Polypropylene sacks versus plastic crates

Top-down decision-making, centralisation of power and authority, lack of consultation with stakeholders, lack of accountability and the arrogance of political power are all factors which featured heavily in the socioeconomic environment of 2011 in Sri Lanka, mainly due to the lack of public consultation in the decision-making process.

As Nobel Laureate Amartya Sen, writing in the Financial Times of London about India, has said: “What is needed is much greater public engagement in the central demands of justice and development, through more rigorous democratic practice – what Walter Bagehot and John Stuart Mill saw as “government by discussion.’”

Lack of public consultation

This phenomena, lack of public consultation, has been manifested across the board, from the campaign for the Hambantota Commonwealth Games – for which there has not been an accounting of expenses placed in the public domain, to the location of cricket stadiums and the decision as to where international matches are to be played, the accounts of the Cricket World Cup – we are told that hard disks have been removed from computers by an ‘invisible hand,’ as far as the public is aware the body to which the hand is attached has not been discovered, the Indian film festival for which the mega stars did not turn up and the hotels have not been paid for the rooms booked and occupied or unoccupied, urgent legislation to take over business, both local and foreign to revive them, when attempts are being made to woo foreign investors and the powers that be are issuing pleas to improve the balance of payments, the GCE A/L results and the Z score fiasco, the murder and assault of tourists at Tangalle, the list goes on and on, the same mistakes are made over and over again.

They happen invariably at the interface between a decision taken in a highhanded matter sans consultation and the time at which it moves into the public domain, the time of implementation or whenever.

One is reminded of the saying that it is only a prize winning fool who refuses to reflect upon and learn from his own mistakes. Most recently while a group of officials have been appointed to inquire into the GCE A/L fiasco, a minister (not the minister of education or higher education but one whose assigned subject is young people, thousands of whose futures have been jeopardised by the fiasco) is supposed to have declared that the cause was something to do with one data entry operator doing the work of three.

If this is so, then the most sensible next step would be for the committee of officials should declare itself redundant without further waste of public time and money! This is second guessing par excellence!

As Scots poet Robert Burns said:

The best laid schemes of mice and men

Go often awry,

And leave us naught but grief and pain,

For promised joy!

Biggest blunder

But by far the prize for the biggest blunder, in the domestic economic environment, was the directive that vegetables and fruits must be transported in plastic crates from a certain date and that the powers conferred by the Consumer Affairs Authority Act will be used to enforce the order.

It is well known that for any product which reaches the consumer, there is an interconnected chain of supply with a number of intermediaries who all play a vital role in every aspect of producing the goods and placing them before the consumer.

The small holder farmer, who grows fruits and vegetables in his homestead and harvests/ his produce and transports it to his rural weekly pola or fair, where the wholesale dealers collect the goods. A study of the weekly pola circuits in the Kurunegala District done some time ago by the ARTI provides an excellent account of how the traders and small scale producers interact and their mutual dependence.

The produce is transported to the pola by bullock cart, bicycle, hand tractor, bus or three-wheeler packed in polypropylene sacks which have replaced the traditional jute gunny sack. Some collectors come to the farm gate to collect the produce from the farmer already packed in polypropylene sacks.

Some cultivators who grow traditional and non traditional items for the export market and to supply the super market retailers have been trained to pack their produce into plastic crates provided by the purchaser which are delivered to the farm gate.

In time this is bound to catch on as farmers and traders realise the saving on wastage by careful packing. The farmer buys his inputs such as fertiliser in the polypropylene sacks and there is no need to purchase them as in the case on the plastic crate. So it is fundamentally an issue of cost and convenience.

The next phase is the wholesale collector taking the produce to the nearest whole sale collecting centre. For this phase too polypropylene sacks are used, there is much resultant damage to the produce due to the maximum space on the trucks being used and the vehicles are grossly overloaded.

Post harvest losses of up to 30% have been recorded by some researchers. At this phase there is a sound argument for the use of plastic crates. The losses have been estimated to reduce to 5%. However the drawbacks are the cost of plastic crates and the fact that the volume of goods which can be packed into an average truck is much less with the plastic crates when compared with the polypropylene sacks. The argument is that there would be a saving due to less wastage but a hard-headed middle man trader would need some convincing.

If a system for the distribution of plastic crates so that they are available at a reasonable cost and could be transported back to the regional markets from the major whole sale markets could be worked out, it might be feasible to use the plastic crates. This is within the realm of what is doable.

Before refrigerator trucks were used for the transport of fish, wooden crates were used, and the fish packed in ice and saw dust in the crates. There was a system by which the trucks returning to the locations where the fishermen landed their boats carried the empty wooden crates back. If nest-able plastic crates were used, this would greatly alleviate the space for transport problem.

From the whole sale centres located in the outstations, the dealers repack them and dispatch them to the retail markets for the consumer depending on the demand. Here again the use of the same polypropylene sacks are used, for the same reasons, resulting in the same problems, as described earlier.

It should be feasible for plastic crates to be made available for hire at these whole sale centres which traders could hire and repack the produce for dispatch to the consumer. But such a crate hiring business must be first started by an entrepreneur before compulsory use of plastic crates is decreed.

The next phase is the consumer who visits the retail market and buys his requirements in small quantities and carries it home in polythene ‘sili sili’ bags.

Substitution point

In this fairly-convoluted supply chain, let us consider at what point and by what method plastic crates could be substituted for polypropylene sacks. There is no doubt in the argument that once the switch is made, post harvest losses will be greatly reduced and at all points of the supply chain, the small holder producer , the rural collector who services the weekly pola circuits, the outstation regional whole sale dealer, the urban and rural retail trader and the consumer will benefit.

To my mind and judging from the literature on the subject which has appeared in print and on the internet in the last few weeks, unless a free of cost supply of crates system is introduced, it will not be practical to insist on crates in the first link of the supply chain. That is from the grower to the rural whole sale collector.

However over time, as the demonstration effect of fruit and vegetable exporters supplying their selected growers with plastic crates and super market chains also introducing the plastic crates to their growers and suppliers and reduction from losses due to waste, there will be an awakening of growers minds to the advantages of using plastic crates. But this will necessarily take time.

However, from the second phase onwards, it is extremely feasible to introduce plastic crates, as the volumes of produce dealt with are large enough for there to be substantial savings from loss due to wastage, due to crushing in polypropylene sacks.

Hearts-and-minds operation

But it is important to accept that when dealing with an educated, articulate public as ours, these things cannot be done by issuing unilateral orders. The population must be conditioned to understand and appreciate the benefits of the change. It is a hearts-and-minds operation. It is the selling of a concept. There are a number of problems, over and above the fear of change; the fear of venturing into new ground by tradition-bound people.

The first would be, who pays for the plastic crates? As stated earlier, the polypropylene sacks already reach the farmer conveying his inputs and if more are necessary, then he can purchase them from any nearby retail shop. They cost around Rs. 30 each. In contrast the plastic crates costs around Rs. 600 for a small one and Rs. 1,100 for a large one.

The polypropylene sacks can be reused a number of times but do not last very long, but since replacement is cheap, this is not an issue. The plastic crates are guaranteed to last two years but due to rough handling, the utility timeframe is less. Clearly farmers and rural pola level collectors will not be able to afford the initial capital outlay. A free distribution is not affordable and will end up in abuse.

The Government claims to have distributed around 150,000 plastic crates free of charge. Unfortunately this largesse, with taxpayer’s money, did not diffuse the public anger at the order to use plastic crates only from a given date!

The ideal solution would be for a number of entrepreneurs to set up a business of supplying/hiring crates. These business persons would then arrange for the delivery, collection, return and reuse of the crates. But they would need incentives to start up such a business and concessionary financing, etc. I referred earlier to the pre-refrigerator trucks era of fish wholesale dealers, how the wooden crates were transported up and down.

The second issue would be the type and design of crates which would suit our climatic and environmental conditions. Either nest-able crates or collapsible crates will facilitate transport. The durability of the type of plastic is important. The crates will be the target of rough handing at distribution points. Due to the high cost they will have to be reused a number of times. Polypropylene plastic crates some commentators and researchers say may not be strong enough. High density polythene crates would be more durable, but will be more costly.

The third issue would be hygiene. Polypropylene sacks can be washed, cleaned and dried. Indeed the washing of fertiliser sacks in water ways is said to be a major source of pollution. But the process is simple. The plastic crates are more prone to contamination by microorganisms such as bacteria, fungi, viruses, etc. due to the way the crate is structured and shaped. Standards will have to be laid down and best practice introduced for the crates to be washed with disinfectant before use. This will add to the cost.

There is also a capacity issue. A polypropylene sack has a capacity of around 50 kg of vegetables or fruit. But the average plastic crate holds only around 30 kg. The polypropylene sack can be securely tied or sewed up to ensure that there is no pilferage while is transit. On the other hand the plastic rate has no lid, so there is no way to ensure that there will not be pilferage in transit at the various points in the supply chain, where independent traders and transport contractors are involved.

The average truck can take more numbers of polypropylene sacks than plastic crates, this adds to reduction of volumes which can be carried in a single journey and puts up transport costs. The porters at the wholesale markets can transport more numbers of sacks in their hand carts or on their backs, than crates. This again will increase costs.

Very real issues

These are all very real issues which concern critical people at the various points in the supply chain from the grower to the consumer. The Government may have had the best intentions when they deemed that plastic crates must be used by a given date, after giving a series of extensions of the deadline.

Whatever the intention, this is one sector in which at all levels of the supply chain the people concerned are organised in one way or another, from the farmer organisations to the wholesale dealers to the transporters to the retailers to the consumer. A much greater effort should and could have been made, through a process of public consultation to convince all these people of the virtues of using plastic creates instead of polypropylene sacks.

The demonstration effect of the super market chains supplying their growers with plastic crates and ensuring less wastage in transit and thereby being able to price their produce competitively in their outlets would certainly have been attractive to the policy makers. But a scientific analysis of the supply chain, the costs involved in the conversion from polypropylene sacks to plastic crates should have been done and placed in the public domain.

Consultations with farmers’ organisations, also with wholesale traders’ organisations, transporters, retailers and consumers should have been held in public or on television and radio. The model of public hearings of the committees of the Congress in the US, with live television coverage, comes to mind.

The general public and interested parties must have the confidence that all issues which concern them have been ventilated and discussed and all options looked at, before a final decision is arrived at. This is the very core of transparency, openness and trust. Consultation, compromise and consensus must take place and be developed. Let’s hope we will have more of this in 2012. Otherwise as Robert Burns said: “The best laid schemes of... men” will keep going ‘awry’!



(The writer is a lawyer, who has over 30 years experience as a CEO in both government and private sectors. He retired from the office of Secretary, Ministry of Finance and currently is the Managing Director of the Sri Lanka Business Development Centre.)