The Hon. Wasantha Samarasinghe - Minister of Trade, Commerce, Food Security and Co-operative Development

¶ 01 Hon. Deputy Chairperson, I thank Hon. Kins Nelson for the motion and Members for their contributions. As you know, our Government is in extensive discussions on rebuilding the co-operative sector.

¶ 02 Key issues raised merit attention. The problem is not merely procurement rules; some co-ops already procure and sell efficiently under sound procedures. The deeper crisis is that many co-ops—created to serve consumers—have been captured by racketeers, thieves, and opportunists, turning co-ops into their private businesses and destroying trust.

¶ 03 Consumer co-ops and multipurpose co-ops now face a severe burden because many have shifted from service delivery to lending. Hon. Wijesiri asked whether they are authorized to collect deposits and lend—many exploit permissions given to multipurpose co-ops to amass deposits, leading to serious problems within the movement. Under the 13th Amendment, co-ops are devolved; the Co-operative Department dates back to 1930. Today, we have 4,996 co-op credit societies; 69 are in deep financial crisis, including in Dehiwala–Mount Lavinia and Maharagama, also in Gampaha as noted, and Ukuwela, with grave frauds. Investigations are ongoing into another 46 co-ops regarding chairman-level fraud and corruption. At the same time, there are well-run societies.

¶ 04 Some even misuse the “co-operative” name for rackets. In our North Central Province, a former Governor set up a co-op credit society with an address of a driver’s garage in Polonnaruwa. Former MP Thisakutti Arachchi also formed the “RCD” co-op “bank” to launder black money. In one Gampaha “bank” alone, fraud exceeds Rs. 780 million; aggregated, assets total about Rs. 4.68 billion while theft exceeds Rs. 5 billion—this is the scale of the crisis.

¶ 05 Yet there are positives: for example, the Medawachchiya co-op sells Rs. 180 million of goods per month (Rs. 130 million retail, Rs. 50 million wholesale) with proper procurement and profits; Akurassa and Walasmulla co-ops also perform well. Thus, beyond procurement, we must root out racketeers and those who treat co-ops as a livelihood to exploit.

¶ 06 There are also cases of co-op assets being grabbed. For instance, the Tambuttegama petrol shed belonged to the Rajanganaya Multipurpose Co-op Society; in 1998, Bertie Premalal Dissanayake seized it. Many such properties and stores must be recovered; some have been occupied for years under pretexts. We are committed to revive the movement and, alongside procurement and recruitment reforms, to stop misuse of the co-op name.

¶ 07 The year 2025 is the International Year of Co-operatives, which we will commemorate in June with international delegates arriving in Sri Lanka. As Government, we are ready to strengthen the movement—consumer co-ops, producer co-ops, village producer groups, and rice-producer co-ops—linking them with Sathosa and reinforcing distribution networks.

¶ 08 We plan to expand up to 10,000 Co-op City-type small outlets, strengthening both the provincial co-op networks and central-level co-op institutions. MARKFED and COOPFED—once intended to import and distribute essentials—must be revived from their current moribund state. We value your interest and invite collaboration. As an NPP Government, we will rebuild a robust co-operative sector to ensure uninterrupted access to goods and services, addressing crises in the rice market and wider essentials by strengthening grassroots distribution. We seek your support and partnership. Thank you.