Consumers in for host of benefits- Minister Johnston Fernando

*Budget has provided relief to consumers in all sectors

*A coconut is Rs 35 in wholesale market

*Kilo of rice now Rs 40, from Rs 100

By Uditha KUMARASINGHE

Bringing down the prices of essential food commodities especially during the festive season has become a challenging task of the Co-operatives and Internal Trade Ministry. The Sunday Observer interviewed Co-operatives and Internal Trade Minister Johnston Fernando to ascertain the moves taken by his Ministry to reduce the prices of goods during the festive season. The Minister assured there won’t be a shortage of consumer goods and the Ministry has taken every possible measure to assure a free flow of commodities during the festive season.

He said except the prices of coconut, eggs and onion, the prices of all other consumer goods have come down during this festive season compared to the prices of November and December last year.

Q: You have got a challenging Ministry. How do you intend to tackle the workload and challenges in the New Year?

A: I will face the challenges next year the way I faced them in this Ministry in the past. My life is full of challenges. Therefore, this is not a new experience or difficult task for me. This is a Ministry which should directly provide solutions to the problems faced by the consumers. I will face these challenges in a systematic manner. I have proved it in the past. We would carry out the functions of the Ministry in a well planned manner. We did not have resource personnel who can do a complete study of the price fluctuations of goods in the World Market. So I took steps to set up a special unit to study the price fluctuations. In addition, I have also appointed two committees to study price fluctuations in the Sri Lankan market. One committee is headed by my Media Secretary while the other is supervised by the Consumer Affairs Authority. The prices of goods did not go up during this festive season due to a continuous study done by the committees on price fluctuations of goods.

Even though the Opposition attempts to make a big fuss on this issue, their message does not go to villages. Their slogans have been rejected by the people due to steps taken by the Ministry to protect the consumers. But I admit the prices of a few goods such as coconuts, eggs and onions have gone up.

However, the President or the Trade Minister cannot control the prices of onions or vegetables as they are perishable. These are the problems caused by nature.

Q: The cost of living is high despite the Government’s efforts to lower it. What are the reasons for this situation, both internal and external?

A: First we should analyse the cost of living figures recorded during the months of November and December last year. There is no ability to maintain the same cost of living digit during the entire year. There are certain months where production is high and it is stocked for sales later. Therefore, the cost of living cannot be measured compared with the figures of previous months.

I state with full responsibility, except the prices of coconut, eggs and onions, no consumer goods have gone up during this festive season compared with the prices of November and December last year. But I don’t say all the goods are cheaper. But we should look at the prices of goods comparatively. We have taken steps to reduce the prices of a large number of essential food commodities. We decided to import coconuts, eggs and chicken to reduce the existing prices of these food items during the festive season. The decision taken by the Ministry to import chicken will help maintain a fixed price for chicken. Otherwise a kilo of chicken would have gone up to nearly Rs. 600. We should not forget the fact that we have to undergo problems caused by the weather and nature as faced by other countries in the world. The price of onions have gone up due to bad weather. We have become self-sufficient in rice in a situation where some countries have faced severe problems. Sri Lanka has been able to maintain a rice surplus.

Q: What are the steps you are taking to bring down the cost of living, especially essential items?

A: When we consider the prices of essential food items like rice, nobody can complain the prices are high. At present rice is sold at a very low price. If the prices of rice will go up, paddy stocks in our stores will be converted into rice and released to the market. At present, we have also imposed a price control on rice. The price of a Kilo of dhal has been reduced by Rs. 25 compared with the prices of last year. As I mentioned earlier, only the prices of coconut and eggs have gone up while there is a slight increase of vegetable prices due to torrential rain which affected cultivations. As a responsible Government, we have been able to bring the prices of some essential goods to a stable position.

Another key measure taken to bring down the cost of living, is the 234 Lak Sathosa outlets have been opened countrywide under “Mahinda Chinthana”. Another 16 Lak Sathosa outlets will be opened before the end of this year. The prices of goods in Lak Sathosa outlets are 15 to 20 percent lower rather than the prices in the local market. All these measures taken by us have directly led to bring down the cost of living. A large number of fallow paddy lands have been re-cultivated and lot of home garden projects have been commenced under the Government’s Api Wawamu - Rata Nagamu food production drive. At present our per capita income has gone up. That is why the people don’t come to streets to protest. Today the UNP and the JVP have been restricted to television. The UNP or the JVP have not been able to take the people into streets. The UNP and the JVP even attempt to hang on the prices of eggs, chicken and coconut. But we have decided to import these food commodities without allowing to further increase their prices. At present people are not ready to come to streets as they are well aware of these false propaganda campaigns launched by the UNP and the JVP.

Q: A coconut is priced at nearly Rs. 50 or more. What has led to this situation and what are the steps you are taking to bring it down?

A: In some areas, the prices of coconut have gone up to Rs. 55 or Rs. 60. We should admit it. The price of a coconut in wholesale market is Rs. 35 or Rs. 36. The middle man get a profit Rs. 20 or Rs. 25 from a coconut. On a directive by the President, coconut stocks collected from estates owned by the Coconut Development Ministry are provided to the CWE and directly released to the market at a price of Rs. 30. Only this move will not be able to overcome this situation. Therefore a decision was taken to import coconuts. We intend to import coconuts from India and sell a coconut at Rs. 30. We decided to import coconuts to provide consumers at a fair price and not to destroy local coconut cultivation. If fertiliser is used, the maximum production cost of a coconut is nearly Rs. 18.

The country’s coconut production has gone down. Nearly 200,000 to 300,000 coconut trees were cut down due to pesticide disease spread in the Matara district. The Coconut Development Ministry has made arrangements to plant nearly four million coconut saplings. We will definitely succeed in this endeavour.

Q: Chicken and egg prices have somewhat stabilised, though they are still high. What can be done about this situation? Is chicken being imported?

A: We have been able to stabilise the prices of chicken. But the prices of eggs are still high and an egg is Rs. 17. We have already decided to import eggs and chicken. We hope to sell an egg at Rs. 10 or Rs. 11 and a Kilo of chicken around at Rs. 300. In future, the prices of chicken will further come down.

Q: What are the steps taken to ensure a free flow of goods during the festive season?

A: I have already discussed this issue with all wholesale dealers. According to our statistics, there won’t be any shortage of consumer goods during the festive season. The co-operative movement also directly import goods. When a Kilo of onion went up to Rs. 180, we directly imported onions and brought down the price of a Kilo of onion to Rs. 130. At present the onion problem is the biggest problem faced by us. We are discussing with Pakistan to import onion as the India has banned onions exports.

Q: You have decided to revamp the Narahenpita Economic Centre. Will you be paying attention to other economic centres as well?

A: The management of the economic centres has not been satisfactory in the past. Some managers have been appointed to economic centres without any required qualifications. I have given instructions to provide a training to these managers and remove the incompetent managers by appointing new managers. The economic centres have not functioned properly. They have been conducted in an ad hoc manner. The intention of establishing these economic centres was to create a new business crowd and provide goods to the consumers at a fair price. A prime objectives of these economic centres is to safeguard the consumers from blackmarket traders. However some wholesale traders in these economic centres have become into blackmarket traders. Some traders in these Economic Centres have re-rented their stalls to outsiders. This is a serious offence. The Ministry charges a monthly rental of Rs. 6,000 from a stall. Nearly Rs. 1,000 or Rs. 1,500 is charged from a pavement stall a day. The intention of providing these stalls at such low rates is to give that benefit to the consumer. We have already deployed special teams to inspect the stalls which have been re-rented and immediately take them back to the Ministry.

Our Ministry also intends to start business in these economic centres. The Ministry will set up its own trade stalls in these economic centres. We have already started several stalls at the Narahenpita Economic Centre.

We have also decided to set up several stalls at the Dambulla Economic Centre to directly buy products from farmers. The Ministry through this move will introduce a price control mechanism to economic centres and bring the prices of goods to a stable position. Our intention is to convert these economic centres into the places with high cleanliness, discipline and service.

Q: Why did you re-impose a price control mechanism on rice?

A: A Kilo of rice dropped to Rs. 40. In some areas a Kilo of paddy was purchased at Rs. 16 or Rs. 17. As a result, a rice surplus was created. A price ceiling was introduced during the last Presidential Election as a Kilo of rice went up to Rs.100. This is not a decision taken by me. These decisions are taken at the Food Security Committee which meets monthly under the patronage of the President. A decision was taken by that committee to impose a price control on rice. But the Opposition knew this after one and half months and they tried to sling mud at me by highlighting this as a decision taken by me. When the price of a Kilo of rice went up to Rs. 71, a price control was imposed. It is the responsibility of the Government to impose a price control on some consumer goods and lift when required.

Q: We are again in for a record rice harvest. What can be done to safeguard both the consumer and the farmer in such a situation?

A: The Government has reserved Rs.40 billion on fertiliser subsidy. Therefore farmers have re-cultivated a large number of fallow paddy lands and abandoned paddy lands in the North and the East. This has led to a paddy surplus. Private traders attempted to purchase paddy from farmers at very low rates. Then the Government intervened and purchased a Kilo of paddy at Rs. 27 or Rs. 30. That is how the Government safeguarded the paddy farmers. The Government will safeguard farmers during all harvesting seasons by giving them a certified price for their paddy while protecting the consumer.

Q: With the taking over of Shell Gas and renaming it as Litro Gas, can the consumers expect lower prices and a better deal?

A: How can we expect an immediate price reduction? Even if the Government took over Shell Gas and renamed it as Litro, we don’t produce gas here. Gas is imported by the Government. We doing our best to reduce the overhead cost on gas. This cannot be done immediately. We have to study the process. If somebody thinks gas can be provided at cheaper prices because the Government took over Shell Gas, then the Government will have to sell Litro Gas next year. We intend to continue this industry without obtaining undue profit.

Q: How do you plan to revive the co-operative movement to bring it closer to the public?

A: The President has made a massive change within the co-operative movement. The Government has write in off nearly rupees two billion loans in the co-operative sector.

The co-operative movement owes another Rs. 1,800 million to the Government. I have requested the President to written off this loan as well. At present the President is studying it.

The President has instructed the Chief Ministers to inquire how this money has been spent by the co-operatives. The President has completely exempted taxes from co-operative movement.

In addition, the President allocated Rs. 600 million to create the Co-op City movement. At present over 1,000 Co-op Cities have been set up countrywide.

The Government has been able to completely change the traditional outlook of co-operatives by converting them into mini super markets. The President has also allocated Rs. 900 million to purchase goods to mini Co-op Cities and Co-op Cities. Arrangements have been made to set up a main store in each province for Co-operatives. The first store was opened in Kurunegala on Tuesday.

We will supply goods to co-operatives to lower prices. That would help the co-operatives to provide goods to consumers at cheaper prices. Our intention is to develop all Co-op Cities and mini Co-op Cities under a one model within the next five years. Steps have also been taken to strengthen the Co-operative banking system as the people have placed a lot of confidence on it. On a directive of the President, we hope to introduce a new pension scheme for co-operative employees as well.

Q: Will you be expanding the Lak Sathosa network, including in the North and the East?

A: At present 244 Lak Sathosa outlets have been opened countrywide including the North and the East provinces. We will open 250 Lak Sathosa before the end of this year. A special motel type Lak Sathosa project will be introduced in the Northern province. A decision has also been taken to computerise the Lak Sathosa network. The Ministry through Lak Sathosa intends to offer an effective service and provide goods to consumers at lower rates.

Q: Many people do not know about the low prices at these Co-op Cities and Lak Sathosa outlets. How do you intend to popularise them, in the face of stiff competition from the private supermarket chains which are aggressively marketing themselves?

A: Though we have opened these outlets, a proper advertising campaign has not been carried out to popularise them. We will launch a new advertising campaign to educate the consumers and attract them towards these Co-op Cities and Lak Sathosa outlets.

At present the prices of these outlets are nearly 20 percent lover than the prices in the private sector. A Kilo of sprats is at Lak Sathosa and Co-op Cities is Rs. 275. A Kilo of sprats is over Rs. 500 in the market. In supermarkets it is Rs. 800. The goods sold by Lak Sathosa and Co-op Cities are of high quality.

Q: What are some of the main consumer friendly initiatives proposed in the Budget 2011?

A: The budget has provided relief to consumers in all sectors. The budget has completely exempted levying of taxes from the co-operative movement. The benefit will be given to the consumer. The vehicle tax has also been reduced while lot of money has been allocated for investments. This is a positive budget introduced by the Government to take country forward. Its results cannot be seen at once. The budget does not contain mere pledges. The budget has covered all key sectors of the economy. I see this budget as a development oriented budget.

Q: There is a notion that prices of goods are going up due to various conditions imposed by the IMF and the World Bank. What are your comments on this allegation?

A: This is a statement made by Opposition Leader Ranil Wickremesinghe. He also requested us to make these similar comments when we were in the UNP. Wickremesinghe is Leader who always hangs on the IMF, World Bank and the international community. Because he does not comprehend the ground realities. He has been making such remarks during the past 17 years.

He maintained the same position on war against terrorists as well. The Opposition Leader and his yesmen are in a land of dreams. They should get down real life. President Rajapaksa only does what is needed for the country and not what is required by the IMF or World Bank. Now the Opposition Leader has commenced distributing leaflets.

He will distribute them for another 10 or 15 years as well. I am not going to respond to these claims.

What we should do is to rebuild this country the President is a leader who has the ability and vision to develop this country. Nobody will be able to obstruct the development drive launched by the Government.