Dilrook Kannangara

Economics was known as the dark science until the 19^th century. When the demand and supply curve was presented to non-economics academics and others, they asked what happens to people who cannot meet the price demanded by suppliers? They simply cannot afford it came the answer which horrified them. What if suppliers were forced to lower the price so that more people can afford it? Then suppliers go out of business and both consumers and suppliers (and the wider economy) suffer. These were not acceptable to the masses.

However, western nations stubbornly stuck to these principles starting the mid 20^th century and they prospered. Countries that followed alternative approaches that were more humane like socialism/communism and a mix of socialism and capitalism failed.

Imposing a price for rice is not a wise move. Gotabaya failed trying to do that and Anura will fail too.

Only market forces should be used to control it. If prices are too high compared to the world market, controlled import of rice can ease prices in the short term. Yes; it costs dollars but it is money well spent. For the long term, fertilizer and other agro-chemicals must be sold to registered farmers at discounted prices. Giving them cash is not the solution. Rice is not just used for consumption as a main meal. It has other uses too. This drives up the demand which is a good thing. When prices go up with the demand, it signals farmers to cultivate more. As for the consumers, the national economy must be expanded to help them afford high prices without handouts. That is a long-term remedy with no quick fixes.

Rice millers, despite being arrogant, are filling a vital, may be the most important, economic vacuum. They link farmers to consumers efficiently. No one would do it for free or for a small price. The price of being an intermediary must be paid by both ends. Otherwise, it collapses and the fate of certain vegetable cultivators and consumers will befall rice farmers and consumers. Tonnes of vegetables go waste and prices remain needlessly high for this reason. It also puts off farmers from cultivating these vegetables. Too many government restrictions can create this situation in relation to paddy and rice.

Though Gotabaya and Anrua had economics affairs advisors, the final decision was taken by them. In the absence of economics knowledge, they rely on their morals, common sense and philosophies they believe in to make decisions. That’s when disaster strikes. Economic realities do not work according to morals, common sense or philosophies. President Anura must listen to his economic advisors only to make economics decisions. Short term price pain for a valid economic reason must be endured for long term economic growth.