Budget 2016:

Price stability, public expectation

by Rohana Jayalal

Sunday Observer Business and Finance spoke to a cross-section of the people to seek their views and expectations from the government’s first Budget which will be presented in Parliament on November 20.

A farmer of Nochchiyagama said, “We need a stable and profitable price for our products and for that the government should come up with appropriate policies. Every year farmers who cultivate paddy, potatoes, big onions and vegetables face the same issue in the harvesting season.”

The government has guaranteed a minimum price of Rs. 50 per kg for paddy but it does not work and today the market price has dropped below Rs. 25 per kg which is below the cost of production. The Paddy Marketing Board cannot purchase a major portion of the harvest and, therefore, always fails in influencing the market price. To protect potato and big onion farmers the government should curtail imports of these items before the local products come to the market. Local production of these items is only a small portion of demand.

An agriculture sector expert said the government should have a market based approach in addressing these issues in the agricultural sector. A guaranteed minimum price is not a practical solution and every year the government pumps billions of rupees to purchase paddy which fails to stabilise the price.

The PMB incurs huge losses every year and government intervention contributes to the fiscal burden. The Government cannot intervene in the markets of perishable commodities such as potatoes, big onions and vegetables. As a result farmers are affected.

The Government cannot give a higher price to farmers and a low price to consumers simultaneously. The only solution is to curtail imports through higher taxes and let the prices of these agro products be at a higher level. There are only few commodities and, therefore, it would not be a big burden on the consumers.

Sustainable growth in the agriculture sector and increase in income for the rural community would create a positive impact on the economy.

Strengthening the agricultural supply chain is another way the government can address this issue. Setting up dryers for paddy, warehouses, cold stores and other storage facilities for perishable commodities will help address the problem to a great extent. The Government should consider tax concessions for these sectors, he said.

The agriculture extension service is not working properly and there is no proper information service for farmers. Cultivation planning through better information sharing will help avert such market issues.

Restrict imports - Businessman

Managing Director, Abaya Industrial and Marketing (Pvt) Ltd., Robert Abayasekara said duty-free imports should be restricted to BOI-approved hotels and apartment projects. Most of the equipment can and are manufactured in the country. By granting BOI facilities the government is encouraging imports than promoting manufacturing in the country.

Investments on vocational training should be increased as there is lack of skilled workers.

Steps should be taken to provide loans for small and medium sector enterprises without collateral as they should be supported for long term economic growth.

Tap local resources - Jaffna Chamber

President, Chamber of Commerce and Industry, Jaffna, Kularatnam Vignesh said the fisheries, agriculture and tourism sectors in the North have enormous potential to contribute to regional and national economic growth.

The vast resource available in the region to develop these sectors have not been adequately tapped to boost the local economy.

“The lack of new technological facilities such as state-of-the-art storage and packaging facilities have hindered growth in the fisheries sector.

There is a huge scope for growth in tobacco and onion cultivation in the area which is hampered by imports. Steps should be taken to curtail imports and protect local farmers.

The absence of modern facilities have paved the way for exploitation of middlemen.

The lack of transportation and accommodation facilities have discouraged entrepreneurs in the tourism sector which has vast potential for development in the area.

The opening of the Kankasanthurai harbour will be a huge benefit to the development of business.

Launching of connecting flights to Jaffna through the Katunayake airport instead of visitors having to travel to Ratmalana to take a connecting flight which is a huge cost and a waste of time will help promote tourism in the North which has ample scope for eco-tourism.

Guranteed price for fresh milk - Anuradhapura farmer

R.M. Punchibanda, a farmer in Anuradhapura said there were nothing much given to the agriculture sector in past Budgets. Farmers want a guaranteed price for dried chillies, onions, potatoes and paddy.

“We also call for a guaranteed price for locally-produced fresh milk and increase the price of a litre to Rs. 70 or 80.

The fertiliser subsidy scheme at Rs. 350 per 50 kg bag for paddy cultivation needs to continue.

The development of irrigation projects in the dry zone will help the paddy farmers in a major way,” they said.

Farmers could produce enough chillies, onions and potatoes and paddy to meet local demand.

In addition to the guaranteed price of paddy at Rs. 80 per kilo, seed paddy must be supplied free.

Increase Samurdhi allowance - Samurdhi beneficiary

A few three-wheeler drivers in Pettah said, “Although President Rajapaksa had proposed a pension and insurance schemes for tri-shaw drivers in the 2014 and 2015 Budgets it was never implemented.

“We request this relief to be provided in the next Budget.”

The Samurdhi allowance should be increased to Rs. 5,000 monthly for a family of four or more, Rs. 3,000 for a three-member family and Rs. 2,000 for families with less than three members.

The monthly allowance for the elderly needs to be increased to Rs. 5,000 and special recreation centres and facilities should be provided for them, a Samurdhi beneficiary said.The government should provide 50,000 scholarships to students of low income families. The stipend of Rs. 5,000 monthly to university students should continue, a teacher said.

The previous government proposed a pension scheme for apparel sector employees but without success.

We hope the government will fulfill this in the next Budget.

The facility of loans should be extended to apparel sector employees too, a few garment employees said.

As the public servants benefit from salary increases and increase of cost of living allowances, the private sector employees too should get similar benefits, they insisted.Pavement vendors Manjula Kumara, Faizer and Somalatha Hewage said that pavement vendors and small-scale self-employed people should be exempted from Local Authority levies.

The government should provide suitable locations for us to continue our business.

Secretary, Womens Employees Association, Free Trade Zones, Ms. Dilrukshi Perera said that the minimum salary of employees of the Katunayake, Koggala and Biyagama zones which is Rs. 15,000 should be increased by the Budget.

There is absolutely no relief for FTZ workers. Their living conditions are pathetic and the Government should have been more considerate towards them as they earn a large amount of foreign exchange.

Funds for the construction of hostel facilities for free trade zone and export zone employees, are a top priority, they said.A retailer in Hendala said the shortage of coins has been a persistent issue for retailers.

He said the narrow profit margin for retailers is a major challenge to sustain businesses.

The adjustment to the supper market taxes this year have adversely affected retailers who have lost a large number customers who purchase goods from supermarkets at almost the same price as in retail shops.