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Sri Lanka Government introduces guaranteed price for potatoes

A potato farmer in Meepitima, Nuwara Eliya collecting the potato harvest (Susantha Wijegunasekera; Sunday Observer)
March 31, 2014
With the target of 10 percent growth in the agriculture sector, the Sri Lankan government says it aims at achieving national food security, ensuring a reasonable price for agricultural products and creating an uninterrupted access to competitive markets both in Sri Lanka and abroad for value added agricultural products.

The Ministry of Finance and Planning said in a statement said Thursday that it is required to take further actions expanding the extent under cultivation, using high yielding seeds, utilizing efficient water management system, reducing wastage in transport and producing modern storage facilities to meet the above targets.

The Government development expectation is to transform from a net food importing economy to a net food exporting economy by exceeding self-sufficiency in grains such as green gram, cowpea and soya been in addition to rice, maize, black gram and production of chicken, eggs.

However, the local production of the three main food crops Potato, Big Onion and Dry Chili is not sufficient to meet the total consumption of the country and those have to be imported spending huge amount of foreign exchange.

In 2013, the expenditure incurred in importing those commodities is Rs. 19.104 billion, the Ministry noted.

Considering these facts, Government anticipates reaching 50 percent self-sufficiency in Potato, Big Onion and Dry Chili production by 2015 targeting to transfer from a net food importing economy to a net food exporting economy and expecting to reach the export market by exporting the surplus production by year 2020.

It will be able to triple the income of farmers who cultivate those crops and save foreign exchange of US $ 148 million approximately which is annually spent in importing these three commodities, the Ministry says.

According to the Ministry, to reach above targets, priority should be given to solve the main issues that the farmers discouraged i. e. not receiving a reasonable price for agricultural products, shortage in quality seeds/planting materials and high price of those items.

Accordingly, the government has taken action to set a reasonable price for agricultural production by introducing guaranteed price for the crops of Potato, Big Onion and Dry Chili.

It is established the guaranteed producer price of 1 kg of Potato as Rs. 80, the guaranteed producer price of 1 kg of Big Onion as Rs. 60, and the guaranteed produce price of 1 kg of Dry Chili as Rs. 350 under the scheme.

Further it has been established that the guaranteed produce price of 1 kg of seed potato as Rs. 160 and the guaranteed produce price of 1 kg Big Onion seed as Rs. 12,000 in order to encourage the seed producers.

The official ceremony of signing the "Forward Sales Agreement" between Lak Sathosa and selected potato farmers has been scheduled to be held on 28th March 2014, 10.00 a.m. at "Randora Auditorium" of the Ministry of Finance and Planning. Minister of Economic Development Basil Rajapaksa will be the chief guest at the ceremony.
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