Parliament was given what was described as a bit of good news the other day. Ranjith Siyambalapitiya proudly announced that he had successfully weaned most people in the country off wheat flour in the last twelve months, with sales plummeting by some 90% in villages, and consumption in Colombo also dropping by around 60%.  Wheat imports fell by about half between 2006 and 2007.  Sri Lanka was saving millions in foreign currency and the economy was clearly the better for it, the Deputy Minister of Finance and Planning told MPs.

It is hardly a great achievement.  The Government has been making worthy efforts to popularise rice-based products, but these are obviously not behind the massive shift away from wheat flour.  People have stopped eating it because of the rapidly increasing prices.

The UNP and the JVP are keen on using this issue to attack the Government. Wheat prices have doubled within a year, with the international market being affected by poor weather and increasing demand for animal feed and bio-fuels, and the current situation is clearly different from anything faced by previous administrations.  One need only scan the newspapers of other countries to see that exactly the same stories are being reported elsewhere.  Mexicans have been rioting over the cost of tortillas and Italians have resorted to boycotting pasta, while bread prices have been shooting up at several times the overall rate of inflation in the UK.

However, this is all conveniently forgotten in the cut and thrust of political life.  The Government constantly has to face the accusation that the cost of wheat flour in this country could somehow be contained with better policies or more careful planning.

Ranjith Siyambalapitiya used to shout about Prima.  He liked to threaten the company with legal action, saying that it had no authority to increase the price of wheat flour without approval from the Government.  The Consumer Affairs Act, he later discovered, gave Prima the power to do exactly that, and the argument reverted to the old blame game between the Government and the Opposition.  The UNP attacked Rauff Hakeem, the minister at the time the legislation was drawn up in 2001.  Meanwhile, Ravi Karunanayake was held responsible by the Government, having been in charge when the amended version was passed in Parliament in 2003.  They set up a Parliamentary Select Committee to go into the details, and that seems to have been the last of it, because there is still no new Consumer Affairs Act.

It scarcely matters.  Price increases would end up being granted even if permission were needed, as we regularly see happening with milk powder. Fonterra, Nestlé and the rest simply withhold their products from the market and create shortages if their demands are not met, or they attempt to mislead people by releasing smaller packets for the same price.  Prima would easily get the better of the Consumer Affairs Authority.

Subsidies are actually the only way out of the spiral of increasing prices for wheat flour, but these are clearly off the agenda.  The UNP and the JVP probably agree with the Government when it says that people would be better off eating rice.

Prima, of course, calmly continues its work.  Decreasing demand for wheat flour in this country doesn’t appear to have had much of an impact on its operations to date.  In fact, Prima started exporting wheat flour a couple of years ago, and it claimed to be earning as much as 50% of rubber exports or 5% of tea exports by 2006.  In 2007, it was expecting to increase this amount still further.  Profits seem to keep rolling in, and one suspects that this would now be celebrated as an excellent example of foreign investment by the Deputy Minister of Finance and Planning.

Anyhow, here is the real problem.  People have given up eating wheat flour on account of the rising cost, yet rice has also gone up in price. Increases of between one half and two thirds have been seen in the last year, so people who have to buy rice in the market are cutting back on that too.  It begs the question as to what they are eating if not wheat flour or rice.

Ranjith Siyambalapitiya didn’t seem to have anything to say about rice.  In fact, paddy production also dropped last year, added to which the country is now exporting rice to the West.  The Deputy Minister of Finance and Planning might well be pleased about that too, because it helps with the balance of trade, not to mention being a sign of the growing private sector led by local companies like CIC.  Sri Lankans are often told to be happy that their rice is now conquering the lucrative markets of the United States and Europe.

Unfortunately, the Government occasionally has to import consignments of other people’s rice to prevent shortages, or in half-hearted attempts at keeping the price down.  Still, that could also be presented as being helpful in increasing the volume of trade with India and Pakistan.

The Government wants to increase paddy production, and that is certainly the best way forward, but statistics show that it is not doing enough.  The UNP and the JVP would gladly take advantage of this situation to have another go at the current administration, yet it plainly doesn’t help in solving the problem.  Maithripala Sirisena’s brother and Siripala Gamalath can’t honestly be accused of depressing paddy production, although they may well be hoarding rice at their mills in the hope of selling it at a higher price later, as has been alleged in the most recent exchange between the Government and the Opposition.

Whatever, people are completely left out of parliamentary debate.  Scoring points is the most important task, and it doesn’t seem to matter whether these are based on fact or pure fiction.  The talk is all about saving foreign currency, cutting back on imports, encouraging foreign investment, promoting the private sector and increasing exports, or else about putting an end to corruption and political interference in state institutions. These things are all very well, but they say little about the well-being of the people of this country.  The Deputy Minister of Finance and Planning is probably no more at fault than most of his colleagues, but it surely wouldn’t hurt to set an example for other MPs.

The Government appears to be eager to encourage a rather different approach on the issue of electricity prices.  CEB recently released details of a proposed increase in tariffs, saying that it was needed to avoid an anticipated loss of some Rs. 42 billion, which would amount to an increase in the budget deficit from 6% to 7% of GDP.  Oil prices are still going up, and there are to be no further subsidies from the Government.  CEB has few real options while it is tied to thermal power producers, and it has called for a public discussion.

Comments, of course, do not come from just anybody.  People are generally too busy with their daily lives to write in to say what everybody knows anyway: they can’t afford to pay more for their electricity.  Companies, on the other hand, have plenty of capacity for commenting, and they have done so with a great deal of energy.

Exporters got the ball rolling.  They claimed that the tariff increase was unfair on them because their products had to compete in international markets, so they wouldn’t be able to pass on the additional cost to customers for fear of losing out in sales.  Porcelain, tile, electronics, rubber, tea and garment industries were all said to be on the brink of collapse.  Foreign currency would be lost, factories would relocate elsewhere, and jobs would go, while some representatives even said that it might be the end of foreign investment in this country.

Meanwhile, other companies weighed in with the thought that their products had to compete with imports from other countries.  It was more of the same.

The UNP professed to be worried about the wage burden of political appointees, although it was careful to add that it wasn’t against job creation in itself.  Entertainingly, it also announced that the tariff increase was just another means of suppressing the media.  They might put up a poster.  And the JVP is apparently wondering whether to take to the streets.