Essential commodities:

Govt intervenes to reduce prices

by Uditha KUMARASINGHE

The Government has withdrawn the Rs. 10 duty waiver given per kilogram of imported wheat grain to protect the Yala paddy harvest that is coming into the market now to promote the country’s rice consumption.

According to Government sources,this duty concession was waived last November due to the rice shortage then in the market. In order to safeguard both Yala harvest and the local farmers the Government has re-imposed this duty from June 22. The sole intention of this move is to safeguard local farmers and offer them the certified price for their paddy production, they said.

Bumper harvest

Rice prices are dropping due to the bumper harvest from the Yala season. In addition, arrangements have been made to cultivate over 100,000 acres of bare paddy lands in the North and the East during the coming Maha season. As a result, the country will have sufficient stocks of rice for years. Therefore, steps were taken by the Government to re-impose this duty on imported wheat grain, they said.

Monopoly

Prima,which holds Sri Lanka’s wheat flour monopoly has increased the price of a Kilo of wheat flour by Rs.10.50 due to withdrawal of the tax concessions. Consequently, a kilo of Prima flour has been raised from Rs.63 to Rs.73.50. Prima also increased the price of a kilo of wheat flour by Rs.13 on September 28 last year. Rice prices increased following the Prima price hike.

When asked on how the Consumer Affairs Authority can intervene to control wheat flour prices and the prices of a loaf of bread, a senior official of the Authority told the Sunday Observer that the present Consumer Affairs Authority Act has no adequate provisions to control this situation.

Therefore, Co-operatives and Internal Trade Minister Johnston Fernando has decided to introduce necessary amendments to the Act to address these key issues. He said Prima has entered into agreements with the BOI.

No power

According to the Consumer Affairs Authority Act, The Authority has no legal power to control Prima’s monopoly. In addition, authority has no provisions to fix the price of a loaf of bread. At present the quality and the quantity of breads are produced under different categories.

If the Authority recommends to produce 450 grams of a loaf of bread, bakery owners avoid our rules and produce a different kind of a loaf of bread.

The Co-operatives and Internal Trade Ministry has considered these issues and decided to introduce necessary amendments to the existing Consumer Affairs Authority Act, he said.

Meanwhile the Co-operatives and Internal Trade Ministry has decided to import essential food commodities with effect from next week. The Ministry will distribute these food items to Lak Sathosa and Co-op Cities set up islandwide. At present, the private sector maintains the monopoly of importing essential food items.

Therefore the Government wanted to intervene to control this situation and bring down the prices of essential food commodities. However, the Government through this move has no intention whatsoever to obstruct the business activities conducted by the private sector traders, he said.