Govt. slaps special levy on essentials to curb imports, protect farmers

Wednesday, 7 August 2013 00:22 -     - {{hitsCtrl.values.hits}}

A special commodity levy on over 30 essential food items was passed yesterday at Parliament, focused on the protection of local farmers and producers amidst stringent objections by the Opposition. According to the newly imposed special commodity levy the price of potatoes will increase by Rs. 25 per kg and will remain for a period of four months starting with immediate effect. Among the most common food items on which the levy was imposed was Maldive fish with Rs. 275 per kg, sprats Rs. 10 per kg, dried fish Rs. 75 per kg, red onions and Bombay Onions by Rs. 15 per kg, garlic by Rs. 40 per kg, red lentils Rs. 18 per kg, yellow lentils Rs. 22 per kg, oranges Rs. 60 per kg, grapes Rs. 130 per kg, dried and chillies Rs. 150 per kg. Minister of Investment Promotion Lakshman Yapa Abeywardena, moving the notifications published in Gazette Extraordinary No. 1808/21 and No. 1813/24, stated that the price increase would help boost local production and curb imports. “We produce less than 40% of the potato requirement locally and the remainder is imported, which was reported to be 40,000 MT in 2005 at a cost of US$ 7.6 million. But in 2012, the potato demand has increased to 117,000 MT which was imported at a cost of US$ 22 million. This shows consumption has tripled and an increase in affordability. However, we have over 50,000 potatoes farmers in Sri Lanka where the cost per kilogram stays less than Rs. 55 but the imports from India are being made at less than Rs. 23 per kg. He said the special commodity levy would help to protect local farmers, which is part of the Government’s policies. “Subsequently, vegetable and fruit production will also receive a boost by this protectionism,” he said. According to the Minister, Sri Lanka has imported 11,808 MT of red onions while local production was 61,811 MT. “By 2012, our production increased to 73,970 MT against imports of 7,017 MT. This shows that the increase of local production and the reduction of imports with Government support play a key role,” said Abeywardena. The Minister said the Government anticipates an increase in consumption that prompted the decision to control imports.