Sri Lankan government intervenes in vegetable market prices

The Sri Lankan government is planning to intervene in the produce market by purchasing directly from farmers and fixing profit margins in yet another attempt to bring down rising prices.

Addressing traders in Colombo on December 14, Agriculture Minister Mahindananda Aluthgamage said he is “acting on the instructions of President Gotabaya Rajapaksa who has said that the unfair increase in vegetable prices must be controlled.”

As a pilot project, the Department of Agriculture will purchase fruits and vegetables from farmers and make it directly available to traders at the Economic Centres at Meegoda, Narahenpita and Welisara.

Aluthgamage said that price controls will be imposed on produce, rice, eggs and fish and traders should display these prices at their stalls.

This is not the first time that governments have tried to intervene in markets with varying results. Most attempts have been unsuccessful for a number of reasons. During festive periods, prices tend to rise and the December/January period is also when the Yala harvest comes to market, which has lower yields than the Maha season.

Another factor is that the middle-men need to keep a margin to cushion themselves from price fluctuations which can take place within a 24-hour cycle.

Source: economynext.com


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