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Food Fight: Sri Lanka’s Battle for Food Security

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By Lakshila Wanigasinghe

World Food Day is observed on 16 October to promote awareness and action to ensure regular access to nutritious food for all. The blog examines Sri Lanka’s struggle to safeguard food and nutrition security amidst the ongoing economic crisis and outlines policy steps to tackle the challenge.

 Sri Lanka’s economic crisis continues to affect the lives and livelihoods of its people, with the burden being highest on the poor and vulnerable. The situation has progressed from bad to worse, with debt problems spiralling down to impact every aspect of the economy adversely.

Sri Lanka’s Food Crisis

Global disruptions including COVID-19, the climate crisis and Russia’s invasion of Ukraine earlier this year, have impacted food supplies worldwide. However, Sri Lanka’s food insecurity is largely a result of the prevailing economic crisis coupled with short-sighted policies enforced by local policymakers. The overnight ban on chemical fertiliser imports has been costly and generated a lower harvest. Although the ban has since been reversed, it continues to have ripple effects on the food system.

The drastic drop in domestic yield has driven policymakers to spend more money importing necessary commodities previously produced locally, including staples like rice. This move has been detrimental at a time when foreign reserves are lacking. Additionally, import controls imposed by the government have led to certain food items becoming scarce. These supply shortages have led to increases in the prices of essential foods. With food inflation reaching 95% in September, Sri Lanka ranks among the top five countries with the highest food price inflation.

As food becomes scarce and prices continue to rise, more people – the poor in particular – cannot afford proper meals. Adding to the problem are inflationary pressures, the inability of wages to keep up with inflation and income losses induced by the economic crisis. Thus, households are left in a predicament to reduce expenses, including cutting down on consumption expenditure. A World Food Programme (WFP) survey reveals that 79% of households are adopting food-based coping strategies to deal with the crisis.

This affects both the quality and quantity of food consumed. Families are likely to resort to cheaper and unhealthy alternatives (78% of families) due to the inability to afford high-quality, nutritious food. They are also likely to reduce portion sizes (49%) or skip meals entirely (39%), resulting in individuals not meeting their required daily calorie intake. For children, eating less directly impacts growth and contributes to increasing the already high rates of child malnutrition in the country. For adults – considering the rapidly ageing population in Sri Lanka – undernourishment implies severe strains on the healthcare system in the future.

Government Action to Combat

Food Insecurity

The interim Budget proposed to allocate LKR 46,600 million for crisis-related initiatives, including providing LKR 10,000 per food-insecure family and an additional monthly allowance of LKR 2,500 for pregnant mothers for four months respectively. A further LKR 400 million was allocated for the Department of Agriculture to provide farmers with seeds/planting material urgently and LKR 40 billion for fertiliser for paddy cultivation for the 2022/2023 ‘Maha’ season. Additionally, the government recently initiated a National Food Security Programme. The interim Budget also proposed establishing youth agriculture companies, writing off paddy farmers’ outstanding loans, etc. While the success of these initiatives is yet to be realised, it will depend entirely on the effectiveness of implementation. However, the pressure for timely success is high and critical for combating food insecurity.

Overcoming Hunger and Achieving

Food Security

While long-term strategies are needed to counter the underlying causes of food insecurity and ensure sustainable domestic production, swift action must be taken to tackle the challenge of ensuring people do not go hungry at present. Supporting immediate food needs amid the prevailing economic crisis requires a twofold effort: protecting the (1) poor and (2) farming community. In this regard, targeted measures to support the poor and near-poor through policy interventions and strengthened social safety nets are vital. The government has already allocated funds in this regard; however, successful implementation depends on accurately identifying groups at risk of starvation and providing them with immediate food assistance through subsidised products or cash transfers.

Attention should also be directed towards middle-income earners, who often get left behind in aid processes but may be in dire need of support given Sri Lanka’s current economic standing. Measures should also be taken to guarantee food availability across all parts of the country, thus ensuring equitable access. Protecting farmers’ livelihoods require adequate fertiliser availability at reasonable prices. More efficient use of fertiliser and high-quality seeds also play a role in ensuring limited supplies last longer. This will secure a harvest that can better support domestic demand next season. The government can also repurpose idle land for crop production and encourage small-scale farming.

Given the debt crisis, although import restrictions on certain foods are needed, they tend to be counterproductive. As evident from the global food crisis in 2008, trade restrictions drove up food prices rather than subsidising them. Moreover, stricter regulations should be in place to ensure consumers are not overcharged for high-demand items, as was evident for milk powder and fuel earlier this year. Minimising the high levels of food wastage (approximately 3,963 tonnes per day) also plays a crucial role in satisfying immediate food needs. Not stockpiling food, purchasing homegrown products, and consuming leftovers at a later stage/restaurants donating leftovers to the poor are ways households and businesses can contribute to combating food insecurity.

A food crisis during an economic crisis is a catastrophic scenario. Given that over one-third of the population is presently food insecure, it is imperative that Sri Lanka promptly takes corrective action. While several measures have been introduced in this regard, they must be subject to timely revaluations to gauge effectiveness. Given the prevailing resource constraints, it is natural for government support to target the poor and vulnerable solely. However, working towards acquiring international assistance to support immediate food needs, especially targeting those just above the poverty line and groups traditionally excluded from aid programmes, may also be required. These actions must be coupled with medium- to long-term initiatives that ensure sustainable food production in the future. Moreover, policymakers must be willing to be flexible and change their course of action if needed, given the volatility of the current situation. The consequences of not doing so will leave lasting impacts on the lives and livelihoods of the people.

Link to original blog:

Food Fight: Sri Lanka’s Battle for Food Security

Lakshila Wanigasinghe is a Research Officer at the IPS with research interests in poverty, social welfare, development, education, and health. She holds an MSc in Economics with a concentration in Development Economics and a BA in Economics with concentrations in International, Financial and Law and Economics from Southern Illinois University Carbondale (SIUC), US. (lakshila@ips.lk)



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Softlogic Life’s FY22 results grows to LKR 23 Bn GWP amidst tough macroeconomic challenges

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Softlogic Life recorded a superior full year performance in a crisis-affected business landscape, posting Gross Written Premium (GWP) of Rs. 23,083 million for the year ended 31 December 2022 with an increase in top-line growth of 15% compared to the corresponding period of last year. The Company has stood firmly with its policyholders in the face of the tough macroeconomic conditions, paying claims of Rs 8,264 million for the period.

During the period in review, Softlogic Life’s market share is at 16.87%, in comparison to 16.08% as of 31 December 2021. The market share increase continues to rank Softlogic Life as the second-largest in the life insurance market, overtaking much older players to establish strong growth momentum. Compared to the estimated Industry GWP growth, which was 9.6% during 2022, Softlogic Life recorded GWP growth of 15%.

The company reported a 10-year Compound Annual Growth Rate (CAGR) of 28% of GWP, while the industry 10-year GWP CAGR growth was at 14%. Softlogic Life also notes that its contribution to increasing insurance penetration in the country has increased during the period in review with 133,872 policies issued, insuring more than 1.5 million Sri Lankan lives.

Profit after tax (PAT) for the period in review rose to Rs. 2,683 million, an increase of 27% YoY. Profit before tax (PBT) grew by 36% compared to last year at growth of Rs. 1,065 million. The company’s operating expense ratio remained at 22% irrespective of the inflation hike during 2022 as a result of prudent and efficient expense management initiatives adopted. Furthermore, Softlogic Life maintained a healthy Capital Adequacy Ratio (CAR) of 287%, well above the regulatory CAR requirement of 120%.

The company recorded impressive Return on Equity of 25% and Earning per share of LKR 7.15 after providing one off provision for impairment. Recurring Earning per share for the year 2022 increased to LKR 12.85 from LKR 5.61 per share.

Commenting on the financial performance of the Company, Ashok Pathirage, Chairman of Softlogic Life Insurance PLC, stated, “Despite numerous challenges in a tough business landscape, we have performed well to maintain our position as the second-largest life insurance company in Sri Lanka, growing our market share further to 16.87% by the end of 2022. These accomplishments were facilitated by the strategies we deployed and the strong execution of those strategies that have enabled the Company to sustain momentum in spite of the prevailing macro challenges.”

Since its inception, Softlogic Life has been striving to improve the quality of life of Sri Lankans through relevant disruptive innovations and digitalization. Industry-first innovations such as one-day automated claims settlement, hospitalization claim settlement, 100% digitalized sales platform, automatic policy issuance and mobile based micro products has helped the company to deliver a superior customer experience, which has been instrumental in enhancing its competitive position.

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Foreign investors bullish and local counterparts bearish at CSE; year-to-date net foreign inflows hit Rs. 2 billion

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By Hiran H. Senewiratne

Foreigners remained bullish on Sri Lanka’s listed equities as year-to-date net foreign inflows crossed the Rs. 2 billion mark, while local investors appeared bearish at the CSE yesterday.

JKH was the major driver for foreign inflows to reach more than Rs two billion, without any specific reason, since last week, market analysts said. However, shares fell in mid-day trade over the need for further positivity on the International Monetary Fund loan being secured, an analyst said.

Both indices moved downwards. The ASPI fell by 125.28 points, while the most liquid S&P SL20 fell 43.82 points. Turnover stood at Rs 2.2 billion with four crossings. Those crossings reported in Lanka Tiles, which crossed 1.2 million shares to the tune of Rs 54 million, its shares traded at Rs 45, JKH 300,000 shares crossed for Rs 43.65 million, its shares traded at Rs 145.50, HNB 468,000 shares crossed to the tune of Rs 43.3 million, its shares traded at Rs. 92.50 and Chevron Lubricants 200,000 shares crossed for Rs 24.1 million, its shares fetched Rs 107.

In the retail market, seven companies that mainly contributed to the turnover were, JKH Rs 721 million (4.9 million shares traded), Aitken Spence Rs 302 million (two million shares traded), Expolanka Holdings Rs 126 million (664,000 shares traded), Softlogic Capital PLC Rs 91 million (5.6 million shares traded), Browns Investments Rs 82.1 million (13.5 million shares traded), Softlogic Life Insurance Rs 63.3 million (512,000 shares traded) and Tokyo Cement (Non- Voting) Rs 49.1 million (1.45 million shares traded). During the day 56.2 million share volumes changed hands in 14000 transactions.

“The overall market was pulled down because the market ran on banking shares in the past sessions, but news on domestic debt restructuring moved the market into the red yesterday, an analyst said.

Any domestic debt restructuring will be part of a negotiation process with creditors, which will take place after a program with the International Monetary Fund is in place, Central Bank Governor Dr. Nandalal Weerasinghe said.

First, financial assurances from bi-lateral creditors have to be received to qualify for the IMF program.

It is said high net worth and institutional investor participation was noted in Expolanka Holdings, JKH and Sampath Bank. Mixed interest was observed in Aitken Spence, Sri Lanka Telecom and Lanka IOC, while retail interest was noted in Browns Investments, LOLC Finance and Ex-Pack Corrugated Cartons.

It said the Capital Goods sector was the top contributor to the market turnover (due to JKH and Aitken Spence), while the sector index gained 0.19 per cent. The share price of JKH gained 75 cents to reach Rs. 145.50. The share price of Aitken Spence closed flat at Rs. 150.

The Transportation sector was the second highest contributor to the market turnover (due to Expolanka Holdings), while the sector index increased by 1.02 per cent. The share price of Expolanka Holdings increased by Rs. 2 to Rs. 194.

Yesterday, the Central Bank announced the US dollar buying rate as Rs 359.99 and selling rate as Rs 370.18.

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Japanese State Minister of Foreign Affairs visits Port of Colombo

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SLPA Chairman Keith D. Bernard presents a token of appreciation to Japanese State Minister of Foreign Affairs - TAKEI Shunsuke. SLPA vice chairman - Gayan Algewattege, SLPA managing director - Susatha Abeysiriwardena and harbour master capt. Nirmal Silva were present.

Japanese State Minister of Foreign Affairs TAKEI Shunsuke visited the Port of Colombo to learn about the ongoing developments in the Port of Colombo. The visit took place on 03rd February 2023. During the visit the Japanese State Minister of Foreign Affairs also met with the Chairman of Sri Lanka Ports Authority (SLPA) – Keith D. Bernard and other higher officials at the main control tower of the Port.

The Chairman of SLPA explained to the Japanese state minister of foreign affairs of the progress of the developments of the East Container Terminal (ECT), the West Container Terminal and the North Port Development Project. The SLPA Chairman thanked the Japanese Government and the people of Japan for the invaluable support extended by them for development of Port sector in Sri Lanka, particularly towards the Jaya Container Terminal and the developments at the Port of Trincomalee.

The high level Japanese delegation at the Port of Colombo also comprised MIZUKOSHI Hideaki – Japanese Ambassador to Sri Lanka, TUTSUMI Tarou – Director, Southwest Asian Division, ANDO Toshiaki – Executive Assistant to the state minister of foreign affairs, TOKITA Yuji – director, second country assistance planning department, IWASE Kichiro – assistant to minister /director-general Southeast and Southwest Asian Affairs Department, MATSUYAMA Miina – third secretary, Embassy of Japan in India, KATSUKI Kotaro – Minister Embassy of Japan in Sri Lanka and OZAKI Takeshi, first secretary – Embassy of Japan in Sri Lanka.

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