Hon. (Prof.) L.M. Abeywickrama

Hon. Speaker, there is public debate about imposing a Special Commodity Levy (SCL) of Rs. 50 per kilogram on big onions and Rs. 80 per kilogram on potatoes. If we look at production of potatoes and big onions, there is a significant gap between the cost of production for farmers in India, Pakistan and China and that of our farmers. In Sri Lanka’s Welimada and upland areas, the cost of producing a kilogram of potatoes is about Rs. 200, whereas in India it is about Rs. 40-80. Likewise, our cost of producing a kilogram of big onions is around Rs. 125, while in India it is around Rs. 25. There are many reasons for this gap—climate, for instance. In India, Pakistan and China, these crops are grown in regions with lower humidity. In Sri Lanka, higher susceptibility to fungal diseases forces our farmers to use larger quantities of agrochemicals. Soil type also matters. In Indian states like Haryana and Punjab, sandy loam soils are ideal for these crops. That soil advantage exists for farmers in India and Pakistan. Another factor: our producers spend large sums on seed. Around 50 per cent of potato production cost goes to seed potatoes, which are imported from the Netherlands and Australia. Past governments deliberately dismantled our domestic seed industry, forcing our farmers to import seed potatoes and onion seed at high cost. In India and Pakistan, inputs including power receive large subsidies. As a result, our farmers bear higher costs. Yet many of our people depend on cultivating big onions and potatoes. Therefore, we must protect them. Otherwise, with such high costs, we will face a problem: a large share of our budget will be spent importing potatoes and onions, leaving us dependent on foreign markets, which will harm our economy. That is why we propose to continue the SCL of Rs. 50 on big onions and Rs. 80 on potatoes to protect domestic farmers. We do not intend to do this indefinitely. We know that by 2030 these para-tariffs will have to be phased out. But, until then, we must protect our farmers. In Punjab in India and in China, production is on a large scale with lower unit costs. Our farmers are mostly smallholders. We must equip them with technology to cut costs and modernize agriculture. This year the Department of Agriculture has allocated significant funds to upgrade agricultural technology. We are also investing in market infrastructure—cold rooms and storage—to lower farmers’ costs. Within the next two to three years—before 2030—we believe our farmers will be able to compete head-to-head with those in Punjab and Haryana, China and Pakistan by reducing their unit costs. Costs rose because past administrations neglected agriculture and technology, abandoning farmers. We aim to make our farmers competitive soon by reducing their costs through technology and organization. If we withdraw these levies now and let prices float freely, foreign markets will invade ours and our farmers will suffer. Our policy is to develop agriculture. Maintaining these levies now protects farmers. For consumers, although it may look unfair at first glance, there is fairness too. In recent years, prices of these products fluctuated wildly—potatoes went up to Rs. 600-700 a kilogram at times; then fell; onions faced the same. Since taking office, we have managed to keep prices relatively stable—potatoes roughly between Rs. 200-300 a kilogram and onions between Rs. 100-200—so producers are encouraged and consumers can plan household budgets. Even with an SCL of Rs. 50 on onions and Rs. 80 on potatoes, imports from India, Pakistan and China can still land below our production costs. Though the levy may seem large in macro terms, from an agricultural perspective it is not excessive; it provides only a modest shield. As a government, we will not squander this revenue on travel and luxuries. These funds will be used to develop the sector—technology, cold storage and warehousing—to strengthen farmers. Our immediate goals include improving technology, developing domestic seed production and reducing seed costs. We have already started first-generation potato seed production in Welimada and Bandarawela, and onion seed in Dambulla, which will lower costs for farmers. We are also organizing smallholders into groups and cooperatives to expand cultivated area and enable the use of modern technology. Many farmers operate on very small plots, where technology is hard to apply. By clustering them, we can introduce modern methods and reduce unit costs. We have established technical farms and allocated significant budgetary resources to provide equipment. If we tear down this bridge—the levy—now, farmers will drown. Before jumping out of the plane, fit the parachute. Do not discard it yet. As someone engaged in the agricultural sector, I propose that until we fully equip our farmers and before the para-tariffs are phased out by 2030, we maintain these levies for at least another two years. We ask the Opposition not to obstruct measures that protect farmers for short-term political goals, but to support them, looking at long-term outcomes. Thank you, Hon. Deputy Speaker.