As far as we, consumers, are concerned, assurance is needed that our daily rice ‘n’ curry is available and affordable. Today, that reassurance is urgent and, hopefully, the Government’s timely actions will provide it.
Even as prices of some basic food items have gone up in recent months, the Government has moved to curb the impact on the consumer, especially, the urban consumers who are most hit.
As we all know, the volatile weather conditions throughout the year, with episodes of unduly heavy rain only briefly and inadequately interrupting months-long drought, have inevitably affected local food production. Virtually, all locally produced food, from rice, vegetables and coconut to tea and sugar, have had poor harvests due to the harsh weather - first from water deprivation and then from floods and landslides.
Last month, the Government acted quickly to manage coconut supplies to local markets as the drought-inflicted coconut production declined. What had prompted government moves were attempts by local distributors and retailers to keep prices up artificially, blaming it on the weather.
Consumers are all too familiar with the wiles of traders as they strive to keep up margins. And whenever such wily marketing becomes rampant, it is up to the authorities to act to protect consumer interests.
The Coconut Cultivation Board (CCB) has now been authorized by the Government to monitor and regulate – if necessary – coconut price trends in the local market. This monitoring will allow the CCB to step in with price limits if market trends indicate artificially high prices.
Last week, the Government acted similarly to curb price rises in rice supplies.
Once again, the adverse weather is the underlying principal cause for recent price increases for rice in the local market. Rice, as we Lankans know, is highly dependent on lots of water and, its supply at the right moment in the cultivation cycle.
Everything is disrupted when drought denies water irrigation when it is most needed for cultivation and, then, unduly heavy rains flood maturing rice fields at a time when dryness is required.
Last week, the Government warned local rice suppliers that it would impose price limits on raw rice if local retailers and wholesalers failed to maintain reasonable price levels that did not artificially exploit supply shortages.
Government Ministers have warned traders that if they did not heed the Government’s call for restraint in pricing, the Government would be compelled to import more rice to ensure that supply stability helps maintain affordable prices. The Industry and Commerce Ministry has been authorized to take action in this regard.
The Government, unlike the armchair ideologues of the previous government, is, no doubt, reluctant to lean too far toward price control regimes that have long served to inhibit investments and creative entrepreneurship. Since that epoch-making shift in 1977 - 40 years to the year - from an ethos of price-controlled scarcity to one of a more controls-free economy, the country has learned the value of the market, both, in generally ensuring availability of goods and at negotiable price levels.
But, as the political leadership is fully aware, markets alone do not deliver all the goods, especially, not at affordable prices all of the time.
Governments must step in to perform the vital task of meeting social needs. The private sector, itself reliant on government for business-conducive environments, must know that the population will expect the Government to act to protect consumer interests as well as business interests. Citizens will appreciate the advantages of the market economy only when that economy delivers on social needs.
The experience of such volatile weather last year and these past months, inevitably caused a decline in virtually all agricultural production. Even as lower production and less supplies, push up market prices, it is the Government’s responsibility to ensure that its citizens remain well provided with food and other needs.
Government action becomes more urgent when it is clear that traders are unduly pushing up prices or creating artificial scarcity, taking advantage of weather-caused disruption of agricultural production. Creditably, the President as well as the Prime Minister have made public their current concerns over the food cost situation and ensured that the relevant ministries are responding suitably and in time.
Even as the Government responds to on-going food price fluctuations with short term measures, there is much to be done in the long term, firstly, to enhance production, but also with innovative agricultural and irrigation planning that will meet the newly emerging weather contingencies arising from global climate change.
The Institute for Policy Studies last week also highlighted the problem of food costs and called for action to meet long term challenges in this regard. IPS’ acting Executive Director last week pointed out that the current ‘food inflation’ was mainly supply-driven and urged that forward-looking action and policy was needed to boost food production.