War on eggs
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Many years ago when the late Kingsley Wickremaratne, Trade Minister during 1994-2000, sought to import eggs from India during Christmas and the festive season as local eggs had risen to unbelievably high prices, egg and poultry producers raised a big hue and cry. Following the protests, the plan to import eggs which would have been much cheaper than the local product, was abandoned.
I was reminded of this when Aldoris came down the lane in his food-filled tuk-tuk on Thursday morning and stopped at the gate where the trio had gathered.
“Ada monavada thiyena prashna (What issues do you have today)?” asked Kussi Amma Sera.
“Loku prashnayak – biththara wala mila. Apita ape bakery kaema visheshayenma cake karagena yanna bae, biththara wala mila godak ihalata gihin thiyena hinda (A big one – the cost of eggs! We just can’t manage with our bakery items – particularly cake – as the cost of eggs has shot up),” he said.
“Deshiya biththara mila godak wedi nam, aei apita biththara pita ratin genna beri (If the price of local eggs is so high, why can’t we import eggs),” asked Serapina.
“Ethakota ape deshiya karmanthaya vinasha wenawa (That would ruin the local egg industry),” opined Mabel Rasthiyadu.
With my thoughts on this issue as the subject of this week’s column piece, there was a call on the landline. It was Pedris Appo – short for Appuhamy, a retired agriculture expert who occasionally does some farming.
His topic of discussion was a wider agriculture issue but also involving the import of eggs.
“The cost of eggs has become a huge topic in the country these days,” he said.
“That’s right, at Rs. 65 an egg, people cannot afford this vital protein,” I said.
“The problem is that we have lopsided agriculture policies and need to stimulate the economy with policies where we produce goods for exports using local raw materials (and minimum imported input) and import the rest of the needs,” he said.
“That may be wise on paper but we are running out of foreign cash; so where do we get the extra dollars for imports?” I asked.
“Well, we need a policy where we can produce high price-yielding cash crops – one such item is coffee – for export and what we earn from exports can be channelled to import food,” he said, adding that this is a case of what the country can produce at a profit and what it should import, leaving some room for local production as food security.
Sri Lanka at the moment produces some fruits for export with this category of minor agriculture products exported in 2021 totalling US$148.8 million in 2021, compared to $134.7 million in 2020, a marginal increase last year. The export of vegetables was valued at $28.5 million in 2021, down from $36.6 million in 2020.
For these numbers to increase, the right policies to encourage more exports of agriculture products by producers need to be in place. Some time back, a local producer produced gherkins – or what is considered as pickled baby cucumbers – as a lucrative cash crop. With the demand rising for gherkins, particularly in the burgers produced by McDonald’s, this is a lucrative export. However, it was the initiative of the local gherkins producer that paved the way for export, not any government support or initiative.
At various times, there has been a discourse on whether we should import food, which is cheaper to the consumer than the local product, and stimulate exports of various products to meet this import bill. Currently many of the inputs for the production of food are imported. Take farming for example; fertiliser and pesticides are all imported and costly to the farmer. That is one of the reasons – apart from being a perceived harmful substance – why then President Gotabaya Rajapaksa banned fertiliser and pesticide imports in a now, failed adventure.
After rising protests across the country, that policy had to be reversed. Local farming is very costly due to imported inputs and often, in some cases, it is cheaper to import these products like eggs for instance, for the benefit of the consumer.
This is easier said than done. For example, government policies need to be structured in a manner which benefits equally, both the consumer and the producer. Food security is also essential and thus a portion of our agricultural produce needs to be produced locally.
Sri Lanka has everything for a successful agriculture and export-oriented economy. The country is blessed with a sea area which is multiple times its land mass with fish in abundance for local use and export, blessed with natural resources, land (whereas Singapore with limited land is one of the world’s biggest success stories in economic wealth), gems under the land, agriculture, irrigation schemes, an abundance of water, adequate sun across the year for solar power and wind for renewable energy generation.
Coming back to the topic of eggs, the production of eggs is dependent on imported inputs in the form of feed and nutrition. Then add local costs like electricity, fuel and wages, and the cost to produce an egg is much higher than importing an egg, for example from India. Earlier this week, the government approved a proposal from the Trade Ministry to import eggs and sell them at around Rs. 40 per egg compared to the current price of local eggs which trade at Rs. 65 an egg, a step that has earned the wrath of local producers.
In a report this week, the World Bank has warned that a shortage and higher cost of fertiliser and reduced rainfall in the Southern and Central Provinces are likely to reduce Sri Lanka’s harvests in the upcoming season by 50 per cent.
The report from the World Bank stated that the fallout from banning chemical fertiliser imports in Sri Lanka with minimal planning has weighed heavily on the country’s farming industry. Sri Lanka now faces impending food insufficiency resulting from reduced domestic production, along with the financial inability to import supply.
Meanwhile FITIS – the Federation of Information Technology Industry Sri Lanka – in a statement this week said that while Sri Lanka has embraced industrialisation and moved from a commodity-based economy towards a knowledge-based economy, it still remains as a middle income developing nation and the country has only a handful of companies that are operating globally. The few companies that are known globally are Dilmah, MAS Holdings and Brandix.
Sri Lanka needs to expand its economy from a mass commodity-based one and produce value-based agriculture products as niche exportable products and, in turn, import the country’s food requirements like eggs and other food products which are cheaper to local consumers. The transformation should include steps to shift producers of high-cost agriculture to, for example, high-yielding crops for export.
The trade-off would be in spending the dollars earned from exports to purchasing the country’s import requirements.
As stated by FITIS, Sri Lanka needs to expand into a knowledge-based economy as our human capital is highly skilled and professional and can attract many high tech companies to invest in Sri Lanka – again if we have the right policies in place.
As Kussi Amma Sera brought in my second mug of tea for the morning, she asked: “Biththara mila gena-da liyanne (Are you writing about egg prices),” I nodded, realising that the humble egg has become a fundamental issue in the economic-mix that the country has at present.
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