The Onion Conundrum – a peculiarly Sri Lankan odyssey

Sri Lanka grows big onions only seasonally and harvests 90% of its local production in the months August to October, before the October rains. Therefore the Government in order to help the local onion producer had slapped an import levy of Rs50/kg in August satisfying the local farmers as imports would create an oversupply.

Those traders who knew about the import levy, were able to purchase and land their onions in the country on time, so despite them not needing to pay the higher duty, they were nevertheless able to retail their stocks at the higher prices, before the full effect of the harvest and its surplus came to the market, thereby profiting handsomely.

There is a slight difference in taste between the local onions and the generally drier and larger Indian Variety. Also I believe the Indian variety stores better and can be kept for a lot longer than the local variety and is also generally larger in size.

I do not wish to go into the intricacies of onion storage except to say that it requires some purpose built shelves, to keep out moisture and preserve dryness, something that the Indians are far better at.

So when imported onions with the lower Rs15/kg was in the market in August, the price was around Rs60/kg retail, where the landed cost to the importer at the port before the duty is around Rs30/kg, if he buys in huge quantities. Then the local variety flooded the market as soon as the harvest was sent to the market, the Govt. increased the Tax to Rs50/kg, an increase of Rs35/kg.

At that point imports stopped, as the local was retailed at about Rs60/kg, when the farmer was only given around Rs35/kg, the rest being made by the intermediate players known as middle men, who also had a stock of the cheaper imports to sell off as mentioned above. The Rs35/kg farm gate price was less than the cost of production to the farmer, and many farmers were demonstrating about it. No amount of duty increase was going to help them at that stage, merely because the supply exceeds demand, and large scale storage is not possible.

If one takes a reasonable view, the product is demand inelastic as the consumption pattern as a food item is pretty steady all year round, and the price will only affect consumption marginally. The farmers are not sufficiently sophisticated in terms of numbers to store this until prices rise, when supply weakens, and therefore they receive a low price. Middle men cannot buy and store until prices rise, as the special storage is needed just for a few months and the attendant risk of spoilage,  and due to the type of onions we have. The lack of proper storage facilities that are unique to onions, and where long life cannot be assured, as one is unable to look at a sack of onions and determine if it was harvested without being subject to a recent rain or some such moisture inducing event thereby closing that option.

After a while, when the supply reduced, the price began to rise to around Rs90/kg where farmers who were able to store it were able to sell their stock at about Rs65/kg to Rs70/kg. I must mention at this time that the Lak Sathosa outlets of the Govt. owned retail stores around the country had purchased directly from farmers at Rs60 and sold at Rs65 to the customers. There were problems in disposal and Lak Sathosa had to throw away a lot as it was cheaper in the open market!

I must say when I looked at the quality of those onions in those stores, there was a lot to be desired, as their quality was bad, and only about 75% of what one bought could be used. So no wonder trying to manipulate the free market ended up costing this State owned enterprise a lot.

Now that the price reached Rs90/kg, supply being short, and a Rs50/kg import tax which also corresponded to the retail price of imports also being at that level, the consumer was left paying a much higher price. So now the consumer rights overtook the farmers.

The Govt. suddenly and without warning, reduced the duty back to Rs15/kg. It was the same for potatoes, and the duty on Red Onions was also reduced by less, as this harvest also has now ceased.

It does not take a rocket scientist to realize that the importers knew that the tax would be reduced as there was no way the local market could supply the needful, so they desisted from imports to only the minimal amounts ahead of the duty reduction. As usual again, the onion farmers who were sophisticated enough to be able to store the onions to get a higher price, were only releasing stock that was likely to go bad, and held onto the balance to sell at the top.

With the duty reduced, the market price must fall by at least the reduction in the duty, and the farmers who held on hoping this price level would continue have begun to dump their onions in the market before the imports arrive. Now they cannot even sell their lovingly and carefully stored onions for Rs30/kg as traders are now taking advantage of their distress and making a bigger margin as middlemen!

The farmers are now agitating, saying if they were given three weeks notice, they would have released their stocks to the market in anticipation of the import duty reduction. In this example one can clearly see the lack of a coherent policy ALWAYS affects the farmer, however clever or versatile he may be in the knowledge of storage methods, to keep his onions for a longer period.

The farmer is not powerful as a group to affect the price, leaving it to the Trader to do the needful.

Sri Lanka will not produce enough onions for local consumption, and cannot produce it all year long, so we MUST import it. The govt is encouraging more onion cultivation which will ADD to the seasonal woes not reduce it unless long term storage facilities can be set up at local level, but has to be done by individuals and not collectively as it is difficult to manage in a cooperative way. 

The Govt takes in a lot of tax from imports during the year to fund its other activities. Nothing will prevent the temporary price dive in August and September when the harvest comes in, as there is no way to store the excess by anyone other than the farmer who grows it who knows the quality of his own stock, store-able or not!

It is time we treated WATER with more respect – not by charging though!

People in countries and states where water is scarce, know and practice the art of conserving and careful use of this scarce commodity. People are very used to going to great lengths to use as little as possible for their daily needs. Almost all homes in those countries have water meters and people are charged under different bases for water consumption. Few wash their cars at home, and go to car washes where water is used sparingly and reused as grey water. Grey water is used for gardens.

Colombo folk, now pay increasing charges for water and are more conscious of the cost; rarely do we see a maid watering the garden with a hose, and instead see them use watering cans to water specific areas of plants and flower beds, when there has been no rain for over 10 ten days. These days the rains are heavy and thoughts of water conservation are few, however it is now time to think of conserving a larger percentage of this rainwater, that now just flows down to the sea, without prior use.

All new rural water schemes come with a water-meter, and homesteads are charged for the water they use. It comes from a central source via the pipelines that are now increasingly being laid along the roads with outlets to each building plot. When the bills come people begin to realize the need to conserve and hence are careful in their use. Many homes that have this so called mains supply also have wells and therefore use the well water when needed or as necessary.

It is now dawning on people that the well water is not an unstoppable source of free water, and that the water table is affected by over use of well water, and sometimes can lead to permanent loss, where the ground water level does not refill.

I have to pay a standard fee per season for the use of water to my fields. It is a nominal charge, which does not take into account the true cost of supplying water via the system of channels and canals from the Minneriya Tank. I have stated before that I have perennial problems of non receipt of water, as I am the last in the channel and my neighbors who are further up take the water (more than their allocation) with none left for me, resulting in my having to pump water from the river to make up the shortfall. This incurs the ire of the authorities for so doing, as it is supposed to be water that is due further downstream harvested by a system of anicuts to paddy fields. Whilst excess water seeps into the river from field ahead of me, I am supposedly prevented from pumping that back for my fields!!!

 

The attempt recently to make an annual charge for the use of a well in one’s own property was greeted with horror. However whilst I agree at present it is best not to do so, it is still worthy of a reminder that the precious water MUST be conserved.

Only 65 Tonnes of paddy have been purchased from Polonnaruwa District!!

In today’s (3^rd October 2012) Daily News it was reported that subsequent to the Yala Season harvest only 65 Tonnes of paddy have been purchased by the PMB from the Polonnaruwa District. There is no reason given as to why this amount is so low. Is it because the farmers just had no surplus paddy to sell the state? No explanations are given except for the facts.

Subsequent to last season’s bumper harvest, there was a lot of paddy in storage, as a result of the state purchasing and filling the various storage warehouses. Some of this paddy has been sold at a price lower than the state purchase price to local millers, whilst the bulk of it still remains in storage.

The state is manipulating the price. That is by not releasing the stock in the silos, and the small crop this season, a shortage of paddy has resulted. This has raised the farm gate price, a boon to the farmer, though his crop is a fraction of the previous season and is small comfort. This is the simple reason why the state has not been able to purchase the paddy. It is not worth their while for the farmers to take the paddy to the state buyers, when they can get a higher price at the fields from traders. For those in the know, a three bushel paddy bag of nadu rice sells for Rs2200 and for the samba white it is Rs2400 the latter at Rs 38/kg when the govt. purchase price is Rs30/kg. I am told the price is on the way up.

It is important now that the state does not play games with manipulating stock of rice in stores to raise the price, so as to release an excess only to fall again. In the same vein the state can create an artificial shortage by not releasing rice from their stores increasing the market price. This will help the large millers more than anyone else to increase their price, and dupe ruined marginal farmers who have decided to abandon paddy cultivation, to get back into the Maha season!

What this does is enrich the millers and make an already poor paddy farmer even poorer, cheated by a false sense of security. Please do not forget that traders make profits on the changing price of paddy. The farmers dispose of it at whatever price they can get, as they have to turn their harvest into cash. They cannot afford the luxury of storing it until the prices rise, unlike the rich traders and millers. The state is playing the enabler yet again, on behalf of these unscrupulous traders who profit from this turn of events. The customer now has to pay a higher price for rice, even though there are thousands of tons of rice rotting in the government stores, not being sold(why?). This sort of behavior by the Govt. is unpardonable, as I can see the farmers’ desire to farm, daily diminishes by such State in/action.

The reintroduction of the Crate rule – is only one reason

It was barely two months ago when the farmers were screaming blue murder that they had surplus vegetables that they could not sell. Tomato was rotting on the trees too costly to pluck. Now tomato is Rs300/kg at retail! So what gives?

Tomato was always transported in boxes to prevent being squashed so the crate law does not impact them differently. It is purely a question of good weather which brought a bumper crop, and farmers stopped growing tomato as it was not worth their while and hey presto there is a shortage, coupled with the drought that has intensified the problem. It helps to be contrary, as those people who were able using greenhouses to grow tomato expecting the shortage and price rises are making hay. However one can probably count the number of people in this fortunate state on the fingers on one hand, there are so few who took advantage.

That particular circumstance aside, there is a huge debate going on as to why there is such a massive fluctuation in vegetable prices, which are not always exactly predictable, year on year. The crate issue is not the main reason. After all only a total of 25 fruit and vegetables require to be transported by crates. That is peanuts in comparison to over 100 varieties.

Many of the price increases are on vegetables that do not even require crates, though obviously there is an added cost involved in crate transport, not covered by lower post harvest losses. Ironically due to the political sensitivity of the farm lobby, the crate law does not apply farmers. That at a stroke reduces the benefit of the crate law in the first place as there is a substantial loss in transport from the farm gate to the main wholesalers at Economic Zones where they are first transported to.

In today’s context the drought is bigger factor, as it is across the country and not restricted to an area. The only people likely to benefit from this are people who were able to grow vegetables in their home gardens, use available water from home wells to grow their vegetables for home consumption and therefore save on market prices, which mean they will now be able to eat, that which they were priced out of. Good for them!

It is clear that farmers have not been able to weather proof their production, and due to lower yields will not benefit from price increases.

Hemakumara resigns! About time! Have you finally seen the light? What took you so long?

A Presidential Advisor on agriculture and a former MP and minister, who defected to the UPFA from the UNP, and lost his seat at the last elections, Hemakumara Nanayakkara resigned his post today in disgust at the Government Agricultural Policies or lack of them. He is also the younger brother of Vasudeva Nanayakkara, an MP and leftist!

This blog is full of the lack of it! And it does not surprise me that after his visits to the farming communities all over the country, it is apparent what a pigs breakfast this Govt. has made of agriculture. The agriculture ministers are confused as to what their responsibilities are, the bureaucrats in the departments are completely unhinged and the farmers left in the dark, as policies come and go in a field that requires long term planning for effective productivity in the least productive sector in our country.

I am sure that once confronted with the farmers’ woes, of schizophrenic behavior on the part of Govt. policies, he realized that he could only express his honest opinion, by not being a yes man, but by being truthful and objective that there is NO policy that is being implemented to benefit agriculture in Sri Lanka.

This lack of knowledge of the subject and the pursuance of a policy aimed at hoodwinking the farmers for votes to win elections, is grounds to be disgusted, as the Govt. takes advantage of a very delicate community facing incredible odds to make a living. It is time that he gives his frank opinion, rather than pussyfooting around, as to the real reasons he is disgusted with the current state of play.

So how about a summary: The quality of the fertilizer given to the farmers suck. The use of the fertilizer is harmful. The planting material given is not up to an acceptable standard. The weather forecasts were wrong and so the officials gave farmers the wrong information with regard to planting, resulting in a colossal loss of inputs as the plants will now die. The unannounced withdrawal of the subsidy for non paddy crops and the late availability of fertilizer. The difference between the guaranteed price to the farmers and the real price they receive. The lack of a market for the produce, and the bad advice from the department on every aspect of agriculture. To name a few of the topics to be covered.

Sustainable Agriculture – Its everywhere but in practice!

There is so much pontificating words written about sustainable agriculture and I believe very little of that comes directly from someone who earns 100% of his income from existing agriculture, sustainable or not.

Why is that? The person who is a full time farmer cannot see the practical side of the concept as he cannot contemplate doing without many of the inputs he has become accustomed to. He cannot see that he can earn a comfortable income following these principles. After all he wants a life, like all of us. In my experience it is only theoretical farmers who have other income means who practice this in a serious way, and by so doing they grossly under price in terms of the market place. The reason is that if the true economic cost was charged, no one will buy. I can vouch for that as I also attempted to do the same and discovered how expensive it really is, especially to do it on a small scale.

While I believe there are merits in sustainable agriculture, there is no concerted effort to bring the two opposing factions together or to bridge the gap. The poles are so extreme that people in either camp despise those of the other. Into this argument are those who espouse green agriculture and those who term that green is greed in a veiled guise. After all the Green Revolution whilst increasing yield had as a direct result the abandonment of thousand years of practices and techniques purely in the interests of extra yield in order to save the world from starving.

So what is the bottom line? We must attempt to explain it coming from the results of existing practices (post green revolution) that are promoted or are in current use.

Well it is that our land is being severely polluted. Sri Lanka uses 10 times as much chemical pesticides and weedicides over recommended usage. I was shocked at a picture I saw in an article by the reputable environmental advocate for agriculture, Dr Ranil Senanayake, which showed a diagram of the seas of the world and the seas around Sri Lanka were the MOST polluted of all the seas. If that is not scary I don’t know what is. I was shocked into being aghast staring at it for a while wondering how we in this country got into that state of self destruction.

Now it is up to the political will of our people. Can we ban their use? Yes but not unless we have an alternative in place which is at least as acceptable. We were a country with supposedly 3000 varieties of rice. We probably grow at most 15 varieties now. We DO NOT use transplant techniques to weed and instead use pesticides and chemicals. The Govt. in their foolish wisdom, came into power by promising the continuation of a fertilizer subsidy, that is both costing the country Rs50B per annum, but which has now resulted in a huge set of medical problems from the seepage of these chemicals into the water table, and could shortly decimate our population if not checked, like malaria never did!!

The environmental lobby advocate small farming, and decry the large farms and their control over land and also labor, by making slaves out of small subsistence farmers, but that argument is very disingenuous as there is no way if the country wants a GNP of $5000 a year, that these small farmers can remotely get to even a fifth of it!!

As long as some NGO pays their airfare to Rio and they can interact and bullshit with fellow environmentalists, the farmer in the 2 acre field is left destitute eitherway and so if we advocate NO use of chemicals, who is there to guide him in the practice? He needs his hand held for a while before he can embrace the alternatives. Along with the change of direction, go obligations, expectations, and behavior modification, which we expect the poorest sections of our society to engage in when the wealthy smugly do not even budge from their inertia, but pontificate.

Unless the whole process engages a holistic change in the food chain from education of eating habits, to the need for paying more for food items with worms as being healthy for you, to methods of storage and transport that ensure that most of the benefit accrues to the farmer and not the intermediary, it will not succeed. A rational and commonsense way of eliminating the middlemen in the food chain along with the mafia who control and therefore hype the price to the consumer, whilst at the same time pressing down the price to the farmer is the only answer.

I do believe that even if we have half the yield, we can still feed the population, by changing eating habits to healthy from volume, and from mostly closely grown than from transported from afar, to reduce the carbon footprint. We must simultaneously address wastage, reduce length and cost of transport, and ensure above all, education of the consumer.

The Drought - Tobacco Company – in the farmer’s pocket – or the other way round

There is a huge ongoing issue in the Bakamuna Elahera, Yoda Ela stretch, Mahaweli H zone I believe it is called. No water has been supplied to the farmers after a promise that water would be released on May 1^st. Water was released for a few days, which confused the farmers into getting ready for planting and then it was stopped. No water has been sent subsequently.

Firstly the farmers who jumped into preparing their lands were left high and dry licking their losses. Then the Tobacco Company reps jumped in and offered an alternative of growing tobacco where they will supply all the inputs without having to lay down any money and will only deduct the costs once the harvest is in from the final proceeds, which suited many farmers. Many of the people with connections to the local politicians, who promised them the minimum water, got into that line and are continuing this cultivation to the disgust of the farmers who did not, and the anti tobacco NGOs who are complaining that there is a mafia controlling the limited water supply to supply the tobacco plantations.

THERE IS NO DRINKING WATER let alone water for cultivation. The Problem is acute, within a month the people will explode into violence against the inability of the government to act and their continuing to help their own friends and connections in the Tobacco Cultivations.

WE MUST DO SOMETHING TO HELP THEM. They have NOWHERE TO TURN. GO SEE FOR YOURSELF THIS IS NO JOKE.

No one to hear their plight. They believe the politicians are far removed from their daily problems and as the politicos cannot solve their immediate problems prefer to stay away in 5 star AC comfort in Colombo. Even the President who turned up at Elahera about a month ago, hooked it back to his Helicopter and flew away into the sunset, and did not wait to make the speech he was supposed to, as he would have been lynched by the people for saying things that do not mean anything to them.

The problems have got so acute as even drinking water is at a premium with wells running dry as the traditional Yoda Ela Canal is not supplying even a trickle of water for bathing as there is no water in the Mahaweli system to supply the diversion through Polgolla that comes into this area.

The Govt. DOES NOT give subsidized fertilizer for tobacco so the tobacco farmers are completely on their own, with advice from their reps to manage their plantations, and the necessary help within their own organizations. The farmers not in this cultivation allege that the District Secretariat staff assist them in breaking rules to provide them with water. It is possible that violence may be directed at these people before long.

Don’t say I did not forewarn of the impending catastrophe. When you are thirsty and see no way of buying water, when you have no way of paying for medicines or for food as these people have used all their savings already, you do not understand the seriousness of the situation.

Any politician who goes there without a solution at hand with them, will be lynched so no one dare go there. You cannot promise anything anymore as people will not believe any promise as they know they are mere words.

Added to this the sudden withdrawal of the fertilizer subsidy for other crops has spooked farmers who did not know in advance that this subsidy had been withdrawn. So for their corn, green gram, soya cultivations, they will have to purchase their own or manufacture their own fertilizer at market prices. Today that is a moot point for the Mahaweli H zone farmers as they are facing a bleak future at least until the October rains.

Why do we wait for the problem to get worse before we take steps to try and help? The Minister of Disaster Management, don’t say you have not been informed.  If we assist in helping them with something like emergency tube wells we may at least alleviate the drinking water problem. I was suggesting a bowser of water but then when one village is helped, the other village will say they did not get water and get angry with the giver. This will be considered just a band aid to prevent the deep cut that needs stitches.

Tobacco cultivators be warned, along with Pradeshiya Sabha members of the area, your plantations face the first of the blows. More importantly anyone who is willing to help DO NOT go to the Government departments who will take all you have to give and more without any of the needy people getting anything. Go direct, give each a bottle, tag their fingers so they cannot come for seconds and give as much as you can.