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Govt. has failed to address plight of milk farmers

16 June 2014 08:41 pm - 0     - {{hitsCtrl.values.hits}}

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Sri Lanka is a country which has an abundance of cattle for milk. Unfortunately none of the governments managed to make the maximum use of it. The farmers were in a continuous struggle to get a reasonable price for their milk but they never got it.

At a moment when milk prices were down in the world market, the Ministry of Finance and Planning increased the import duty on milk powder by Rs. 25 per kilogramme with effect from June 02. From the Ministry’s point of view it is to encourage the milk industry in the country. But the problem is, the increase of import prices will be effective and will contribute to uplift the milk farmers. Even up to recently there were milk farmers protesting on roads and destroying loads of milk, as they were unable to get a proper price.






"Powder milk is inferior to liquid milk. Our aim should be to increase the liquid production, to make the country self - sufficient in liquid milk"





Price reduction must pass on to consumers - Dr. Damayanthi Perera




Doctor Damayanthi Perera, one of Sri Lanka’s highest qualified nutritionists, also affirmed the benefit of the global milk powder price reduction should be passed on to the consumers in the country. She said therefore the authorities concerned including the CAA should ensure that the reduced prices should be passed on to the consumers. “The benefit of the reduction in the price of global milk powder should be passed on to the consumers. Otherwise factions in the middle will keep enjoying the advantage of the global price reduction,” she said. She claimed that the Sri Lankan customers were not enjoying the global price reductions unlike the consumers in the United Kingdom or in the United States. “ As an example when there is a price reduction in fuel-petrol, the benefit of the reduction is passed to the consumers in the other countries like  UK and USA,” she said. However she said in the long run our objective should be to promote liquid milk and to make Sri Lanka self-sufficient in liquid milk.
“Powder milk is inferior to liquid milk. As a country our aim should be to increase the liquid production, to make the country self-sufficient in liquid milk,” she said.

Global price structure does not affect us - Nestle Lanka




Meanwhile Nestle Lanka Private Limited said that the recent fall of milk powder prices in the global market was not making an impact to the prices of its milk powder products since the company had not imported any full cream milk powder to use in their milk powder products. “We have not imported any full cream milk powder last year.  Therefore the global pricing structure doesn’t apply for our products,” Assistant Vice President Bandula Godage said. He said the local prices of milk powder were determined by the Consumer Affairs Authority (CAA) and not by companies. “It is up to the CAA to make the decision on the prices. However, we haven’t asked for an increase from the Authority,” he said.

 A fair hearing “Audi Alteram Partem” - Rumy Marzook



contacted Chairman of  the Consumer Affairs Authority (CAA), Rumy Marzook in this regard.
The CAA Chairman said: “I am unable to comment on this matter at the moment. The CAA has requested some information from Milk powder companies and I will get them on June 15. Once we get those statistics only, we can come to a decision with regard to prices”.
He said just because the prices in the world market decreased it is impossible to change the prices here immediately.
“We must think of both sides, the consumer and the companies.  There should be a fair hearing- Audi Alteram Partem - for both sides.  The milk companies export milk not only for a month. They buy stocks for a few months. At the moment the stocks are there till the end of July. If any changes come that will be only after July,” he said.
He pointed out if the Authority takes a capricious decision it can affect the consumer. and the Authority has always been with the consumer.
“If we take a sudden decision it can be detrimental to the consumer. We always think of the consumer and the Authority works with the limited resources that are available,” Marzook said.
 

Theory of price increase - Samanmalee Gunasinghe




Samanmalee Gunasinghe, President of Women for Rights Movement, an organisation affiliated to the Janatha Vimukthi Peramuna (JVP) says if the Government increased the price of milk powder in February stating that prices in the world market had increased, then the same theory should be applied now.

“In February the price of a 1Kg packet of milk powder was increased as the prices in the world market increased. During the same month  1 metric tonne of milk powder cost 5200 dollars. By May, the price was reduced to 3200 dollars per metric tonne. If the same theory applies then the consumers should get a concession,” she said.

Samanmalee said although the Government had said that the tax is to encourage consumers to buy the local product and to encourage the local milk farmers. She pointed out that ninety per cent of the consumers use powdered milk and only ten per cent use the milk that is produced by local farmers.

“It is not logical at all if the Government decides to impose the fact for the betterment of the ten per cent of milk farmers. The present Government has been in power for a considerable time but they have failed to address issues of the milk farmers. The farmers at one point had to destroy their stocks of milk as they did not get a good price for milk. Clearly this shows the Government does not have a policy with regard to milk farmers,” she said.
She said: “This Government is running at a loss. They are trying to transfer the tax money to the Government Treasury which can be utilised to cover the loss. We demand if the sole purpose behind the tax imposed on milk powder is for the benefit of the milk farmer, give that money to them. Even we like to buy milk from our farmers and it in fact is better than drinking milk powder. But our point is when are the farmers getting the benefit?”.
Samanmalee said Sri Lanka has forty per cent of people who live on less than 250 rupees per day. In a country like that increasing the prices of essential items like milk powder will burden the consumer even more.
 

Our products are local - Milco Lanka Pvt Ltd




The Chairman of Milco Lanka Private Limited, Sunil Wickramasinghe said the fact that prices in the world market reduced does not exactly affect them. “The tax increase affect the companies which import milk powder. Our products are all local. We buy milk from farmers in Sri Lanka.  We already provide milk powder at a concession,” he said. Wickramasinghe said that for the moment they do not intend to reduce the prices.
 

CCA are dumb, deaf and blind - Harsha De Silva

 



United National Party parliamentarian Harsha De Silva charged the Consumer Affairs Authority (CAA) was  dumb, blind and deaf when it comes to the consumers and said benefit of the global milk powder reduction must be passed on to the consumers. “It is for a reason that it’s being called the ‘Consumer’ Affairs Authority. It shouldn’t act for the interest of the importers. The Authority should look after the consumers. If there is a global price reduction it should be passed on to the consumers. Its simple as that,” he said.

He said the milk powder import companies won’t go for a reduction although there was a reduction in global prices.

“Therefore its up to the CAA to monitor global prices and measure the reduction or the CAA could give a condition when it allows companies to increase their prices. The CAA can say that it is allowing an increase because there is a global price hike and if the prices come down, there should be a reduction automatically,” he said. He said the CAA on one hand was supposed to reflect the wholesale market prices of milk powder in the overseas market, whether it was New Zealand or Australia, to monitor prices in the country. He said the Ministry of Finance and Planning could also take steps to lower the milk powder prices. “The Ministry could adjust the duty structure when importing milk powder. It could reduce the tax on milk powder and in that way also milk powder prices could come down,” he said.




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