By Garvin Karunaratne,

Please consider getting the Army to establish the Marketing Department of the Fifties and thereby enable vegetable availability as well as controlling inflation. It can be later developed to be a major department. The total outlay can be recouped including the cost of establishing a Cannery within the first year. I can vouch for this,

My earlier paper is reproduced and if implemented now(can be done in days) will be a great feat. Thanks Garvin Karunaratne(garvin_karunaratne @ hotmail com)26/03/2020

Our President’s Clarion Call for a Remedy to high veg prices.
Posted on February 25th, 2020

By Garvin Karunaratne,

It is hoped that our President’s attention is brought to the fact that our country was the only country in the world to  have a system by which the prices of veg and fruit was unofficially controlled. That was the Marketing Department(MD) at work, buying and selling vegetables and fruit, competing with private traders, keeping a low margin of around fifteen percent to cover up cost of transport and wastage in handling.

It would behove of our President to immediately order the Army to buy vegetables from the Producer Fairs, keep a margin of fifteen percent to cover cost of petrol and wastage and sell in the Cities. Traders keep at least a total of one hundred percent  at the buying place, at the wholesale dealer in Colombo and at the retailer’s place.

The Army was entrusted with this task in the days of Premier Mahinda Rajapaksa in about 1998 and then the city was full of army lorries selling vegetables. I have seen them perform this yeoman service.

The Dambulla Economic Centre and economic Centers at many places- is not the answer, because as detailed in the Daily Mirror of 24/2 Take Immediate steps to control Veg prices: Pres. to Officials” because vegetables brought to Dambulla from the areas of vegetable cultivation are distributed back (for sale) to the original areas… these centers are controlled by large scale traders  with vested interests.” Once it was reported that the officer entrusted with the Dambulla Economic Center was severely assaulted.

It is traders that rule. When I once went to Dambulla and walked around, it was only traders. My incessant visits to producer Fairs  for over six years enables me to sniff producers from a fair distance. It will be a difficult task to find a Producer Fair in entire Sri Lanka not visited by me.

In 1955 when I joined the MD as an Assistant Commissioner we did work from small shanty type of  sheds- we called them Packing Sheds. They were all buildings built with timber, a cement floor and a corrugated cladding to keep off the rain and in a corner was housed the Assistant Commissioner working in the air and dust of onions and condiments. There were no DPJ Towers or Setsiripayas for us.  These were shed put up overnight to house the British Army when the Japanaese declared war.

In the MD,our work commenced at 4 AM in the mornings on at least four days a week, visiting Producer fairs and ensuring that we bought produce competing with the traders.

I include parts of my earlier writings, edited to avoid repetition in support.

(From:High Prices for Vegetables: Is there a remedy? Posted on January 19th, 2020 0

Once in the pre IMF days, in the days before Sri Lanka started playing poodle to the IMF Sri Lanka did have a method by which it controlled inflation.

That was the Marketing Department at work. There was a  scheme where the Marketing Department purchased vegetables at the producer fairs, brought the produce overnight to the cities and sold the produce keeping a very low margin of fifteen percent to cover up cost of transport and wastage. This Scheme which had been developed by Sri Lankan administrators and politicians was abolished on instructions from the IMF in 1978 when the Jayawardena Government caved in to the IMF. Since then it is the private sector traders that rule trade.

If only the Marketing Department  activities are restored, we can not only control inflation, but we can also reduce imports and also find employment for our people.

It is time that our new Government makes an initiative to re establish the Marketing Department activities- its vegetable and fruit marketing scheme and the Canning Factory. That will be a real achievement.

Inflation- Rising Prices is a major concern today. Sri Lanka had built up the infrastructure to control inflation. What we are seeing today-unbridled inflation, has been caused because we  did away with the infrastructure we had.

For the marketing of essential commodities, in my own words:

The Department for the Development  of Agricultural Marketing”¦ ensured that prices of all essential commodities were indirectly controlled and the traders were compelled to offer fair prices to the producers and the retail shop keepers were compelled to sell at fair prices to consumers.  This is a system that I have never seen elsewhere in the world’ ¦The motto of the Department was to pay the highest possible price to the producer and sell at the lowest possible price  to the consumer.( From: How the IMF Ruined Sri Lanka,”¦ (Godages: 2006)

 I was involved with the entire System because I was appointed Assistant Commissioner for the Development of Agricultural Marketing in 1955, and worked in the Ratnapura, Hambantota, Anuradhapura  Districts as well as was in charge of the Tripoli Market, the Headquarters of the Vegetable Marketing Scheme for a year in 1957.

 This System involved a Network of Retail Shops(Fair Price Shops) in every major city and a Vegetable  and Fruit Marketing Scheme involving purchasing, selling and processing   vegetables and fruits, a Scheme  that covered the entire island.

The entire island was covered by Assistant Commissioners in the Provinces and Marketing Officers posted in producer areas, who had to report the availability of produce, prices at the Fairs, and guide producers to plant varieties in demand.

 

The Marketing Department established Vegetable and Fruit Packing Sheds(actually purchasing units) in all producing areas. The name given was packing sheds and they were in many places in temporary buildings mostly made with timber. Even some Assistant Commissioners had their offices in these temporary buildings in 1955.

The entire Vegetable Marketing Scheme was administered from Tripoli Market, based in the largest hangar in the Colombo Goodshed.  One part of the Scheme was to purchase vegetables and fruits from producers who brought their produce to our Vegetable Packing Sheds. They were paid immediate cash. The Department was equipped with lorries that were sent to the chief  Producer Fairs in the producer areas. Thus there were mobile purchasing uints at all major fairs like Embilipitiya, Colombage Ara,  Bandarawela, Welimada, Kekirawa to mention just a few. These Purchasing Units comprised Marketing Officers and a staff of purchasing officers and labourers. The produce brought in was weighed and accepted from producers and they were paid cash immediately. The Assistant Commissioners of the Districts were required to visit all major fairs to ensure that the purchases were made regularly. When I worked in the Districts on most days my day commenced at four to get to the Fairs by six in the morning. Vegetables were purchased and packed and dispatched to Triploi by evening either by wagons(by trains) or by special lorry.

At Tripoli Market, the Assistant Commissioner  had a Marketing Officer at the Colombo Wholesale Market. His task was to report the prices at which the wholesale traders sold the produce to the retail traders and to report on the availability of produce. In the Districts, the Assistant Commissioners and the Marketing Officers had to report the prices at which private traders purchased vegetables and fruit.  Generally there was a wide gap between the prices at which the traders purchased goods and the prices at which the Wholesale Traders sold to the retail traders in Colombo. Based on these prices, the Assistant Commissioner at Tripoli Market decided the purchasing prices at which goods were to be purchased at the Fairs. This price was always above the prices offered by the traders who bought goods at the Fairs. This helped the producers and the traders at the Fairs too had to offer a similar price because otherwise they will be out of business.

On a daily basis Tripoli Market received around twenty wagon loads of vegetables and a similar number of lorries bringing in produce. These were checked and had to be in our Retail shops by ten in the morning.  Tripoli Market was a hive of activity from early morning.  Then the Railways ran a very efficient service and brought in produce in time.  For instance curd from Ridiyagama Farm in Hambantota was sent by lorry to Matara and came by night mail train to Tripoli. This was an item in high demand. The retail price we fixed for Ridiyagama Curd effectively controlled the prices of curd in private shops in Colombo.

The Assistant Commissioner at Triploi Market kept a very low margin to cover up cost of transport and handling and fixed a low price for sales to the consumers through the network of Shops. Generally the Marketing Department kept a margin of around 10 to 15% above the purchase price while the private trader at the Fair  kept a margin to 40 to 50% and the Whoelsale Traders too kept around 40% and further the retail trader too kept around 40%.  Thus while the private trader generally kept a margin of 100% or 120% over the purchasing price at the Fair, the Marketing Department kept a margin of 10% to 15%.  

The working of the Marketing Department  meant that the private traders at the Fairs and the Wholesale Traders as well as the Retail Traders in the cities had to be satisfied with a low margin.

The Marketing Department in the Fifties was headed by BLW Fernando, a Chartered Accountant and he would not allow any Assistant Commissioner to keep a higher margin than 15%. That was a rule to be followed. Every month all Assistant Commissioners had to attend a Conference where the Profit and Loss calculations were closely studied and the Commissioner would chastise all Assistant Commissioners that  had a profit of over 10% or incurred a loss.  We were expected to cover up, not to incur a loss or  to get a large profit.

This was the key method by which the prices of vegetables and fruits were kept in check. The Scheme has thus a dual aim- of offering the producer a fair price as well as offering the consumer a low price.  At times it was like walking on a rope but we got used to walk on it.

The Retail Shops had to be well stocked and full of goods otherwise the wrath of the Commissioner had to be faced.

A few years ago on one of my visits I found tomatoes being sold at forty rupees a kilo by a producer on the Mahiyangana Road, when the retail price in Colombo was around rupees eighty to one hundred, a margin of over hundred percent. This could not happen while the Marketing Department was at work. The Assistant Commissioners  were eternally traveling as they had to visit Fairs, inspect purchasing at the Fairs and the Vegetable Purchasing Depots, contact producers and offer advice on items on demand. Generally our traveling allowances exceeded our salaries.

Tripoli Marker had cold rooms where the excess produce could be stored.

This Vegetable Marketing & Fruit Marketingh Scheme  was very successful in ensuring that consumers in cities obtained vegetables and fruits at cheap rates. The Cost of Living was effectively kept in check.

 The Canning Factory

Local producers got a boost with the establishment of the Canning Factory in 1955. At that time Sri Lanka imported fruit juice and fruit from Australia and the task of the Canning factory was to produce fruit juice, jam and jellies. The Vegetable Purchasing Centers sent goods to the Canning Factory. At the initial stages in canning fruit juice many problems were faced and it took over a year to surmount them and get down to production for all Sri Lanka’s requirements. The Marketing Department offered  floor prices for pineapples, red pumpkin and ash pumpkin and producers benefited immensely. Floor prices meant that the Department will purchase everything offered at that price. Pineapple was tinned and even an export trade was built up. Assistant Commissioner Oswald Tilekeratne spread his wings abroad very often. Red Pumpkin was turned into Golden Melon Jam and Ash Pumpkin was turned into Silver Melon jam. The Factory activity made Sri Lanka self sufficient in fruit juice, jam and many other processed food within a few years.

The Marketing Department was called upon to attend to many tasks.

Once Sri Lanka was not self sufficient in eggs. The Marketing Department offered a floor price for eggs and Triploi Market collected eggs from the Negombo-Nattandiya area till Sri Lanka was self sufficient in egg production. Once Self sufficiency was  reached the scheme was disbanded.

With the abolition of the Marketing Department, and the privatization of the canning factory all this achievement was lost. That was the way in which the IMF crippled the development of the Third World and created a situation where we had to import our requirements from the Developed Countries.

Once the tomatoes producers at Hanguranketa made pandals of tomatoes in order to highlight their plight of not being able to sell their tomatoes. This could not have happened while the Marketing Department was functioning. To start with the Assistant Commissioner of the area would be held responsible. If that happened when I was in charge of The Tripoli Market I would have sent a few lorries and the entire stock of tomatoes would have been purchased within a few hours and it would have been turned into Tomatoe Sauce and Juice at the Factory. The MD had a fleet of over a hundred lorries. Today Spain produces tomatoe sauce, tomatoe juice, tomato paste and sun dried tomatoes for most countries in Europe. With a Tomatoe belt in Hanguranketa we cannot produce tomato sauce even for our requirements. Our climate had enabled a variety of crops. There is a mango belt from Anuradhapura to Matale. Even today if action is taken to pluck mangoes and process it, we can be self sufficient in all fruit juice within six months. The Chena cultivators will find sales for their Red Pumpkin,Ash Pumpkin and Melon. There is an Avacado belt from Peradeniya to Gampola and avacado juice can easily be made. The country will benefit by avoiding the millions spent on imports.

Following the liberalization free market economics of the IMF we  created a market for tomatoe sauce from the USA, and fruit juice from as far as Canada and Oregan in the USA.  Our producers have stopped producing large quantities for fear of being unable to sell and we have unemployment and our farmers have low incomes. The Colombo Supermarkets are full of Heinz Tomatoes sauce from the USA and fruit juice and jam from Australia.Even vinegar from the USA! The IMF did its work right to cripple development in our countries and for us to buy goods from the Developed Countries.  That was the Structural Adjustment Programme in action. (For more details: How the IMF Sabotaged Third World Development: Kindle & Godages) It is sad that we have   deaf, dumb and blind  economists who even fail to come to grips with how we were duped by the IMF.

I hope the Army will be enlisted for this task of marketing development. In President Trump’s USA the Army is widely used for irrigation, power station construction, even maintaining levees that keep the sea from flooding New Orleans. In my wide travel in the USA, clocking over 50,000 miles in my Roadtrek motorhome, crossing America thrice I have seen the Army at work doing non military duties on a regular basis. It is we fools that do not enlist the Army for development tasks. If at all we touch the army we call them to the barracks in a short while.

Let the Army experience of Van Sales, this time end with the establishing of a proper Marketing Department with a Cannery. The total cost of establishing a Cannery can be easily recouped in the very first year by the savings of foreign exchange we use today to import fruit juice and fruit preparations   Later on the Army venture can be handed over to a SLAS Department and the Army moved to another task- perhaps the reconstruction of our irrigation tanks.

Let me live in hope.

Garvin Karunaratne,

25/2/2020