Editorial
Soft punches thrown at heavyweights
Saturday 11th January, 2025
The government has announced a concessionary loan scheme for small and medium-scale (SMS) rice millers and cooperative societies to purchase paddy during the current Maha season. The Treasury has set aside Rs. 10 bn for that purpose, we are told. Successive governments have provided such loans to SMS millers.
One may recall that in February 2024, the Treasury announced that the SMS millers and warehouse owners could obtain loans ranging from Rs. 25 million to Rs. 50 million each under a concessionary pledge loan scheme for paddy purchase during the 2023-2024 Maha season. It was reported that the loans would have to be repaid in six months, and Rs. 9 billion would be disbursed. But that loan scheme did not help make a dent on the problem of powerful millers dominating the paddy market. Such measures could therefore be considered soft punches thrown at heavyweights.
It is doubtful whether the loan amounts to be made available to the SMS millers and cooperative societies will be adequate vis-à-vis the financial prowess of the big-time millers they have to vie with against tremendous odds in purchasing paddy. Most of all, they do not receive funds in time for the commencement of harvesting. The state machinery and lending institutions are geared towards serving the interests of the wealthy millers, who also have politicians on a string.
Worse, large millers double as loan sharks in the rural sector. Many paddy farmers obtain loans from them before the commencement of cultivation seasons on the strict condition that they do not sell their paddy to anyone else. Thus, the Millers’ Mafia keeps the farmers in bondage to all intents and purposes and buys their paddy at unconscionably low prices. Some agricultural experts have pointed out that these millers also keep part of their paddy stocks with the farmers who are beholden to them, and hence it is difficult to trace the hoarded paddy.
Interestingly, the rich millers have taken on the heartless microfinance companies that provide loans to farmers at exorbitant interest rates, and employ draconian recovery methods. They accuse the latter of exploiting farmers! There is hardly any difference between the Millers’ Mafia and the ruthless microfinance companies, where the exploitation of the farming community is concerned. No government has made any serious effort to liberate the hapless farmers from the clutches of the unscrupulous millers and other Shylocks.
President Anura Kumara Dissanayake declared in his New Year message that his government had, inter alia, the goal of eliminating rural poverty high on its agenda. Economically empowering farmers will be half the battle in tackling rural poverty. This ambitious goal however will remain elusive as long as politicians and political parties benefit from the largesse of the big-time millers and baulk at doing what needs to be done to protect the farming community against exploitative practices.
Let the government be urged to make funds available to the SMS millers and cooperative societies expeditiously in sufficient amounts if it is genuinely desirous of making the paddy and rice markets really competitive to safeguard the interests of farmers and consumers. Usually, by the time the government reaches the starting block, the big-time millers are already halfway down the track, sprinting.
The provision of soft loans for paddy purchase is welcome, but much more needs to be done to prevent paddy/rice market manipulations and the exploitation of farmers and consumers. The need for a pro-people government capable of dealing with the exploiters in the garb of millers and wholesalers, with a firm hand, cannot be overstated.
Editorial
Rejects in overdrive
Friday 10th January, 2025
The JVP-led NPP government has announced that its ongoing programme to rid private buses and trishaws of unauthorised accessories and enforce road discipline will go on despite protests. However, following a discussion with the private bus owners, the police have reportedly announced a grace for compliance. It is hoped that noncompliance will be severely dealt with thereafter. Nobody must be allowed to trifle with the law.
Some Opposition politicians are shedding copious tears for the bus and trishaw mudalalis. SLPP MP Namal Rajapaksa has said something to the effect that the government should be lenient. The Rajapaksas’ leniency towards lawbreakers is only well known. They unashamedly shielded even notorious characters like Mervyn, and numerous other rowdies, some of whom went berserk in Parliament in 2018. The members of the former ruling family and others of their ilk, still reeling from last year’s shocking electoral defeats, are making a desperate bid to gain political traction. Some of them have the chutzpah to proffer unsolicited advice to the incumbent government on how to run the country!
Worryingly, the NPP government continues to provide a bunch of political rejects with rallying points, albeit unwittingly. They are on the offensive although they are not in a position to convince the public that they are an alternative to the incumbent dispensation. They cannot even criticise the government in a credible manner without being exposed for stretching the truth and hypocrisy. Some of their absurd claims make one wonder whether they have been able to realise the gravity of the country’s economic situation properly, far less think of a solution.
The Opposition lacks pragmatism, and its leaders except a few like Dr. Harsha de Silva talk nineteen to the dozen, and their circumlocution about economics signifies nothing. They have condemned the ongoing IMF bailout programme as an evil, but they have stopped short of offering any alternative. The same holds true for the non-parliamentary oppositional groups. The Frontline Socialist Party has sought to belittle the increase in Sri Lanka’s foreign currency reserves, which amount to more than USD 6 billion. It is also demanding an immediate end to the IMF programme.
In 2022, the Gotabaya Rajapaksa government sought an IMF bailout when the country’s usable forex reserves plummeted to about USD 20 million. That regime was left with a choice between a soft default and a hard default. It opted for the former. True, an IMF programme is not a long-term solution in itself. Nobody likes the IMF’s constricting loan conditions, which are extremely painful to the people, especially the poor, but it is a sine qua non for economic recovery. Sri Lanka will have to shore up its foreign currency reserves by increasing exports and attracting foreign investment, among other things, to achieve economic recovery.
In fact, the IMF has asked Sri Lanka to do what the latter should have done of its own volition years ago to prevent the current economic crisis. If the Gotabaya administration had asked for IMF help at the first signs of trouble, economic recovery would not have been so difficult and painful.
A claim the SJB is propagating is that the Rajapaksa-Wickremesinghe government undertook to resume debt repayment with effect from 2028 although the IMF had agreed to a grace period until 2033. It has not furnished credible evidence in support of its claim. Dr. de Silva found himself in an embarrassing position in an interview with Derana TV, last week, when he was asked to comment on his party’s aforesaid claim. He should not try to defend the indefensible and ruin his image as an economist.
One can only hope that the political rejects will not get an opportunity to make a comeback by capitalising on the NPP administration’s bungling.
Editorial
Tell bus mudalalis where to get off
Thursday 9th January, 2025
President Anura Kumara Dissanayake’s signature project, ‘Clean Sri Lanka’, is experiencing some teething problems. One of this catch-all project’s objectives is to enforce road discipline, the absence of which is the main reason for the ever-increasing fatal accidents which snuff out precious lives at the rate of seven or eight a day. As for road chaos, the worst culprits are the undisciplined private bus and trishaw drivers, who are now all out to prevent the police from depriving them of the freedom of the wild ass they have been enjoying all these years under successive governments.
Private bus owners are on the warpath. They have threatened to stage a countrywide strike unless the police abandon the ongoing operation to prevent traffic law violations and strip private buses and trishaws of unauthorised accessories. Speculation was rife at the time of writing that the private bus operators were likely to succeed in their endeavour. A bus strike is something that a new government needs like a hole in the head.
Some bus mudalalis and tuk-tuk drivers have sought to give their campaign against the police a religious twist; they claim that the police are ordering the removal of dashboard Buddha figurines. Private buses and trishaws are mobile shrines with various religious icons obstructing their drivers’ field of vision. All these objects must be removed to ensure road safety. If the drivers who display them are as religious as they claim to be, they should be compassionate and considerate towards others, especially their passengers. In fact, the police are doing a great service to religions by removing the icons associated with them from the vehicles driven by undisciplined individuals.
It is a supreme irony that the private bus operators who readily followed the JVP’s illegal orders in the late 1980s, are now refusing to obey the law under a democratically elected JVP-led government!
The police insist that their special operation to discipline private bus and trishaw drivers is legal, and their claim can be thought to stand to reason, for the owners of private buses and trishaws have not challenged their action in court. Instead of resorting to legal action, the protesting bus mudalalis and trishaw drivers are trying to leverage their political connections to scuttle the ongoing programme to enforce road discipline. They overwhelmingly backed the NPP in last year’s presidential and parliamentary elections, and in doing so, they endorsed, among other things, the NPP’s solemn pledge to restore the rule of law and ensure that nobody would be above the law. Now, they are pressuring the NPP government to bend the law to safeguard their interests. With supporters like them, who needs enemies?
When the NPP enlisted the support of the trishaw and private bus fraternities to win elections last year, we warned it that it was making a huge mistake. It could have won elections without their backing. The public is antipathetic towards the private bus and trishaw operators who are bent on exploiting passengers, and therefore such characters cannot help a political party gain any traction, much less shore up its chances of winning elections.
If the NPP government gives the police a free hand to deal with the errant bus and trishaw operators firmly and ensure road safety, its approval rating will skyrocket.
There were over five million nonvoters in the last general election, and the NPP may be able to secure the support of most of them by taking action to restore the rule of law, which is a prerequisite for turning this country around. Even most of those who are not well-disposed towards the NPP and voted against it in the last two elections are likely to soften their position if the government tells the bus and trishaw operators where to get off. Will the government pluck up the courage to do so?
Editorial
Rice, rhetoric and red herrings
Wednesday 8th January, 2025
It is still being claimed in some quarters that the current rice shortage has come about owing to the use of rice/paddy for manufacturing beer. Among the peddlers of this view are some powerful rice millers including Dudley Sirisena, who cannot be expected to tell the public the truth, the whole truth and nothing but the truth for obvious reasons. SJB National Organiser Tissa Attanayake has also subscribed to the aforesaid claim.
Some brewers may be using paddy/rice for producing beer on the sly, but it is not possible that their unlawful practice can affect the entire national rice supply. After all, President Anura Kumara Dissanayake, some of his ministers, the Department of Agriculture, independent agricultural experts, and market watchers have confirmed that the country produced a paddy surplus last year, and no huge increase in the local beer production has been reported during the past few months. Therefore, it does not stand to reason that the rice shortage is mainly due to the beer manufacturers’ unlawful practice at issue. Most of all, if it is true that beer manufacturing has caused the depletion of rice stocks, how come the rice supply suddenly increases when the Millers’ Mafia is given free rein to increase the prices of rice? Is it that they are capable of turning beer made from paddy into rice to be sold at exorbitant prices?
The claim that brewers are responsible for the current rice scarcity serves the interests of both the Millers’ cartel hoarding rice and the government, which is not equal to the task of tracing the hoarded rice despite its rhetoric The SJB has demanded to know why the rice shortage persists in spite of rice imports. Attanayake has asked rhetorically whether the imported rice also finds its way into breweries. The SJB is barking up the wrong tree.
The Millers’ Mafia is still capable of manipulating the rice market and keeping prices high; some of them are among the rice importers, according to media reports. Another reason for this situation is that instead of leveraging imports to bring the prices of rice down to affordable levels, the government increased the price of imported rice by imposing a 65-rupee tax per kilo. It thus safeguarded the interests of the powerful millers, who craftily offered to sell rice at the maximum retail prices, immediately after the last presidential election, thereby making the small and medium-scale millers panic and dispose of all their stocks post-haste. Today, only the Millers’ Mafia has enough paddy stocks to carry out market manipulations.
In 2020, the Gotabaya Rajapaksa government committed a mega sugar scam by slashing the special commodity levy on imported sugar at the behest of a major sugar importer who funded the SLPP’s election campaigns. Has there been a rice scam under the current dispensation? Whether anyone connected to the ruling coalition has benefited from the largesse of the Millers’ cartel, which has stood to gain from the 65-rupee import levy, remains to be seen. This is something the Opposition should make a serious effort to find out instead of being distracted by red herrings thrown in by big-time millers and their political friends.
If what we have witnessed all these years is anything to go by, more rice will have to be imported in the next few weeks, and the large-scale millers will release some of their stocks to the market thereafter, causing the prices of rice to drop in time for the beginning of the next harvesting period so that they can buy paddy at lower prices and subsequently increase the prices of rice through hoarding.
If the government is genuinely interested in looking after the interests of the rice growers and consumers, it will make more storage facilities and funds available for the Paddy Marketing Board urgently to build a buffer stock while ensuring that small and medium-scale millers have funds to purchase paddy when harvesting commences. That is the way to liberate the paddy market from the clutches of the Millers’ cartel. Mere rhetoric and table thumping will not do; the government will have to grasp the nettle.
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