Govt. makes U-turn on hoarders’ Mafia

Question mark over Office of CGES, emergency regulations

By Shamindra Ferdinando- 2021/09/30

Following the abolition of price control on rice and paddy, the government is expected to review its controversial decision to establish the Office of Commissioner General of Essential Services (CGES) to ensure an uninterrupted supply of paddy, rice, sugar and other essential goods.

Authoritative sources said that a decision taken by Cabinet of ministers on Monday (27) to rescind the relevant gazette underlined the urgent need to examine the government’s overall response to shortage of essential items.

Responding to The Island queries, sources explained that the government backed the appointment of a serving officer, Maj. Gen. M.D.S.P. Niwunhella as the CGES with the declaration of emergency regulations. President Gotabaya Rajapaksa made the declaration effective Aug, 31, 2021 in terms of the Section 2 of the Public Security Ordinance as per the Section 5 that dealt with essential food supply. Maj. Gen. Niwunhella of the Gajaba Regiment is the incumbent head of President Gotabaya Rajapaksa’s security contingent.

Sources emphasised that the abolition of price controls on wholesale and retail sale of rice as well as purchase of paddy should be examined against the backdrop of declaration of emergency regulations and specific measures such as the appointment of CGES to tackle hoarding, price manipulation and a range of other irregularities.

In the absence of President Gotabaya Rajapaksa, who is away in the US, Prime Minister Mahinda Rajapaksa has chaired Monday’s meeting. The Island learns that proper consultations hadn’t taken place before the government made a U turn on traders Mafia.

Sources said that President Gotabaya Rajapaksa moved to reign in the group of powerful millers in the wake of the collapse of agreement between the government and the businessmen. Trade Minister Bandula Gunawardane and Agriculture Minister Mahindananda Aluthgamage on July 21, 2021 reached agreement with millers for the latter to buy paddy at what they called government guaranteed price.

In spite of Ministers Gunawardane and Aluthgamage vowing to ensure uninterrupted supply of rice, the millers reneged on their promise. Sources pointed out that the decision to rescind the relevant gazette on price controls, the announcement of the release of funds from the Central Bank to release food containers held up at the Colombo port, immediately import 100,000 tonnes of rice to maintain a buffer stock, delay decision on the revision of milk food, flour and cement, and millers declaring a new price structure (retail and wholesale as well as paddy purchasing price from farmers) happened within 48 hours.

The Central Bank on yesterday (29) announced the release of USD 50 mn to two state banks to make it possible for importers to clear their goods from the Colombo harbour.

On the instructions of the President, the CGES Maj. Gen. Niwunhella and Chairman of Consumer Affairs Authority (CAA) retired Maj. Gen. Shantha Dissanayake, led raids on Nipuna, Lathpadura, Araliya, Hiru, New Rathna and Sooriya in the Polonnaruwa District.

Former President Maithripala Sirisena’s brother Dudley Sirisena and State Minister Siripala Gamlath are among those accused of hoarding rice.

Sources said that just a day after the cancellation of the relevant gazette, a group of millers led by Dudley Sirisena declared retail price for nadu Rs 115, samba Rs 140 and keeri samba Rs 165,000. The group also declared that paddy would be bought at nadu Rs 62.50 a kilo, samba Rs 70 and keeri samba Rs 80.

The declaration of emergency regulations in the run-up to the 48th session of the Geneva-based Human Rights Council caused quite a controversy. The entire Opposition in the parliament, two major civil society groups –Sri Lanka Collective for Consensus (SLCC) and Civil Society Platform (CSP) and a section of the international community and the Human Rights Commissioner Michelle Bachelet condemned the declaration of emergency though the government repeatedly stressed that particular measure was taken for the benefit of the fleeced consumer.

Sources said that with the abolition of the gazette meant to regulate the rice market, the whole strategy initiated by the government in late August was in tatters.

Other sources said the government had conveniently side-stepped the simmering issue pertaining to the issuance of a gazette on Oct 13, 2020 to reduce the import duty on a kilo of rice to 25 cents from Rs 50. In spite of the Committee on Public Finance chaired by SLPP lawmaker Anura Priyadarshana Yapa declaring that the duty reduction didn’t bring any relief at all to the consumer, the reduced duty remained, sources said.

Having accused major sugar importers of hoarding, the Presidential Secretariat in a statement issued on Sept 1 identified the hoarders as Pyramid Wilmar(6,200 mt),Global trading company (4,900 mt),Wilson Trading Company (14 mt) and R.G. Stores (800 mt). The announcement was made after the government seized 29,000 mt from five warehouses.