. Even some Assistant\nCommissioners had their offices in these temporary buildings in 1955.<\/p>\n\n\n\n

The entire Vegetable Marketing\nScheme was administered from Tripoli Market, based in the largest hangar in the\nColombo Goodshed.  One part of the Scheme was to purchase vegetables and\nfruits from producers who brought their produce to our Vegetable Packing Sheds.\nThey were paid immediate cash. The Department was equipped with lorries that\nwere sent to the chief  Producer Fairs in the producer areas. Thus there\nwere mobile purchasing uints at all major fairs like Embilipitiya, Colombage\nAra,  Bandarawela, Welimada, Kekitrawa to mention just a few. These\nPurchasing Units comprised Marketing Officers and a staff of purchasing\nofficers and labourers. The produce brought in was weighed and accepted from\nproducers and they were paid cash immediately. The Assistant Commissioners of\nthe Districts were required to visit all major fairs to ensure that the\npurchases were made regularly. When I worked in the Districts on most days my\nday commenced at four to get to the Fairs by six in the morning. Vegetables\nwere purchased and packed and dispatched to Triploi by evening either by\nwagons(by trains) or by special lorry.<\/p>\n\n\n\n

At Triploi Market, the\nAssistant Commissioner  had a Marketing Officer at the Colombo Wholesale\nMarket. His task was to report the prices at which the wholesale traders sold\nthe produce to the retail traders and to report on the availability of produce.\nIn the Districts, the Assistant Commissioners and the Marketing Officers had to\nreport the prices at which private traders purchased vegetables and\nfruit.  Generally there was a wide gap between the prices at which the\ntraders purchased goods and the prices at which the Wholesale Traders sold to\nthe retail traders in Colombo. Based on these prices, the Assistant\nCommissioner at Tripoli Market decided the purchasing prices at which goods\nwere to be purchased at the Fairs. This price was always above the prices\noffered by the traders who bought goods at the Fairs. This helped the producers\nand the traders at the Fairs too had to offer a similar price because otherwise\nthe producers will not sell to them.<\/p>\n\n\n\n

On a daily basis Tripoli Market\nreceived around twenty wagon loads of vegetables and a similar number of\nlorries bringing in produce. These were checked and had to be in our Retail\nshops by ten in the morning.  Tripoli Market was a hive of activity from\nearly morning.  Then the Railways ran a very efficient service and brought\nin produce in time.  For instance curd from Ridiyagama Farm in Hambantota\nwas sent by lorry to Matara and came by night mail train to Tripoli. This was\nan item in high demand. The retail price we fixed for Ridiyagama Curd\neffectively controlled the prices of curd in private shops in Colombo.<\/p>\n\n\n\n

The Assistant Commissioner at Triploi\nMarket kept a very low margin to cover up cost of transport and handling and\nfixed a low price for sales to the consumers through the network of Shops.\nGenerally the Marketing Department kept a margin of around 10 to 15% above the\npurchase price while the private trader at the Fair  kept a margin to 40\nto 50% and the Whoelsale Traders too kept around 40% and further the retail\ntrader too kept around 40%.  Thus while the private trader generally kept\na margin of 100% or 120% over the purchasing price at the Fair, the Marketing\nDepartment kept a margin of 10% to 15%.  The establishment of Special\nVegetable Depots at Dambulla  etc in recent years, actually created\nanother middleman, keeping a margin of profit.<\/p>\n\n\n\n

The working of the Marketing\nDepartment  meant that the private traders at the Fairs and the Wholesale\nTraders as well as the Retail Traders in the cities had to be satisfied with a\nlow margin.<\/p>\n\n\n\n

The Marketing Department in the\nFifties was headed by BLW Fernando, a Chartered Accountant and he would not\nallow any Assistant Commissioner to keep a higher margin than 15%. That was a\nrule to be followed. Every month all Assistant Commissioners had to attend a\nConference where the Profit and Loss calculations were closely studied and the\nCommissioner would chastise all Assistant Commissioners that  had a profit\nof over 10% or incurred a loss.  We were expected to cover up, not to\nincur a loss or  to get a large profit.<\/p>\n\n\n\n

This was the key method by\nwhich the prices of vegetables and fruits were kept in check. The Scheme has\nthus a dual aim- of offering the producer a fair price as well as offering the\nconsumer a low price.  At times it was like walking on a rope but we got\nused to walk on it.<\/p>\n\n\n\n

The Retail Shops had to be well\nstocked and full of goods otherwise the wrath of the Commissioner had to be\nfaced.<\/p>\n\n\n\n

A few years ago on one of my\nvisits I found tomatoes being sold at forty rupees a kilo by a producer on the\nMahiyangana Road, when the retail price in Colombo was around rupees eighty to\none hundred, a margin of over hundred percent. This could not happen while the\nMarketing Department was at work. The Assistant Commissioners  were\neternally traveling as they had to visit Fairs, inspect purchasing at the Fairs\nand the Vegetable Purchasing Depots, contact producers and offer advice on\nitems on demand. Generally our traveling allowances exceeded our salaries.<\/p>\n\n\n\n

Tripoli Marker had cold rooms\nwhere the excess produce could be stored.<\/p>\n\n\n\n

This Vegetable Marketing &\nFruit Marketingh Scheme  was very successful in ensuring that consumers in\ncities obtained vegetables and fruits at cheap rates. The Cost of Living was\nkept in check.<\/p>\n\n\n\n

 The Canning Factory<\/p>\n\n\n\n

Local producers got a boost\nwith the establishment of the Canning Factory in 1955. At that time Sri Lanka\nimported fruit juice and fruit from Australia and the task of the Canning\nfactory was to produce fruit juice, jam an-d jellies. The Vegetable Purchasing\nCenters sent goods to the Canning Factory. At the initial stages in canning\nfruit juice many problems were faced and it took over a year to surmount them\nand get down to production for all Sri Lanka\u2019s requirements. The Marketing\nDepartment offered  floor prices for pineapples, red pumpkin and ash\npumpkin and producers benefited immensely. Floor prices meant that the Department\nwill purchase everything offered at that price. Pineapple was tinned and even\nan export trade was built up. Assistant Commissioner Oswald Tilekeratne spread\nhis wings abroad very often. Red Pumpkin was turned into Golden Melon Jam and\nAsh Pumpkin was turned into Silver Melon jam. The Factory activity made Sri\nLanka self sufficient in fruit juice, jam and many other processed food within\na few years.<\/p>\n\n\n\n

The Marketing Department was called upon to attend to many\ntasks.<\/h4>\n\n\n\n

Once Sri Lanka was not self\nsufficient in eggs. The Marketing Department offered a floor price for eggs and\nTriploi Market collected eggs from the Negombo-Nattandiya area till Sri Lanka\nwas self sufficient in egg production. Once Self sufficiency was  reached\nthe scheme was disbanded.<\/p>\n\n\n\n

It was found that during the\nKataragama Season, the restaurants charged high prices for meals.  This\nthe Government combatted by running a large restaurant. Officers who have the\nability were posted from various units and they provided quality meals. The\nMenu included thosa, kiribath, string hoppers, pittu, rice and curry and the\nrestaurant was kept open till late. When I covered the Southern Province I was\nin charge of this restaurant for two years and was held responsible for\nproviding good quality meals at a cheap rate.  This was the method by\nwhich the cost of living of the pilgrims was controlled.<\/p>\n\n\n\n

With the abolition of the\nMarketing Department, and the privatization of the canning factory all this\nachievement was lost. That was the way in which the IMF crippled the\ndevelopment of the Third World and created a situation where we had to import\nfrom the Developed Countries.<\/p>\n\n\n\n

Once the tomatoes producers at\nHanguranketa made pandals of tomatoes in order to highlight their plight of not\nbeing able to sell their tomatoes. This could not have happened while the\nMarketing Department was functioning. To start with the Assistant Commissioner\nwould be held responsible. If that happened when I was in charge of The Triploi\nMarket I would have sent a few lorries and the entire stock of tomatoes would\nhave been purchased within a few hours and it would have been turned into\nTomatoe Sauce and Juice at the Factory. Today Spain produces tomatoe sause,\ntomatoe juice, tomato paste and sun dried tomatoes for most countries in\nEurope. With a Tomatoe belt in Hanguranketa we cannot produce tomato sauce even\nfor our requirements. Our climate had enabled a variety of crops. There is a\nmango belt from Anuradhapura to Matale. Even today if action is taken to pluck\nmangoes and process it, we can be self sufficient in all fruit juice within six\nmonths. The Chena cultivators will find sales for their Red Pumpkin,Ash\nPumpkin and Melon. There is an Avacado belt from Peradeniya to Gampola and\navacado juice can easily be made. The country will benefit by avoiding the\nmillions spent on imports.<\/p>\n\n\n\n

Following the liberalization\nfree market economics of the IMF we  created a market for tomatoe sauce\nfrom the USA, and fruit juice from as far as Canada and Oregan in the USA. \nOur producers have stopped producing large quantities for fear of being unable\nto sell and we have unemployment and our farmers have low incomes. The Colombo\nSupermarkets are full of Heinz Tomatoes sauce from the USA and fruit juice and\njam from Australia. The IMF did its work right to cripple development in our\ncountries and for us to buy goods from the Developed Countries.  That was\nthe Structural Adjustment Programme in action. (For more details: How the\nIMF Sabotaged Third World Development: Kindle & Godages)<\/p>\n","protected":false},"excerpt":{"rendered":"

by Garvin Karunaratne Sky rocketing prices of vegetables and fruit has happened to be the order of the day. Once we did have a method to control inflation by ensuring that traders cannot keep a fat margin. That was the system built up by Sri Lankan administrators RH Basset and BLW Fernando Commissioners of the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57],"tags":[],"class_list":["post-119239","post","type-post","status-publish","format-standard","hentry","category-by-garvin-karunaratne"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/119239","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=119239"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/119239\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=119239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=119239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=119239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}