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| Sunday, 9 February 2003 |
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Govt. plans contingency measures The Cabinet of Ministers will initiate a coordinated programme to provide a safety net to face the impact on the domestic food market from heightened tensions in the Middle East. Minister of Commere and Consumer Affairs Ravi Karunanayake last week submitted a paper to the Cabinet highlighting the implications for domestic food security due to a possible war in the Middle East. In the paper, Minister Karunanayake has requested the ministers to take note of these implications and to initiate a coordinated programme of action to address the issues with the object of providing a safety net for the welfare of consumers. He has said the escalation of tensions in the Middle East due to the conflict between Iraq and USA has significant implications for the domestic food supply position of Sri Lanka. Since Sri Lanka is a net food importing, developing country in contrast to India and Pakistan, it is specially dependent on imports for its supplies of sugar, wheat flour, lentils (dhal), powdered milk as well as for 10 per cent of the rice supplies. He has highlighted six issues that need to be addressed in particular. These are assessing present stocks of essential food items island-wide to determine shortfall against desirable safety levels; determining the quantities to be purchased immediately by the Co-operative Wholesale Establishment (CWE), if necessary on an 'on the spot' basis; mobilising additional storage and warehousing space; fiscal measures to encourage higher imported volumes of selected items; stepping up monitoring and surveillance of the wholesale trade to effectively intervene against panic buying and hoarding; reviewing adequacy of existing distribution capacities island-wide (dismantling the former centralised distribution systems of the Marketing Department and the Food Commissioners Department, diminished capacities of the CWE distribution network due to mismanagement in the past, capacity of the Railway, emergence of new channels established by the Rehabilitation Ministry and Prima). In the Cabinet paper, Karunanayake has said that a war situation, irrespective of a full contagion taking place or not, will result in increased volatility in the world markets for commodity food items as well as freight rates mainly due to the building up of strategic food stocks both by the Government and private trade. Emergence of such supply constraints worldwide would lead to panic buying and hoarding at the domestic level, leaving the consumer increasingly exposed to spiralling prices. Therefore, it would be prudent for the Government to consider suitable contingency plans to avert a national shortage of essential food items that may arise otherwise from disruption of normal import patterns. Such measures may primarily focus on boosting the capacity of private sector trade channels to function under difficult conditions. It will also be necessary to take stock of public sector resources that could be deployed to meet the requirements of emergency food distribution. |
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