Sri Lanka’s Economic Centres fail to Benefit Farmers and Consumers

• 5opn1
• November 25, 2024
• Business News
• Sri Lanka’s Economic Centres fail to Benefit Farmers and Consumers
• 0 Comments

Sri Lanka’s dedicated economic centres are currently controlled by few entrepreneurs by providing opportunity for middlemen to earn profit leading the prices of locally produced vegetables and fruits sky rocketing as the mechanism has not been established properly, country wide farmer’s organizations complained. .

These organisations along with consumer protection societies are urging the new government to set up an establishment as C.W.E. by bringing all Economic Centres in the island under one Trust in order to meet out justice to both the farmer and the consumer without middlemen’s interference.

In a country where 19 DECs were established for direct transactions between farmers and buyers, their failure to eliminate intermediary involvement has led to discontent on both ends: farmers and consumers, they said. .

Thus, DECs were to act as open marketplaces for the wholesale trade of vegetables and other agricultural products.

The farmers can directly bargain with the wholesalers. However, many farmers report difficulty selling their produce, while consumers complain about inflated prices.

One striking example is the price markup for carrots: bought at Rs 120 in regions such as Nuwara Eliya, they can sell for as much as Rs 400 at the Negombo market, due to the middlemen who dominate these centres.

Farmers’ organizations feel that the present system has allowed too many intermediaries to flourish, needlessly jacking up prices.

The farmer groups and consumer advocates are pressing the government to set up a centralised trust, on the pattern of the defunct C.W.E. – Cooperative Wholesale Establishment, to manage all economic centres and bring these under one management umbrella to weaken the middlemen’s grip and allow a just price both to the producer and the consumer.

Farmers say that if put into operation, this system can be operative within three months and they can sell their produce without any problem and at better prices.

Despite support for farmers, many are still struggling to thrive, facing higher prices of improved seeds and fertilizers, crop yield irregularities, and general absence of reliable agricultural credit.

Many are forced to take loans with high interest while illegal food imports destabilize the local market further.

Even in good seasons, they often find themselves unable to sell their produce at profit. While the government still maintains a fertilizer subsidy, it has not been increased and also not distributed to food and vegetable farmers, making their livelihood increasingly hard to manage.

The concept of economic centres was mooted in 2000 under a United National Party government initiative led by then minister Bandula Gunawardana.

The first centre in Dambulla, designed with modern facilities like cold storage, remains incomplete decades later. Prior to the establishment of DECs, small traders directly purchased and transported produce, keeping prices stable.

On their own, farmers delivered goods to major markets in Colombo, Kandy, and other areas by organised transport associations that distributed the produce at that time .

Today, that is no longer the case. Produce is taken by farmers to the nearest economic centre using mostly their means of transportation.

However, prices crash during peak seasons because of bulk supplies, thereby leaving many farmers without profit.

Unsold vegetables at times get discarded or even used as animal feed. Prices soar during off-seasons, which large-scale farmers who complete their harvest ahead of the season and those small-scale farmers who defy seasonal planting benefit from.

Over time, a few large traders have taken over each centre, and gradually, they have created a monopoly over the market.

A monopolistic market situation squeezes small and medium traders out of the market and heightens consumer prices. This way, both consumers and producers feel they are caught in a web of high costs and low returns.

In response, farmers and consumer advocates are demanding reforms to return the DECs to their original purpose: “fair price through efficient direct sales channels, untainted by middlemen.

CNL NEWS