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In the past two-and-a-half years there were initiatives like giving free laptop
computers and tabs and creating more infrastructure support for IT with WIFI
connectivity, which has not gone well for Government given the resounding
response of the masses during the recent council elections. So how can the
Government get closer to the people?
The population of nearly 21 million people in our nation can be divided into 30%
and 100%. This may sound rather silly because if there is one 30% then the
balance is 70%. But the 30% here are the farmers who make our food to keep our
stomachs full and the 100% all of us who are consumers in some form or other.
This Government has two-a-and-half years’ time to make the 30% farmers happy
and with that a happy nation, how?
Without our farmers we will have to starve. We can walk without motorised
transport, wear basic clothing and have simple abodes, but cannot do without
food. We cannot have a 25% full tummy because it will scream all the time. In the
Ariyawansa Sutra, the four basic needs given are clothing, food, abode and
meditation.
On one early morning the Enlightened One surveying the world with compassion
observed that a certain village farmer had the merits to attain Stream-Entry
(Sothapaththi). The Buddha went to that village and the villagers offered alms to
Buddha. The farmer woke early in the morning and finding that his herd of cattle
was not in the cattle shed, went into the jungle looking for them. Despite looking
for them for hours and not finding the cattle, he decided to come to the place
where the Buddha was and sat in a far corner to listen to Dhamma. However, the
Buddha told a Bhikku to give the farmer some food as it was of no purpose to
teach Dhamma to a person with an empty stomach.
In the next two-and-a-half years, the Government can not only moot this change
in the prosperity of farmers but the prosperity of the nation as a whole and
assure itself victory again in the next elections as a happy farming community and
consumers not burdened by the middlemen who manipulate farm gate and
consumer prices will fall behind those who brought happiness and prosperity to
them.
Situation analysis
The global escalation of commodity prices in the latter part of last decade
impacted Sri Lanka’s rice market, with retail prices showing sharp increases for
the consumer. The regulatory forces with ceiling on consumer prices and
guaranteed price for paddy did alleviate this problem to some extent. The long
drought and the subsequent floods impacted paddy cultivation. This also
highlights the need to augment the water retaining capacity of lakes by de-silting
the lakes so that more rain water could be retained. Despite various plans to
even export rice, the farmers who are the primary producers are not able to get
even the guaranteed price for their paddy.
In the vegetable sector too problems are brewing with farmers not being able to
sell their produce even at rock bottom prices and having to dump truckloads of
vegetables in garbage dumps. On the other side consumers are forced to dish out
more and more money for the daily essentials.
Nature too has not been kind to us. In early 2014 we experienced drought
conditions in paddy and vegetable growing areas with tanks drying up. This was
followed immediately afterwards by incessant rains, which caused heavy floods
and wiped out a huge quantity of paddy which was held in storage with the
farmers. Then in 2017 came the drought again in the cultivation areas.
Indeed, in 2015 a local TV channel in their evening news gave an insight into how
officials are flouting the guaranteed price, in this case for onions, with the
connivance of certain unscrupulous traders depriving the farmer of his just
income. In late 2014 the potato farmers went up in arms in Welimada. TV footage
showed how angry farmers thronged the premises of authorities demanding a
better price for their produce. The drought in 2017 dealt a severe blow to paddy
and vegetable production as well as coconut cultivation.
We have this happening time and time again, one day it is the tomato famer, then
next the potato farmer and so on. But the problem becomes very acute due to
absence of a food security policy and empowering the farmer to own the value
chain of rice and vegetables from farm gate to consumer. Thus it is evident that
Sri Lanka is in need of a mechanism to develop the market for agricultural
products in a sustainable manner, free from the clutches of officials and
politicians.
Underpinning the failings of these sectors are a range of issues emanating from
the limitation on storage for paddy procured at guaranteed price, a sustainable
return for the farmers and the inefficiencies and inequalities in the current
system. Thus the future calls for a process from the field to the plate on the table
where the influencers and the beneficiaries are the actual stakeholders.
Strategic analysis of the problem therefore needs to look at both the current
situation as well as look to the best international practices in order to devise a
new and better strategic direction for the future.
The proposed solution is no stranger to this country. Multinational companies
which are engaged in paddy cultivation in Sri Lanka already practice these
strategies from cultivation to processing, packaging, branding and marketing the
branded end product. The farmers of this nation who are citizens surely must
have a better say than the foreign multinational companies. Similar strategies can
be implemented in the vegetable and other perishable sectors. It only sets out to
contribute to a paradigm shift in the thinking and policy development in the
agricultural sector.
With an economy so dependent on the rice crop, to ignore the needs for proper,
fair and equitable support and policies for the farming community is to endanger
the very stability of society and adding further trouble to an already economically
challenged country. What is needed is a bottom-up approach to planning rather
than the traditional incumbent of a top-down system. This is true of the sector
irrespective of the geographical location within the country. Leadership from
within needs to be developed, coerced and encouraged.
Strengths
Availability of land
Farming knowledge
Ability to work long hours
Simplicity of lifestyle
Weaknesses
Opportunities
Assumptions
Adequate funds will be available at low interest rates from multilateral or other
lending agencies
Shares of industry co-ops or of the public companies restricted to actual rice
farmers only
Private sector style management
Overall objective: Develop industry co-ops or public companies where the
ownership is by the farmer at regional levels based on growing areas. Such
structures will manage the affairs of purchasing, processing and marketing
bringing a ROI to all stakeholders. It will benefit the government too by enabling
the sector to become self-reliant and increasing the attractiveness of farming. In a
wider sphere it will contribute to national growth and better wealth distribution.
Strategy options
Present the business case to the multi-lateral donors. The stated mission and
objectives of bodies such as World Bank too states that they are there to help
people help themselves. The WB Mission Statement states, “WB group aims to
fight poverty with passion and professionalism for lasting results – to help people
help themselves and their environments by producing resources, sharing
knowledge, building capacity, and forging partnerships in the public and private
sector.” Also the newly-established BRICS Development Bank objective is to
provide development funding in BRICS group and developing nations.
Quantification of the current production volumes based on the growing regions
for assessments of the desired critical mass for the creation of the units and
necessary structures
Agree upon the financing modalities
Work with the organisations in building food security plans
Use of funds
With the farmer community being in charge of the whole sector as opposed to
middlemen and to increase the yield in the utilisation of vegetables it is proposed
that a twofold approach be adopted namely:
management in rice
The fundamental in revenue management of perishable assets is the revenue
opportunity cost of the next unit of inventory or EMR (Expected Marginal
Revenue). EMR is the probability of selling the next unit of inventory. If the
probability is low, then the end consumer price too will be low. In the rice market,
with bumper harvests there will inevitably be pressure on the end consumer price
of rice. While the consumer is benefited, the drawback will be the downward
pressure on the price of paddy at the farm gate which will eventually result in
cutback in the farming acreage in the next season.Unlike in the case of fixed
inventory capacity such as airlines, hotels, cruise liners where the inventory
subordinate table is built taking into account the market segmentation for
optimisation of revenue (unless utilised at the time of departure or on the day of
occupation the inventory will perish) the same cannot be applied in the case of
commodities such as rice or vegetables where the marginal unit could determine
the price if overproduced.
Based on research findings work out the acreage to be farmed for local
consumption
Incremental acreage to be farmed with high value varieties with local discerning
upmarket segments and export markets in view
Product development, rice flour, rice breakfast cereals, rice sweets, rice based
bread, rice based noodles etc. Product differentiation and creating new products
to existing markets as well as new markets will enable to increase the EMR of the
marginal unit
Undertake research to develop new products with both local market and export
markets in view
The need for inter-regional competition to ensure that while the farmer enjoys
the benefits, that the consumer too is not disadvantaged and has choice of quality
and price in which to choose from
Proper storage facilities where rice, onions, vegetables will not perish as now.
Developing an
optimal income
management process
This will likely be a combination of guaranteed prices for products supplied plus
distribution of dividends at agreed intervals throughout the year. Within the
structure, the new organisations may decide to set aside funds annually to
establish and create an effective pension fund/EPF for the members. Over time,
the financial strength of the organisation should be such that it will be in position
to provide financing to the members on preferential terms to that of banks and
current financial businesses.
Further after a tax holiday period, the organisations could be taxed on their
profits generating income to the government.
There is need for the organisations to develop rice and other allied products
commerce data. The new organisations may wish to consider making use of
already existing resources within the community or develop their own resource
centres for upkeep of all data;
and Development
The new organisations will adopt gradual and systematic process of implementing
research and acquiring new knowledge to upgrade the rice crop in respect of
quality, varieties and volumes. This will include;
The activities of the new organisations could well develop to buying beyond the
production of its members. Further the organisations will need to have the
infrastructure in place to deal with disputes, issues and problems within the
farming community and its members.
Further after an initial gestation period the organisations could be quoted in the
stock exchange with members being allowed to sell a certain percentage of their
shares in the exchange.
Let the whole nation open eyes and see the plight of the farmers. Like the birds
being freed from the net, let us free the farmers from the net of poverty,
unhappiness and debt so that they reach the destination of peace and happiness
because their happiness will be the nation’s happiness.
Food security
All agricultural strategies in all sectors will have little impact if focus is not
directed to food security. In the developed world food security is part of the
national agenda. Japan is a good example where due to influence of the rice
farmer, rice imports are banned except in processed forms. Rice production is
also subsidised by the Government which aggravated trade friction between
Japan and USA. The Japanese position is that self-sufficiency in rice production is
important for food security.
The EU is another good example of how food security is seen by the community.
In fact, all developed nations have food security at the highest importance in
national development. By building economic strength of the farming community,
Sri Lanka can create food security and ensure that the fleecing of the consumer by
the middlemen will not take place.
The Prime Minister now has the power and the support to bring this change for
the farmers and consumers benefit, and what better time than now?
Posted by Thavam