Consumer pays the price:

Dambulla EEC: Business as usual

by Gamini WARUSHAMANA

The functions of the Dambulla Especial Economic Centre (EEC), the main supply hub of vegetables and fruits in Sri Lanka continues as usual under the previous management system.

The Ministry of Consumer Affairs introduced a new system recently with a trust appointed under the Secretary of the Ministry. This trust was appointed to manage all 13 EECs in the country while earlier each EEC was managed by a seperate trust. However, it is not yet effective.

Management

A spokesman for the ministry said that the management of the EECs was reconstituted to end the mafia of traders that distort this essential consumer goods market.

Obtaining the huge income which was lost to the government for long years due to various irregularities in the tender procedure of the stalls at the EECs, vehicle parks, toilets and canteens is another objective.

Undue income

Those who lost their chances of earning undue income are protesting against the change, he said. The Traders Association of the Dambulla EEC resist this reform. The Secretary of the Traders’ Association I.A. Wijeyananda said that they totally oppose the proposed management reforms because the existing system works well.

According to the ministry, most of the stalls at the economic centre are owned by a third party and not the traders or the farmers.

Rental

The monthly rental of a stall including VAT at the Dambulla EEC is Rs.13,340 but most of them are now operated by a second party that pay over Rs.100,000 monthly rental to the owners of the stall. All these extra costs are borne by the consumers or are discounted against the profits of the farmers.

The ministry spokesman said that there are irregularities in the tender procedures followed in the lease of these stalls. Some stalls have been leased for five years, some others for 10 or 30 years.

All these irregularities have to be corrected to ensure reasonable prices to farmers for their produce as well as ensure a fair price for consumers, he said.

The Traders’ Association said that this rental cost does not affect the vegetable prices in Dambulla as the prices are determined on supply and demand and the traders get only a commission from the trade.

Sathosa

Sathosa has taken over the management of the vehicle park and cleaning service of the Dambulla EEC and the ministry expects a better and cleaner environment in the EEC.

Dambulla EEC is located in the centre of farm lands where most of the low country vegetables are grown.

It receives supplies from all over the country including Nuwara Eliya and Welimada where upcountry vegetables are produced.

After the liberation of the North and the East, trade takes place in both directions and most importantly supplies from Jaffna have made a greater influence on prices.

Traders said that vegetable prices are declining due to supplies from Jaffna. At least 20 lorries a day come from Jaffna with red onion, beet root, potatoes, carrots, plantain, capsicum and other vegetables.

Supplies

Vegetable supply from Nuwara Eliya has almost stopped as there is no production these days.

It will take another two months to restore the supply from Nuwara Eliya.

The price indices of the Dambulla EEC shows over a 600 percent vegetable price increase in the last month.

This has encouraged farmers and large scale vegetable farming has commenced in Matale, Elahera, Bakamoona and Dambulla. The Project officer of the EEC Samantha Sooriyagoda who regularly monitors market price movements says this is the usual in the perishable commodity market every year.

“There is no proper plan in cultivation. All farmers cultivate the same vegetables and finally over supply reduces the price to zero.

Annually thousands of tonnes of vegetables are destroyed in this market” he said.

Trade at the Dambulla EEC takes place on commission basis. The commission up to 10 Kg is fifty cents and it increases with the weight as Rs.2/kg for 10-30 kg, Rs.3/kg for 30-60 kg, Rs.4/kg for 60-90 kg and Rs.5/kg for over 90 kg.

Margins between producer price and wholesale price is thin but there is a huge gap between wholesale price and retail price which includes losses due to damage and transport cost.

Baskets

For instance the producer price of potatoes in Jaffna last week was around Rs.55-60/ kg and the whole sale price at Dambulla was Rs.65-67/kg.

However, the retail price was Rs.100/kg.

Although the Ministry is planning to introduce plastic baskets to transport vegetable to reduce huge post harvest losses, there is not a single trader or farmer using these baskets at Dambulla EEC.

The Management of the EEC said, around 90 percent of traders are willing to transfer to the new transport system.

However, the traders said it will significantly increase vegetable prices as transport cost will increase by two or three fold.

Traders Association said that this plastic basket system in transportation will create some other issues as well.

It will reduce the wetness of the vegetables and reduce weight. Wijeyananda said that if 25 kg gunny sacks are used the damages can be reduced.

A lorry owner who transports vegetables to Kegalle said that using gunny bags he can transport 3000 kg of vegetables.

However, using plastic baskets he can only transport 1200 kg.

Traders, farmers and transporters said that the authorities should pay their attention to some critical issues prevailing in the EEC.

Price

The actual price that commodities are traded are not displayed at stalls.

This is unfair for the farmers and there is no transparency in the trade.

The trading in the Dambulla EEC has been computerised under a project implemented several years ago.

Therefore, displaying the prices in an electronic display board is easy.

Non availability of a rest room causes difficulties for traders and drivers who travel from long distance.

Traders also said that there should be shelters to the compounds of the stalls where most of the vegetables and fruits are exchanged between farmers and buyers.