Govt Intervenes to Stabilize Food Prices | Daily News

Govt Intervenes to Stabilize Food Prices

A CAA official at a warehouse with paddy stocks hoarded by unscrupulous traders.
A CAA official at a warehouse with paddy stocks hoarded by unscrupulous traders.

Economics and politics always go in tandem in our country. The Government of the day is at the receiving end of public ire whenever the prices of essential items are increased due to whatever reason. The Cost of Living, prices of essential items and their shortages are topics that surely make it to the political stage. History has shown that those alone could be a make or break factor for Governments.

The upward trend of prices of essential goods and shortages of some essential items such as sugar, LP Gas and milk powder rocked the country in the past few weeks. The Government, while reiterating that there are enough stocks of those items within the country, blamed the importers, traders and intermediaries for hoarding them to create an artificial shortage in the market.

The business community, on the other hand, pointed the finger at Government intervention, the foreign exchange crisis, and a dearth of buffer stocks for the price hikes of those items. This has become a new challenge for the Government as it struggles to overcome a myriad of socio-economic problems worsened by the raging COVID-19 pandemic.

For the ordinary masses, whose income avenues are considerably hindered due to the pandemic and the Quarantine curfews, shortages of everyday consumer items and the resultant high prices have raised fears about the future sustenance of their families.

Emergency Regulations

President Gotabaya Rajapaksa on Monday night issued an Extraordinary Gazette declaring the enforcement of the Emergency Regulations on the supply of essential food items. The proclamation was done under the Public Security Ordinance to maintain an uninterrupted supply of essential food items at a fair price.

A detailed Gazette on what action to be taken under the Emergency Laws is expected in the coming days. “The authorized officers will be able to take steps to provide essential food items at concessionary rates to the public by purchasing stocks including paddy, rice and sugar, at Government guaranteed prices or based on the Customs value on imported goods. This is to prevent market irregularities which are causing an inconvenience to consumers due to concealment of stocks and selling them at higher prices,” the President’s Media Unit said.

At the same time, the President has appointed Major General M.D.S.P. Niwunhella, who is the Director at the Presidential Security Division (PSD), as the ‘Essential Services Commissioner’ to coordinate the supply of paddy, rice, sugar and other consumer goods that are essential to maintain the livelihoods of the people.

The Government has also vowed to provide essential food items at lower than existing market prices through state-owned Sathosa outlets and the Co-operatives. It has started selling brown sugar at a controlled price of Rs. 130 per kilogram via Sathosa, and people were seen queued up at those shops despite the Quarantine Curfew.

In addition, the Government has decided to release imported sugar consignments lying at the Colombo Port for nearly two months waiving the demurrage charges and obtain those stocks to Sathosa. The importers have faced difficulties in clearing those containers due to the prevailing dollar shortage in the country, and the Government has come up with the above arrangement after discussing with them.

Moreover, the Consumer Affairs Authority (CAA) has been raiding paddy, rice, sugar and milk powder stocks stashed in warehouses, and the CAA warned that the manipulators would be dealt with under the law.

Crisis management

Meanwhile, the Finance Ministry this week received around US$ 787 million under the International Monetary Fund (IMF) Special Drawing Rights (SDR) allocation, and the Central Bank has taken steps to strengthen dwindling foreign reserves with those funds and SWAP facilities with China and Bangladesh. The Central Bank on Tuesday said those arrangements would add an accumulated sum of US$ 1.2 billion to the country’s Gross Official Reserves in the immediate future.

The Opposition, however, is unconvinced over the Government’s way of handling the crisis situation. Samagi Jana Balawegaya (SJB) MP Dr. Harsha de Silva at a press conference on Tuesday called on the Government to immediately seek the support of the IMF to meet debt service obligations, which are falling due in the near term.

“SWAP agreements are temporary solutions. Those need to be paid back within a maximum of six months. The Government cannot go further in this manner. Some decisive actions are needed. Trying to use the Emergency Laws to control the market will not deliver positive results,” he commented.

Opposition Leader Sajith Premadasa, bolstering this stance, said his Party would support any negotiations with the IMF to find a durable solution to the prevailing financial woes. “People are heavily inconvenienced due to the scarcity of consumer goods. Many raise concerns that the foregone era of queues and rationing on essential items would be recreated. We appeal to the Government to halt the construction of expressways and jogging tracks. What is more important right now is providing the essential items at affordable prices,” he remarked.

Tamil National Alliance (TNA) Spokesman MP M. A. Sumanthiran also spoke against imposing the Emergency Laws, stating that it was an unwarranted act that would lead to a state of repression in the country. He however advocated a separate Public Health Emergency Legislation to cope with any situation arising in the country due to the prevailing pandemic.

Against this backdrop, Finance Minister Basil Rajapaksa has informed the Cabinet on Monday to maintain strict financial discipline in the public sector to cut down unnecessary expenses and review and postpone less prioritized projects to ease the financial burden on the Government. He has also ordered to stop non-essential recruitments and unnecessary allowances, such as fuel allowances during the lockdown.

The Government’s recurrent expenditure has swelled due to COVID-19 related expenses such as procuring vaccines, PCR and Rapid Antigen testing, increasing hospital facilities, providing relief to the needy people and sectors etc., but the Government revenue has plummeted due to frequent interruptions of economic activities. “A penny saved is a penny earned” is an adage that is worthy of reminding at this juncture.


In the meantime, the Sri Lanka Freedom Party (SLFP) and the United National Party (UNP), the two mainstream political parties which shared the country’s ruling power in turns since the Independence in 1948 until their breakaway groups made inroads into them very recently, mark their 70th and 75th anniversaries respectively in the coming few days.

Both parties have decided to have low key celebrations and online events to mark the anniversaries as the COVID-19 pandemic has engulfed the country so deeply that even a small public gathering could not be recommended.

On the other hand, the ruling Sri Lanka Podujana Peramuna (SLPP) and the main Opposition, the Samagi Jana Balawegaya (SJB), have now dominated the country’s political landscape taking the limelight away from the SLFP and the UNP. Therefore, the clout and the glory of both these historical parties have been fading in the last few days.

Many political analysts believe that a change of leadership would do well to both the parties, as those who currently wear those mantles have got nothing new to offer to the country or to attract the disengaged voters and supporters. Certainly, the SLFP and the UNP will need new faces in the frontline and out-of-the-box thinking if those are to be saved from the sense of doom hanging over them.

The UNP, the “Grand Old Party” founded by Sri Lanka’s first Prime Minister late D.S. Senanayake on September 6, 1946, is to have its Diamond Jubilee Celebration as an online event with the tagline “An illustrious past - A glorious future” (“Jeshta Ithihasayak - Shreshta Anagathayak”) on September 5, 2021.

The UNP’s long serving Leader and former Prime Minister, MP Ranil Wickremesinghe’s address will be the main item on the agenda. Reduced to a single bonus Seat at the last General Election in August 2020, Wickremesinghe took oaths as the only UNP Legislator in the Ninth Parliament on July 23, after dragging his feet for nearly a year.

The SLFP, founded by former Prime Minister late S.W.R.D. Bandaranaike on September 2, 1951 as a Left-wing party, commemorates its Platinum anniversary today with an islandwide blood donation campaign and an online event. SLFP Leader and former President Maithripala Sirisena will address the event outlining the future plans of the party. Keynote addresses will be delivered by former SLFP General Secretary Prof. Rohana Lakshman Piyadasa and Prof. Dhamma Dissanayaka.

The SLFP is the second largest party in the incumbent SLPP-led coalition Government with 14 MPs in its Parliamentary Group. Each of them contributed Rs. 100,000 to the COVID-19 Healthcare and Social Security Fund last week as donations. The SLFP, however, has not been very happy lately over its share in Government affairs and the treatment of its Members.

These landmark anniversaries would be an opportune moment for both the SLFP and the UNP to turn the searchlight inwards to reflect on what went wrong in their camps and redesign their paths to be able to come back stronger next time.


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