Price control, regulation of trade, or consumer education for a proper consumer regime?
Cost of Living
Current hot topic nationwide is the cost of living and the price of consumer items and services. Cost of living is not a static scenario due to the changes in trade production and the change of social structure on various factors and angles. Finger of the citizen always points -quite correctly- at the governance empowered to manage affairs of the citizen in the capacity of a Trustee of the Nation for a given number of years. Who is responsible for the prices of consumer items and what are the remedial measures to provide the citizen (the consumer) with products and services of quality at an affordable price? In any society beating the cost of living depends on the conduct and strategies of the consumer and how sharp he is in planning when to buy, where to buy how to buy and what to buy the consumer items in the market challenging the trader and producer assisted and supervised by the state (CAA in SL).
Sri Lanka lacks organized consumer organizations, sharp consumer and just traders for a good consumer/trade regime. Consumerism and trade are interconnected and the reader is invited to go through the materials given below.
CONSUMER (S75 CAA Act 9 of 2003) is any actual or potential user of any goods or services made available for consideration by any trader or manufacturer with the promotion that every citizen is a consumer an important member of the society.
Note that any potential consumer and services come within the ambit of the definition which includes professionals and all kinds of services. The consumer is protected and looked after by the legislation (in Sri Lanka act no 9 of 2003 and many legislations and regulations) to some extent when the consumer worldwide is organized and protected due to power of organization and consumer education.
John Kennady in (1963) who initiated the World Consumer Day and consumer organization in the USA that consumer then is the least protected in the society needing the assistance of the government which is fast changing for good today except in Sri Lanka.
In many parts of the world, the consumer is named an uncrowned king mighty powerful to bring the governments and the trader to knees by the organizational power. In Sri Lanka is the consumer the king?
Or powerful is a moot issue to be discussed. Consumer day is celebrated annually worldwide on various themes on current topics such as on 15th of March every year to promote consumerism and good practices on trade and commerce for the development and prosperity of the respective nations and consumers worldwide. CAA is scheduled to take part in the international event on 15th march 2020 with the international community.
Law and Practice
Consumer regime before the CAA Act was governed by English Law (Act no 1/79 consumer Protection, 1/87 Fair Trading Act, consumer Prices act -chapter 173- which was replaced by CAA act which is a combination of Australian, Canadian, and English Law with complete transformation from price control concept to regulatory powers for the performance of the current consumer regime.
Whether the CAA act is effective or living up to the needs and expectation is a matter left to the citizen to decide. It appears that the consumer is not satisfied and the Consumer Affairs Authority is not providing cover and protection to the consumer, industrialist, and the trader based the regulatory powers with powers to impose decisions towards a proper consumerism structure to the citizen.
The CAA is empowered to impose restrictions, implement regulations and directions, in addition to civil law remedies available in the court structure. CAA act needs complete overhaul and changes on policy and implementation which is in the final stages of fine-tuning at the CAA.
Consumer Protection / Consumer Education
The consumer should be protected while trade is regularized for the development of the economy. Some objects ( S7 ) of the CAA is to protect consumers against the marketing of goods and services hazardous to life and property, protect against unfair practices, ensure adequate access, seek redress from unfair trade practices by Regulation of Trade ( Part 2 of the act) connected regulations and practices. As price control is the history some consumer items which the Minister believes essential to the society could be identified to impose the maximum price (S18) as has been implemented in Rice, Gas and their identified items. It is a requirement to display the price list (S26) in the absence of the price control regime, with implied warranties and maintain the quality and standards with the condition that a receipt to issue (S28) all the consumer items and services provided. Consumer protection is strengthened by the organization as in other parts of the world with international networks such as Consumer International (USA) and famous “WHICH” magazine based in the UK acting as giants on protecting consumer and assist the state in regularizing trade. The CAA in Sri Lanka requires to promote assist and encourage the establishment of consumer organizations and how for this is implemented is in question.
It is the duty of the NGO’s, Schools, and citizens, in general, to set up consumer organizations in all levels, and also the duty of the government to promote consumer education at schools, universities and for the public in general. Rice, gas and regulated items under S18 to be essential to the life of the citizen/Hoarding is an Offence
Determination of rice prices is complicated due to the complexity of the process connected to the paddy farmer, intermediate trader and small and large scale rice millers, State (CAA), and the consumer whose staple diet is mainly rice.
Paddy farmers spend a substantial part of the year with challenges and risks with no proper security for storage, insurance and sale of the products readily purchased /collected by the paddy trader receiving the major part of the profits when the monopoly and decisions of the products are in the hands of the trader, and the state as the regulator with substantial powers to maintain equilibrium in fair trade. Good practices previously with Paddy Board with enormous storage facilities, CWE with a large network of storage, outlets were willfully destroyed by the errant politicians and fat cat selfish traders still haunting to get the maximum from the farmer sandwiched between trader, state, consumer and regulator. Until the CAA act is amended and a proper consumer regime is set up we must find ways and means to give relief to the consumer whilst maintaining equilibrium with the trader and regulator. It is in the news that a few errant traders have stored the major portion of the paddy aiming at large prefects creating artificial shortages and price increases. Hoarding goods by a trader is an offence (S17) and the storage capacity can be determined by the regulator. It is also the mandate and duty of the consumer organizations to come forward to safeguard and protect the citizen backed by the media in maintaining the price-quality and standards.
Collective Efforts are required with a scientific and long term strategy for a proper consumer regime based on consumer education and consumer organization-
Consumer and the farmer are helpless in the hands of the errant trader and the wrong system inherited which needs complete overhaul with a new vision with the involvement and intervention of the Departments of Agriculture, Trade, Regulators, Trader/Chambers/Consumer and Trade Organizations, cooperatives, Banks, with a genuine political vision and a leadership in which the Ministry of Finance, Trade, Consumer affairs to play a main part. News items of some traders taking the consumer to hostage to be punished and dealt with no sympathy. The plan to be drafted at the drawing board level initially by changing the concept and the ineffective and powerless CAA act and consensus to be agreed upon with the regulator trader and the consumer with short/long term genuine affords aiming at making drastic changes at the level of the legislature in formulating and implementing short/long revolutionary plans for a proper consumer regime and successful internal and external trade in line with the policy and the future prosperity of the nation.
Consumer Education to be given priority instead of punishing the trader and leaving the consumer in the dark which is lacking in Sri Lanka and the regulators should be geared for collective actions with the help of local authorities and government departments strategized by the CAA and the Trade Ministry- Lack of involvements by the Chambers of Commerce and trade organizations are noted and everybody should take the issue forward as a national movement for the good of the citizen at large.
On the whole, it is the CAA that is responsible to lead the campaign with the resources and the battery of experts to assist the wish and will of the citizen awaiting a developed prosperous society with a developed consumer and a trade regime. It is time to rethink whether to reintroduce the old system of price control fair trading etc. which is functioning well in the UK with the involvement of DTI-Department trade and Industry with the powerful and organized consumer movement.
(Reference material - All by the author who authored two books on consumerism – Junk Food Daily News- Island / Wise consumer Daily Mirror 19/12 – 2018 / Alert consumer 6/1/2008 Daily news -Protecting Consumer Sunday Observer 15/3/2018 /Target self-sufficiency in milk Daily News -3/Aug/2007 /Rice eating culture 14/Aug/2007-/6/1/2008-CAA ACT/ Rice price and cost of living 20/4/2008 /Simple life 6/July 2008/ 27/May 2007-Regulatory powers-observer gas prices 22/July 2007-14/Sept/2006 towards an International Consumer Charter-rice based products 4/1/2007 Daily News all could be retrieved from the internet and in the book on consumerism authored by me