|Friday, 27 August 2004|
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Coping with the fuel crunch
Two news analyses from two respected British dailies which we frontpaged yesterday should have conveyed to our readers the widespread nature of the current cost-of-living rumblings which have their roots in escalating world oil prices. The Times of London summed - up the magnitude of the cost-of-living shock by saying the "decade of cheap energy prices" in Britain had now drawn to a close.
As should be expected, rising fuel prices in the world market have had a snow-balling impact on the prices of essential requirements, including electricity and gas, and have made living, a difficult proposition for most vulnerable groups, such as low income earners and pensioners.
The cost of living shock, then, is visited on all fuel-dependent economies, including that of Sri Lanka and there is very little governments could do to rein-in the ill-effects of these crises. However, the Lankan Government wouldn't remain complacent in the belief that fuel prices are beyond its control. It is leaving no stone unturned in its efforts to alleviate the cost of living burden. In fact, relevant Government bodies have been brought into being to check the upward spiral of the cost of living, to the extent possible.
As we see it, Sri Lanka has no choice but to ensure that its productive sectors are in fine fettle. We need to aim at an improvement in our economic fundamentals if we are to stay afloat in these times of economic uncertainty. For instance, we would do well to have a marked improvement in the growth of our exports over our imports and thereby enjoy better terms of trade.
Besides, we need to tap alternative energy sources if we are to offset some of the crippling effects of the fuel crisis. Rather than be overwhelmed by a mood of pessimism, we need to give serious thought to the steady development of alternative energy sources which could decrease our dependence on traditional fuels. Much has been said and written on this subject since the oil shock of the early Seventies, but, apparently, very little has been done to develop these alternatives to fossil fuels.
While we have been mulling over these options, Japan, we learn, has gone steadily ahead in developing solar panels as an energy source. Why haven't we made any headway in this direction for at least domestic cooking purposes? There is also wind and wave energy which needs to be considered. The current crisis, we hope, would trigger off a renewed interest in these alternative sources of energy among policy -planners and fuel new Research and Development ventures in this direction.
Another source of energy which is going abegging is coal. We know that coal power has been at the centre of controversy in this country, but we have no choice but to tap it judiciously if we are not to succumb to the energy crisis which is upon us. Coal power is used widely in India and with little or no environmental repercussions. The proportions of the current crisis oblige us to try out coal power.
Milk for all
Sri Lanka spends billions of rupees on milk powder imports every year. Bar one, all brands of milk powder are imported. Most milk powder importers effected an upward revision of prices recently, further affecting the consumer.
The solution is to rely more on fresh liquid milk, whose production and popularity need to be increased drastically to gain even a fraction of the market share currently enjoyed by powdered milk. The Government has set in motion a series of initiatives to increase the production of fresh milk. In this context, the needs and concerns of the dairy farmer must be taken into account.
It goes without saying that the dairy farmer needs a good price for his product, at least to cover production costs. Most of them are small-timers who supply milk to collecting and chilling centres owned by big companies. A realistic pricing scheme will enable them to expand their business gradually.
The Government has taken a step in this direction with Wednesday's announcement that it will increase the buying rate per litre of local milk by Rs.3 from September 1. The State has decided to fix a stable price of Rs.20 per litre for local milk. This will be effected in two stages starting from September. The Government also deserves accolades for its decision to provide milk to schoolchildren. Milk is essential for their well being and nutrition.
Improving local dairy production alone is not enough. Fresh milk must be made widely available at affordable rates. This could lead to a reduction in demand for imported milk. This is where the authorities have to perform a balancing act between the interests of the farmer and the consumer in a way that both can emerge as winners.
Although several private dairies sell liquid milk in plastic bottles in and around Colombo, they have not targeted the provinces. The National Livestock Development Board also runs a milk delivery service in the City. These retail operations should be expanded to cover every part of the island.
Fresh liquid milk is also guaranteed to be free of any chemicals and additives. It is also 'fresh' in the true sense of the word, whereas imported powdered milk could have been in storage for months, if not years. Specifying the dates of manufacture, packing and expiry on milk powder packs is now mandatory, but sub-standard storage conditions can lead to early damage. There were also instances of importers bringing in milk powder stocks unfit for human consumption.
All these factors can be highlighted in a campaign to popularise liquid milk. We hope that these steps will signal the beginning of a concerted effort to make Sri Lanka self-sufficient in milk.
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