By kassapa
Rice has been the staple diet of Sri Lankans, for as long as we can remember. As a result, it has also been a political issue for decades. Dudley Senanayake was known as ‘bath dun piya’ or ‘the father who gave rice’ after promising two measures of rice to voters. Not to be outdone, Sirima Bandaranaike claimed she would provide rice ‘even from the moon’ but ended up issuing a ‘rice ration book’ for which rice was issued on a coupon system.
Times have changed. Today, the issue is simply about the price of rice which keeps soaring by the day. In the lead up to the presidential election, speakers from the platforms of the Jathika Jana Balavegaya (JJB) waxed eloquent on the issue claiming they will demolish the rice cartels who they claimed were responsible for the rice price hike, within days of assuming office.
Now, President Anura Kumara Dissanayake and the JJB are in office with an unparalleled parliamentary majority to boot. They will need to walk the talk, if not within days as promised, at least within a reasonable period of time. There can be no excuses.
Perhaps being mindful of this, Dissanayake met with wholesale rice traders last week. It was not the first such meeting. He had met with them before. This time though, there was a sense of urgency and finality about the meeting. Also, cameras were rolling. Footage of the discussion was freely made available to the media. Clearly that was part of the plan. It seems to have worked because, on circulating the footage public sentiment was clearly in the President’s favour.
Dissanayake’s argument was convincing enough. He said he appreciated the investments made by the rice traders and the challenges they faced. He understood that they ran a business and needed to make a profit. However, he pointed out that they were also the ultimate beneficiaries of a raft of subsidies pumped into the rice sector, the cost of which was borne by the taxpayer who was also the average citizen and the rice consumer. Therefore, these citizens are entitled to rice at a reasonable and affordable cost, he said. Obscenely massive profit margins cannot be allowed, he said.
He said he appreciated rice traders wanting a price that could sustain their business but could not understand how this price kept rising and the stocks of rice in the market diminishing, every week. This is what led to allegations of hoarding and creating artificial shortages to earn exorbitant profits. So, what would be a reasonable price, he asked the rice traders.
There was some discussion on the issue. The rice traders were able to suggest prices which were higher than the current prices stipulated by a gazette that was issued when Gotabaya Rajapaksa was President. Dissanayake said he would agree to them. There appeared to be no issue that was in great dispute.
That was when Dissanayake delivered his punch line. The government was prepared to accept the prices requested by the traders, he said. However, that cannot escalate anymore. He would allow about ten days to see whether this ‘gentlemen’s agreement’ worked. If it did not and rice prices rose again, he would take action, he said. What that action was, he did not say. Dissanayake’s tone, gentle but firm as it was, conveyed a subtle threat, many observers felt.
The government has already announced it would be importing some rice to cater to the demand of the festive season. That would also contribute to pushing prices down. It has also said it would monitor stocks held by major wholesale rice traders with the assistance of the Consumer Affairs Authority.
What more can Dissanayake do, if the rice cartels continue their practices? He could liberalise rice imports and that would solve the price issue for certain but it would also hurt the local farmer. One solution to that is to diversify the use of local rice, for example, diverting it to the local beer and poultry industries. That would be in keeping with the ‘open economy’, a concept which the JJB is not keen to preach but quick to practise.
More in keeping with the JJB’s political ideology, the government could also force the registration of all rice sellers, take-over rice mills and impose price controls on rice, thus following a protectionist policy. Dissanayake’s actions so far suggest that he prefers the open market policy but will he be courageous enough to persist with that in the long term given the impact it would have on the local farmer?
The question now is, who will blink first, Dissanayake or the rice traders? Or, given the massive mandate this government received, will the rice traders meekly comply? If they don’t, will Dissanayake carry out the measures that are available to him and if he does, which strategies will he pursue?
This is building up to be Anura Kumara Dissanayake’s first major political battle. Already, the opposition is taunting the JJB, publishing clips of statements made by their speakers in presidential election rallies as to how they will dismantle the ‘rice mafia’ within hours of assuming office and asking the government to do what they said they would do.
Also, the price of rice is a factor that affects each and every household of the country and is not a transient issue that will go away. It will linger, fester and multiply into a major political can of worms. Dissanayake does have the executive powers and the parliamentary majority to back him. If he takes decisive action, it pays off and he is able to control the price of rice at a reasonable level over a period of time, it will be of great political advantage to him.
Dissanayake will do well to remember that Gotabaya Rajapaksa, at the beginning of his Presidency also attempted a crackdown on the rice cartels but that failed miserably. However, in this battle between the government and the rice cartels, it appears that Dissanayake has won round one, as of now. It is a tussle that will be watched with great interest not only by millions of consumers but also by Dissanayake’s political rivals.
