COLOMBO (EconomyNext) â€“ Sri Lanka has raised import taxes on by 20 and 25 rupees to push prices up and give bigger profits to farmers and landowners, expanding protection to keep prices high to consumers.
The tax comes weeks after the Trade Ministry slapped price controls on hoppers, forcing producers to make them smaller or stop selling the popular food altogether, showing the contradictions in state intervention.
Sri Lanka started to produce large onions and potatoes from the mid -980s with state support, but due to sustained import protection the farmers have not tried to produce an exportable product unlike their counterparts in India and Pakistan.
Potatoes are also grown in rented lands, giving archetypical ‘rents’ to landowners, who have become a powerful lobby group.
Farmers are favoured by the rulers of Sri Lanka with protection, leading to high prices, low productivity and low quality, in country where children suffer malnutrition, showing effects of promoting German style autarky.