Some policies in agriculture are ruining the sector
Certain policies adopted towards agricultural development in the country by Sri Lankan authorities in fact could be seen as negative towards the very development of this sector.Agriculture Minister Duminda Dissanayake was the first minister invited by the National Chamber of Commerce of Sri Lanka (NCCSL) in their “Meet the Minister” Programme at the chamber auditorium in Colombo this week and in a comprehensive narration he explained the procedure in his ministry and how they are working towards the formulation of a ‘National Agricultural Policy”.
There were many present involved in the agriculture business and at the question and answer session, many queries were directed to the Minister on various constraints the industry and the above is the summation of their woes and specially some of these participants were critical about the taxation policies towards agriculture.Anura Kantha Bandara, Managing Director, Bandara Industrial Service (Pvt) Ltd, lamented that `the Government last January reduced the price of imported wheat flour by Rs. 20 per kg which has created a situation for the collapse of the rice and paddy market and cautioned the government that if this situation continued it would kill the country’s rice industry”.
He said that the government has introduced a strange kind of tax of 11 per cent called ‘Deemed VAT’ on agricultural and food production items when they are distributed. Owing to this tax the margin of the distributors are extremely low and as result they are not distributing agriculture and food items – another major blow.
He said that he is a large scale rice flour miller and his factory alone supplied to the bakers and biscuit manufacturers to the tune of 200 tons per month which has now been reduced to a mere four tons. He said that more than 1,000 medium and large rice flour milling factories are now not functioning and their supply to bakeries and biscuit manufacturers have been around 50,000 metric tons per month and that whole market is lost now.
To get over this problem they are suggesting to the government, that a Rs. 30 per kg tax be imposed on wheat flour imports.
He also suggested a powerful theory to the country’s ‘Kidney Menace’. He urged the government to supply free of charge ‘Disk Plough’ to all tractors which could turn the remainder of the paddy plant in the field to be used as fertilizer. Today the amount spent on fertilizer is around Rs 56 billion and with the use of disk plough this amount could be reduced by 25 per cent.
One participant pointed out that 50 acre land ownership restriction impedes their expansion. Minister Dissanayake said that there is no restriction as such now, but their problem is that there is a land scarcity in the country and therefore, what is necessary is to use the available land to increase the production by using advanced technology.Another participant pointed out that if ‘restricted’ plantations like ‘Wallapatta’ and ‘Sandalwood’ are allowed to grow for export purposes lot of foreign exchange could be earned, to which the Minister said that they are also seriously looking into this matter too.
Another participant whose establishment earlier distributed a kind of fertilizer that contained now prohibited chemicals that is suspected to be behind the kidney problem, told the Minister that large quantities of that fertilizers are in their stores not moving and requested the Minister to give them a solution to dispose them. Mr Dissanayake declined a solution.Many participants were appreciative of the way Mr. Dissanayake handled the queries as unlike other government officials who use to evade queries, he gave a patient hearing and every single query was answered with a solution suggested.The Minister said that in agriculture there are so many setbacks such as majority of farmers are poor people and lack the use of modern technology which is of paramount importance in competing in the global market.