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Editorial

When Scrooges play Santa

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Thursday 15th February, 2024

The Rajapaksa-Wickremesinghe government is playing Santa obviously with an eye to the next presidential election. It is allocating public funds with a generous hand for poor relief, and giving away state land. Needy families are to be given 20 kilos of rice each for the coming festive season.

Successive governments have showered election bribes on electors, especially the ones in dire financial straits. Why governments evince a keen interest in addressing problems such as poverty and landlessness, during election years, is not difficult to understand.

The SLPP-UNP government has decided to grant freehold ownership of the Mahaweli lands to farmers who have cultivated them for decades. Farmers no doubt need land. Freehold possession of land will be a boon to them. However, it is not altruism that is driving the government. It is desperate for votes.

There is no guarantee that the lands, whose freehold ownership is to be vested in poor farmers, will not end up in the hands of big businesses, both local and foreign. Given the poor returns on investment in agriculture, rural indebtedness, lack of state assistance, etc., many farmers are likely to dispose of their lands, given half a chance. Rapacious loan sharks, especially the microfinance companies that prey on farmers, will stand to gain in such an eventuality.

A study should be conducted to assess the impact of the land ownership transfer scheme on the rural agricultural dynamics. India and China are experiencing complex social, economic, environmental and infrastructural problems associated with the rural-to-urban migration of farmers in search of better economic opportunities. Cities such as Mumbai, Delhi, Bangalore in India, and Beijing, Shanghai, and Guangzhou in China are troubled by the migration of the members of rural agricultural communities.

The Cabinet has reportedly approved a proposal for exempting a section of the Madupara Sanctuary, in the Mannar District, from its current conservation status. An area encompassing 56.8 hectares including some forest land in the sanctuary is to be released in view of existing settlements and paddyland located therein. Were those settlements there when the sanctuary was established?

How advisable is it to release a part of the Madupara Sanctuary forest? There have been complaints of illegal sand mining in adjacent areas. President Gotabaya Rajapaksa, in his wisdom, had peripheral forests removed from the purview of the Forest Department and placed under the Divisional and District Secretariats, purportedly to promote traditional agriculture. We warned that his ill-conceived action would enable government backers to intimidate District and Divisional Secretaries and grab forest land. A few weeks later, a Divisional Secretary accompanied a group of SLPP supporters, who encroached on land inside the Somawathiya National Park!

The farming community is beset with numerous problems besides land issues. There is much more the government has to do to improve the hapless farmers’ lot and prevent them from emulating their Indian counterparts, who are back on the streets, demanding guaranteed prices for their crops.

Even the farmers who own land are struggling to keep their heads above water in this country. They cannot dispose of their produce at reasonable prices, and unfortunate situations where vegetable growers dump truckloads of perishables on the roadside, unable to sell them, are not rare. Paddy farmers, exploited by a collective of powerful rice millers, have sought a government intervention to ensure fair prices for their paddy, but in vain. The ruling party politicians bellow rhetoric, promising to protect the interests of farmers, but the Paddy Marketing Board is not buying paddy, according to protesting rice growers.

The government ought to adopt a holistic approach to solving farmers’ problems in a systematic manner instead of trying to gain political mileage on the pretext of helping the farming community.



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Editorial

Lessons unlearnt

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Monday 10th February, 2025

There seems to be no end in sight to the JVP-led NPP government’s diversionary tactics. Having revealed the values of the official residences occupied by some former Presidents and their imputed rents, the government has now made an issue of the amounts of state funds paid to 43 SLPP politicians as compensation for their properties burnt down by mobs on 09 May 2022 and afterwards.

Media Minister Dr. Nalinda Jayatissa has pointed out, in Parliament, that the amounts paid to the SLPP politicians as compensation are far above what the victims of natural disasters receive. Government politicians have been flogging this issue very hard in a bid to cover up their failure to address numerous problems.

The SLPP has said the damage to its MPs’ properties, attacked by rioters, was estimated by the Valuation Department, which, the government says, also assessed the values of the state-owned houses occupied by former Presidents. The NPP insists that the SLPP administration abused its power to have the values of those properties inflated. One can use that claim to cast suspicion on the credibility of the valuation of the former President’s official residences!

The NPP’s argument that one of the conditions on which the SLPP MPs elected Ranil Wickremesinghe in Parliament was that they be compensated for their properties destroyed by rioters sounds tenable. Those beleaguered MPs also wanted Wickremesinghe to ensure their safety.

When news emerged of a government plan to pay compensation for the aforesaid properties, we argued editorially that first of all it had to be ascertained how funds had been raised for the acquisition of those assets. Most Sri Lankan politicians invest black money in real estate, as is public knowledge. The NPP had three MPs in the last Parliament—Anura Kumara Dissanayake, Harini Amarasuriya and Vijitha Herath—and why didn’t they protest when the SLPP government paid compensation for the destruction of its MPs’ houses? They cannot claim that they were unaware of the payment of compensation at that time, for they even named the countries where the leaders of the past governments had allegedly stashed away stolen funds, which the NPP promised to bring back, didn’t they?

True, it was the SLPP that triggered a tsunami of retaliatory violence on 09 May 2022 by carrying out an unprovoked attack on a group of peaceful protesters on the Galle Face Green. However, that fact cannot be cited in extenuation of the subsequent wave of disproportionate counter violence, which claimed the lives of SLPP MP Amarakeerthi Athukorala and his personal security officer besides leaving a vast trail of destruction.

The NPP government must ensure that all those who assaulted the Galle Face protesters are brought to justice. An investigation must be conducted into the issues the NPP government has raised about the payment of compensation in question and legal action must be instituted if there has been any wrongdoing. Similarly, the need for a thorough investigation into the incidents of retaliatory violence on 09 May 2022 and the subsequent abortive mob attack on Parliament cannot be overstated.

The perpetrators of the attacks on the SLPP MPs’ houses, operated openly, and there have been complaints their victims made to the police, and therefore it will not be difficult to identify the culprits and prosecute them. The SLPP has alleged that some JVP/NPP activists were involved in those violent incidents. The government has denied the allegation vehemently. There is no reason why it should hesitate to order a high-level probe if it has nothing to hide.

The NPP should bear in mind that the possibility of a situation similar to what we witnessed in May 2022 occurring again cannot be ruled out. Gotabaya Rajapaksa secured the executive presidency outright and SLPP had a two-thirds power in Parliament, but less than three years after the 2019 regime change, the SLPP leaders had to head for the hills. That can happen to anyone.

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Editorial

Cat out of the bag

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One of the best kept secrets following the 2022 Aragalaya which saw the end of the Mahinda/Gotabaya regime was revealed in parliament on Thursday when the chief government whip, Minister Nalinda Jayatissa let the cat out of the bag stating that 43 former ministers had together collected over Rs. 1.2 billion compensation from the government for property lost and damaged during the tail-end of the rioting when gasoline carrying mobs torched the homes and offices of government politicians. To his eternal credit, then prime minister and later president, Ranil Wickremesinghe’s name is not among the beneficiaries although his Kollupitiya home was perhaps the most valuable of those properties that were destroyed/damaged.

Jayatissa in his speech alleged that some of those who had been compensated had pressured divisional and district secretaries to increase valuations. While it would be freely admitted that brave souls in the public service able to stand up to political heavyweights are few and far between, the people would like to know from the present regime, delighting in flaunting the misdoings of its predecessors, whether it has any intention of re-assessing the claims presumably settled? Among those massively compensated to the tune of over Rs. 60 million each were some former cabinet ministers and a deputy minister, one of whom was convicted of extortion and held cabinet office pending appeal and another who spent several months in remand on corruption charges who resigned upon being arrested.

Even an economic simpleton well knows that the value of real estate today is more related to the land on which buildings stand and very much less or not at all for the buildings themselves. So compensation payable must be limited to homes/offices destroyed by mobs. While nobody could (or should) gloat over the misfortunes of another. Politicians who lost property in the Aragalaya, however unpopular or corrupt they may have been, deserve some compensation for their losses. But as Minister Jayatissa said in parliament, compensation for ordinary people losing their homes in natural disasters is capped at Rs. 2.5 million. Why did no similar cap apply in this instance? Did the claimants have tax files and can they explain wealth amassed to build palatial mansions? And how were these payments kept under cover these many months?

Ken Balendra, one of a kind

The death last week after a long illness of Kandiah (Ken) Balendra, the first Lankan to head the John Keells Goup of companies of which he was chairman from 1990 to 2000, took away from the scene an iconic business leader who built what is probably the country’s largest business conglomerate. Balendra who had no formal academic or professional qualifications began his working life as a planter in the James Finlay managed Hapugastenne Group in the Ratnapura district and a few years later moved as a tea broker to what was then John Keell, Thompson White Ltd., a produce and share brokers under British ownership and staffed at the top by Britons. This was probably due to the professional needs of his doctor wife and schooling needs of his children.

Ken Bala, as he was popularly known, did not come from an elite family, his father serving as a revenue inspector in the Colombo Municipal Council. But his sporting prowess on the rugby field where he hooked for the first fifteen of Royal College opened the doors to a planting career to him, as it did for many other young men in the colonial and post-colonial era. While his exploits on the rugger field are very well known few remember that he was a member of the Stubbs Shield winning Royal College boxing team. Old stagers will recall Royalists of yore chanting “hook, Bala, hook,” from the sidelines during his school’s rugger matches.

After six years as a planter on the thottam, Balendra came to Colombo to work as a tea broker in one of then Ceylon’s very long established commodity broking houses. Like many planters, though lacking in book learning, he had wide ranging managerial skills and it was not long before he was appointed a director of his company. This was a time when tourism was taking off in the country and John Keells was among those seriously investing in the industry. They were the first to build a hotel at Habarana rightly calculating that it could serve tourists headed for sun and sand holiday in the east coast and those taking the sights of the ruined cities from a junction town. As head of Walkers Tours he led the company’s inbound and outbound tourism sectors taking the John Keells tourism portfolio to new heights.

As the first Lankan chairman of the company, Balendra led the conversion of the group into John Keells Holding PLC (JKH) in which employees were given preferred share allotments in the Initial Public Offer (IPO) on the Colombo Stock Exchange followed later by employee share options. This encouraged their acquisition of an ownership stake in the company in which he himself invested substantially earning substantial profits. A longtime JKH employee says in an article we republish today that the group’s culture in the Balendra years centered around the principle “play hard, play smart, play together and have fun.” He adapted long-held colonial management systems within the group to conform to modern times, had an unerring knack of spotting young talent which he nurtured within the firm to its great advantage. He was a patron of the arts with substantial JKH support for the George Keyt Foundation.

Acquisitions made during his time, including those of Whittalls and Ceylon Cold Stores brought substantial real estate assets into the group portfolio now developed into the iconic Cinnamon Life City of Dreams, the country’s biggest private sector investment. He stood up to President Premadasa who threatened to reduce the JKH share to five rupees by courageously resisting the appointment of a Premadasa-backed main board director to JKH. A public relations genius with an instinct for an opportunity and the long term view, he was a business leader who will be hard to replace.

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Editorial

Cost puzzles

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Saturday 8th February, 2025

The government has not yet disclosed its costing formula for paddy. It only releases information about cost calculations in dribs and drabs in an unorganised manner, which has left the public none the wiser. Farmers insist that their production costs are much higher than the guaranteed prices announced by the government; some of them have even claimed that the average certified paddy price should be above Rs. 140 a kilo.

Deputy Minister of Agriculture Namal Karunaratne told Parliament yesterday that the guaranteed prices of paddy had been properly worked out, and they included a 30% profit margin. The production cost of red kekulu paddy was only Rs. 76, and the farmers of that variety of rice earned a profit of Rs. 44 per kilo, he said. Interestingly, the guaranteed price of red kekulu paddy has not been specifically mentioned in government communiques on guaranteed paddy prices. Karunaratne also claimed that it cost farmers only Rs. 91 to produce a kilo of white nadu paddy, which fetched Rs. 120 although its actual cost plus the 30% profit amounted to only about Rs. 118. But paddy farmers say their production costs are much higher.

How can there be such vast cost discrepancies? Who is telling us the truth—the paddy farmers or the government politicians/officials? Will the two sides present itemised cost estimations for the public to decide whose claims are credible? The current cost calculations lack transparency and credibility. Most of all, on what basis was the 30% profit margin for paddy determined? Was it just plucked out of the air?

Deputy Minister Karunaratne told Parliament yesterday that in calculating the paddy production costs, the fertiliser subsidy had not been taken into consideration. The government ought not to ignore such vital factors when costs are estimated. The public, who bears the cost of fertiliser subsidy, must not be made to pay higher prices for rice unfairly.

Going by Deputy Minister Karunaratne’s statements at issue, the government can be accused of having facilitated the exploitation of the red rice consumers by placing the profit margin for the growers of that variety of rice far above the stipulated 30% level. The government should have taken steps to ensure that at least one variety of rice was reasonably priced for the benefit of the ordinary people who are getting by on shoestring budgets. It would also have been politically wise for the government to do so ahead of the local government elections slated for late April.

Subsidies for farmers could be considered an investment in the agricultural sector, for they help incentivise cultivators and keep production costs low. The government is duty bound to ensure that the benefits of subsidies accrue to the public, who bears the cost of them. Therefore, the fertiliser subsidy, or at least a part thereof, should have been factored in when the paddy production costs were calculated.

How does the government propose to prevent rice millers from making unconscionable profits? They have benefited from a 30% power tariff reduction, which must be passed on to the public. Rice wholesalers and retailers must also be prevented from fleecing the public. The government, which has failed to protect rice consumers against rapacious businesses bent on exploiting them, should get its act together.

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