CoL challenge

Friday, 10 December 2010 00:12 -     - {{hitsCtrl.values.hits}}

ONE thing that never fails to come with the festive season is an increase in the cost of living. As usual, the Government is introducing half-baked measures weeks ahead of Christmas and New Year to keep price hikes at bay. However, it is doubtful whether this will have the desired affect and further underscores the need for a comprehensive plan that would not hurt local industries to save the consumer.

The Government is taking a string of measures including releasing 70,000 metric tonnes of rice into the market, re-imposing control price for rice, importing chicken and appointing a Cabinet Sub-Committee chaired by the President to curb the cost of living before the festive season gets into full swing.

Cabinet on Wednesday approved a high-powered Cabinet Sub-Committee on the cost of living to be chaired by the President. It will consist of 15 Cabinet Ministers, including the Prime Minister. The committee will discuss ways and means of providing benefits of the development projects implemented by the Government to the people. They will also make necessary recommendations to provide relief to the general public – At least that is the general idea.

In addition 70,000 metric tonnes of rice that were purchased during the Maha season by the Paddy Marketing Board will be released to the market. The Treasury will be releasing Rs. 430 million for initial distribution, which will be reimbursed from the sale of rice. This decision was taken by Cooperatives and Internal Trade Minister Johnston Fernando in view of the festive season, according to the Cabinet paper.

These stocks will be issued to Lak Sathosa retail outlets and cooperative sales outlets countrywide. Moreover, the Government has also re-imposed the control price for rice; samba Rs. 70, nadu and white and red raw rice Rs. 60 per kg.

These moves come after Fernando told Parliament that extra stocks of chicken and eggs would be imported before the festive season. It was reported that he had ordered the import of 2,500 tonnes of chicken and 50 million eggs to meet the demand during the upcoming Christmas holiday season. A Trade Ministry official said the first consignment of 500 tonnes of chicken was being imported from neighbouring India.

However, the All Island Poultry Association has criticised the move, saying the Government was overestimating demand and trying to kill the local industry by flooding the market with cheaper imports. It has been repeatedly lobbying for maize price concessions and other assistance to improve the industry, which is supporting thousands of people.

Despite the projected price slashes, the reach for the consumer is limited as the goods are released only to Lak Sathosa outlets. So while on one hand the industries are made insecure, the consumers do not really get relief on the large scale. Creating a lopsided market with little relief for the large group of vulnerable sections of society should not be the result of these concessions. Focusing on a basket of goods that are essential for people would be more commendable rather than having random price slashes that do not bring benefits across the board.

Keeping the cost of living at a limited level is a strong challenge. The fact that they are making an effort is commendable, but the challenge is making it more organised and accessible to a larger number of people.