Reviving rural economy, safety net for urban poor
There were no additional cases of COVID-19 infections detected by yesterday evening but, the medical authorities remain alert as ever in expectation of more detections to come, even as the deadly contagion slows down in the country. The number of positive cases recorded stood at 238 and fatalities at 7.
Although it is far too early yet to make any holistic estimate of the country’s overall performance in managing this worst ever pandemic to hit the world in a century (since the Spanish Influenza), already Sri Lanka is being regarded as a ‘success story’. The WHO, which is the apex global body governing humanity’s health, has already complimented the President on his Government’s management of the crisis. One private sector professional business agency has rated Sri Lanka as 9th best in managing the pandemic so far, behind Norway, South Korea, China and other richer states.
With much of rural sector only marginally affected by the pandemic, the Government’s focus on economic revival is first looking at agricultural production both for domestic food supply and for exports.
While the Government is taking steps to ensure that the country’s agriculture sector functions normally with the start of a new rice crop season (Yala), the agro-exports auctions are also busy amid the constraints and tensions of operating in a pandemic.
The nation’s farming community, amounting to about eight million of the population, may also be under lockdown, but the farmers themselves have been allowed to pursue their productive activities even though they must follow the health safety guidelines. Some rural hamlets, especially those near the pandemic’s urban and semi-urban hotspots, have also been subjected to isolation programmes due to contact with positive cases or actual detections.
But it is the hotspots of the Western Province and the major urbanised districts of Kandy and Jaffna that still remain under rigid and continuous curfews. Such is the concentration of COVID-19 cases in these regions that, in the Western Province alone, over 14,000 people are currently in government-run special quarantine facilities undergoing their mandatory quarantine period for contact with positive cases.
Nevertheless, while much of the urban and industrial sectors of the economy are functioning at a lower pace, the rural sector has been able to proceed with a considerable degree of normalcy. This is also to the credit of the thousands of agriculture administrator cadres who have risked their health to be at the forefront of the management of agricultural production.
Today, the millions of urbanites are yet benefitting from deliveries of most food necessities without too much inconvenience, thanks to this efficiency in the management of the agricultural (and fisheries) sector. True, there are many bottlenecks – like clogged delivery order systems, delivery delays and shortages of goodies for foodies – but no one is threatened by starvation.
Most vulnerable are the urban poor in their overcrowded inner city neighbourhoods are often the least served by supply services, even those services organised by public agencies. The Government needs to ensure a better efficiency in the services being provided to the urban poor.
The challenge remains of ensuring good prices for farmers on the one hand, and timely deliveries and good prices for consumers on the other.
With nearly 800,000 hectares under rice production alone, the Government has relied on the Paddy Marketing Board, a venerable institution of Sri Lanka’s post-colonial renaissance, to ensure a fair price for the farmers. However, not all farmers access the PMB, nor can the Board cater to every single farmer at every harvest.
The middle-man who buys whole sale – sometimes on credit – from the farmer and then sells to the rice mills and urban distributors, plays a vital role in keeping the rural economy ticking over. The Government continues to be challenged to manage these mid-point sectors in the domestic rice economy carefully to ensure that neither the farmers nor the consumers are fleeced by means of market manoeuvres.
Meanwhile, the Government must also look ahead to the revival of the urban and industrial economy in the post-pandemic era. With the severe slowdown of these sectors due to the pandemic restrictions, they are the most affected. And the more these sectors are affected negatively, the greater their social impact in terms of reduced employment and reduced incomes, which, in turn, means reduced consumption.
This is a vicious cycle that can only be addressed by active State intervention in terms of massive credit outlays and moratoria on existing credit. The Central Bank has done well in initiating such programmes (despite the country’s reduced reserves) and the nation now expects the private sector, especially the banking sector to step up and perform their role in reviving the national economy.
Although it is far too early yet to make any holistic estimate of the country’s overall performance in managing this worst ever pandemic to hit the world in a century (since the Spanish Influenza), already Sri Lanka is being regarded as a ‘success story’. The WHO, which is the apex global body governing humanity’s health, has already complimented the President on his Government’s management of the crisis. One private sector professional business agency has rated Sri Lanka as 9th best in managing the pandemic so far, behind Norway, South Korea, China and other richer states.
With much of rural sector only marginally affected by the pandemic, the Government’s focus on economic revival is first looking at agricultural production both for domestic food supply and for exports.
While the Government is taking steps to ensure that the country’s agriculture sector functions normally with the start of a new rice crop season (Yala), the agro-exports auctions are also busy amid the constraints and tensions of operating in a pandemic.
The nation’s farming community, amounting to about eight million of the population, may also be under lockdown, but the farmers themselves have been allowed to pursue their productive activities even though they must follow the health safety guidelines. Some rural hamlets, especially those near the pandemic’s urban and semi-urban hotspots, have also been subjected to isolation programmes due to contact with positive cases or actual detections.
But it is the hotspots of the Western Province and the major urbanised districts of Kandy and Jaffna that still remain under rigid and continuous curfews. Such is the concentration of COVID-19 cases in these regions that, in the Western Province alone, over 14,000 people are currently in government-run special quarantine facilities undergoing their mandatory quarantine period for contact with positive cases.
Nevertheless, while much of the urban and industrial sectors of the economy are functioning at a lower pace, the rural sector has been able to proceed with a considerable degree of normalcy. This is also to the credit of the thousands of agriculture administrator cadres who have risked their health to be at the forefront of the management of agricultural production.
Today, the millions of urbanites are yet benefitting from deliveries of most food necessities without too much inconvenience, thanks to this efficiency in the management of the agricultural (and fisheries) sector. True, there are many bottlenecks – like clogged delivery order systems, delivery delays and shortages of goodies for foodies – but no one is threatened by starvation.
Most vulnerable are the urban poor in their overcrowded inner city neighbourhoods are often the least served by supply services, even those services organised by public agencies. The Government needs to ensure a better efficiency in the services being provided to the urban poor.
The challenge remains of ensuring good prices for farmers on the one hand, and timely deliveries and good prices for consumers on the other.
With nearly 800,000 hectares under rice production alone, the Government has relied on the Paddy Marketing Board, a venerable institution of Sri Lanka’s post-colonial renaissance, to ensure a fair price for the farmers. However, not all farmers access the PMB, nor can the Board cater to every single farmer at every harvest.
The middle-man who buys whole sale – sometimes on credit – from the farmer and then sells to the rice mills and urban distributors, plays a vital role in keeping the rural economy ticking over. The Government continues to be challenged to manage these mid-point sectors in the domestic rice economy carefully to ensure that neither the farmers nor the consumers are fleeced by means of market manoeuvres.
Meanwhile, the Government must also look ahead to the revival of the urban and industrial economy in the post-pandemic era. With the severe slowdown of these sectors due to the pandemic restrictions, they are the most affected. And the more these sectors are affected negatively, the greater their social impact in terms of reduced employment and reduced incomes, which, in turn, means reduced consumption.
This is a vicious cycle that can only be addressed by active State intervention in terms of massive credit outlays and moratoria on existing credit. The Central Bank has done well in initiating such programmes (despite the country’s reduced reserves) and the nation now expects the private sector, especially the banking sector to step up and perform their role in reviving the national economy.