Sajith Premadasa - Leader of the Opposition

¶ 01 Madam Deputy Chairperson, in approaching these levy increases purportedly to protect local farmers, we must ensure the objective—strengthening livelihoods of present and future generations of farmers through competitive pricing—is actually met.

¶ 02 About 20,000 potato farmers and 7,000 big onion farmers are engaged mainly in Nuwara Eliya, Kandapola, Welimada, Uva Paranagama, Haputale, Bandarawela, Hali-Ela (potatoes), and Anuradhapura, Matale, and Polonnaruwa (big onions). The SCL is being raised from Rs. 60 to Rs. 80 per kg on potatoes and from Rs. 10 to Rs. 50 per kg on big onions.

¶ 03 For potatoes, farm-gate wholesale varies roughly Rs. 160–220, but farmers are paid around Rs. 160 while production cost is about Rs. 210 per kg—leaving a deficit. Imported potatoes wholesale around Rs. 160–170. With costs elevated, many cannot even harvest. Will these levy changes correct production cost-recovery?

¶ 04 For big onions, farm-gate wholesale is about Rs. 125–135 per kg, while production cost is around Rs. 250. Imported big onions price around Rs. 145 depresses local sales, severely harming farmers—leading many to exit both crops. Nationally, we produce only about two months’ requirement of big onions and two-and-a-half months’ of potatoes; the rest is imported (big onion annual need ~325,000 MT; potato ~225,000 MT).

¶ 05 Policy should protect farmers while ensuring fair consumer prices. However: - Timing: Levies must be imposed at the correct time relative to harvests. Otherwise, importers pre-stock massive volumes, reaping windfalls, while both farmers and consumers lose. - Process: SCLs should be set through the National Tariff Policy Committee and Cabinet, not ad hoc administrative directions. A recent attempt reportedly bypassed the Committee; the DG who resisted improper process was removed to a pool, then procedures were regularized. Such process failures must not recur. - Impact assessment: We need rigorous ex-ante impact analysis.

¶ 06 Structural issues: - Seed quality and cost: e.g., local big onion seed costing ~Rs. 40,000 per kg; high input costs. Provide cost-reduction programmes—fairly priced agri-chemicals and fungicides. - Crop cycle management: Coordinate Agriculture and Trade Ministries to schedule levies with planting, input, production, and marketing phases.

¶ 07 Global lessons: - For potatoes: adopt apical rooted cuttings, disease-free seed production, boom sprayers for uniform application, semi-automatic planters to save labour and optimize spacing, precision fertilization using GPS, and soil/rotation management. - For big onions: use climate-smart varieties; plastic mulching to control weeds, conserve moisture, and improve seed/ bulb quality.

¶ 08 If Government facilitates technology transfer and training for potato and big onion farmer groups, we can protect farmers and ensure fair consumer prices. Under the current formula, the chief beneficiary risks being the importer—not the farmer or consumer.

¶ 09 Thank you.