PARLIMENT

Cooperatives Ministry has made tremendous progress - Minister Johnston Fernando

Sandasen Marasinghe, Irangika Range and Disna Mudalige

Speaker Chamal Rajapaksa presided when Parliament met at 9.30 am on Saturday.

After presentation of papers and oral questions, the House took up the financial heads of Co-operations and Internal Trade Ministry, Traditional Industries and Small Enterprise Development Ministry and Industry and Commerce Ministry during the third reading debate on Appropriation Bill 2012.

Dr Harsha de Silva (UNP) The government should take steps to reduce post harvest losses. Making it compulsory to use plastic crates for transporting vegetables and fruits is not the only solution to reduce harvest loss. You must have a proper cultivation plan to decide what should be cultivated to cater to consumer needs.

The export policy of the country must be considered and implemented carefully. The trade deficit has increased and has reached US$ 8 billion.

You must move to export diversification. You need to diversify export items. It is necessary to implement an export policy which ensures the reduction of the trade deficit.

Douglas Devananda: (Traditional Industries and Small Enterprise Development Minister)

We are committed to provide a political solution to the ethnic conflict. We are in the process of finding such a solution.

But the TNA members want only to grab power and they have no real urgency to find solutions to the problems faced by the Tamils.

TNA members never appreciate the development drive initiated by the government for the betterment of the Tamil people in the North and East. They enjoy luxury lives without extending their support to the government to solve the problems of the Tamils.

I am committed to fulfill the needs of my community.

The objectives of TNA members and requirements of the Tamil people are two different things. The government is not hesitant in resolving the problems of the Tamils. The Tamil people expect a reasonable solution to the ethnic issue.

All ethnic communities in this country have a right to live in peace. They have equal aspirations. I expect all your support to achieve these tasks.

The mandate of the Traditional Industries and Small Enterprise Development ministry is to fulfill the Mahinda Chintana vision of upgrading, expanding and strengthening the traditional industries and small, medium industries and enterprises to make them more dynamic and vibrant economic sectors. This would enable them to contribute significantly to the GDP by producing world class value added products that can compete both locally and internationally. My ministry assists small, medium enterprises by providing infrastructure facilities and industrial estates to enable them to operate successfully and expand their activities smoothly. The ministry directed the implementation of “Divi Neguma” national programme, on cottage industry, production village programme, national Kithul development programme, re-activation of Atchchuveli Industrial Estate, Palmyrah Resech Institution and developing the Elephantpass saltern.

Anura Kumara Dissanayake: (DNA) The Export Development Board (EDB) Chairman uses the funds of EDB for his own welfare. Whose money is this? Today, the EDB imposes many taxes on the export items of innocent exporters and spends huge amount of money.

You must stop this wastage. Otherwise the common man of this country will have to bear these burdens.

A proper study should be conducted to reduce the post harvest loss of agricultural crops. The Internal Trade Minister thinks that the only solution for post harvest loss is to introduce plastic crates to transport agricultural crops.

You must have a proper market research to identify what the consumer needs.

There should be a production plan and cultivation plan for fruits and vegetable. Otherwise, the cultivator would not know what to cultivate. You must understand the market demand. Otherwise, huge stocks of agricultural produce would go to waste. The final result would be a harvest wastage. We have never ever utilised the scientific methodology to pluck fruits. This has resulted in post harvest loss. There is also no proper packaging system to pack agricultural crops.

Basheer Segudawood (Co-operatives and Internal Trade Deputy Minister)

Both consumers and farmers have been given priority by this government. We impose the rule of using plastic crates for transporting fruits and vegetables to provide fresh items to consumers. This will minimize post harvest losses of agricultural products.

But farmers were misled and used by certain parties to act against this rule. The main objective of this process is to reduce spoilage occurring to the agricultural crops during transportation. When we eat spoilt food, we could fall sick.

We are in the process of setting up new marketing centres in the North and East for the benefit of farmers.

Rs 175 million has been allocated for this purpose. This would provide facilities to farmers in the North to sell their produce easily.

Sritharan: (TNA) A number of malpractices are taking place in Co-operative Societies in the North and East. People have been appointed to the Co-operative Societies based on political influences. Elections to Co-operative Societies have not been held in a democratic manner.

S Sritharan (TNA): The Wattakkachchi farm in Kilinochchi had its produce sent to Jaffna. There were a large number of youths there in the past, but it was occupied by Security Forces personnel during the conflict.

The Tamil people were not able to give evidence to the LLRC.

Industry and Commerce Deputy Minister Jayaratne Herath: When industries were considered in the past, they were centralized to Colombo. We have decided to decentralize them by setting up new industries in rural areas. There are 52 Industrial Zones and 35 are being constructed.

Around 80 percent of them are medium scale industries. We have provisions to provide them relief. We have introduced degree and diploma programmes for the leather and apparel industries.

When these industries commence they are given incentives.

We have organized various fairs and exhibitions with the support of the Export Development Board to boost the export market.

We have entered into many bilateral and multilateral agreements to encourage exports.

A D Champika Premadasa (UNP): As a traditional industry the “Beedi Cigar” is very popular. During the SWRD Bandaranaike regime this industry was encouraged. All Beedi smuggled into the country from India was seized.

But this traditional industry in not being encouraged by this government. If this industry faced a problematic situation most villagers who produce “Beedi” would lose their source of livelihood. There are “Beedi” produces who do not pay tax, and action would be taken against them. “Beedi” leaves are imported from India, these plants can be grown in Sri Lanka.

Athauda Seneviratne (Rural Affairs Senior Minister): MP Premadasa spoke about the “Beedi” industry, Those employed in this industry are exploited and not paid well. So I request the Labour Minister to intervene in this matter to find out the truth. Beedi businessman become very rich and they have many other businesses. Smoking and Kasipu make people unhealthy. So we do not encourage them. The minimum salary for a worker employed in the Beedi industry is Rs 8000, but they are not paid that salary.

We have to initiate a course to educate members of cooperatives.

This government is taking measures to strengthen the co-operatives in the rural areas.

Ajith P Perera (UNP): The co-operative system is very important to society. We have to protect this system. The poor people’s relief in the co-operative in their area. But this system is corrupt due to politicization. It was the same during the UNP regime as well. These co-operatives should be developed, leaving aside all party differences.

The matter of plastic crates to transport vegetables and fruits have become an issue now. But its better if we could find an alternative for plastic crates. We have seen the way fruits which are imported from foreign countries are packed. These packings are produced from a paper mixed paste which could be recycled. We can go for such an alternative instead of plastic crates.

Livestock and Rural Community Development Deputy Minister H R Mithrapala We are conducting this debate to facilitate the Opposition to express their views. The Opposition should actively participate in it. The government is doing a collective job. We have presented our policies, so it is up to the Opposition to point out the good and bad in them.

2012 is the International Co-operatives Year. Many countries in the world hare come together to uplift the co-operative sector in their respective countries. Sri Lanka should also pay more attention towards this sector.

Lak Sathosa outlets are rendering a tremendous service to the people. The Lak Sathosa network covers the whole country. It is a profit making institution today under the present regime.

A H M Azwer takes the chair

Dayasiri Jayasekara (UNP): Trade Ministers have always been subjected to blame for various things from time immemorial and Minister Johnston Fernando is no exception.

When importing cement, the SLSI certificate is essential in order for it to be sold in the local market.

However, the Lucky Cement Consignment imported from Pakistan did not have the SLSI approval when it was imported.

This Lucky cement consignment had been released from the harbour before obtaining the SLSI approval. The Customs department should also be responsible for this act. This cement consignment was distributed to shops countrywide.

Culture and Arts Minister T B Ekanayake: It is plain to see that MP Dayasiri Jayasekara is the main debater in the UNP now, since the party faces a scarcity of debaters.

Regional Development Banks and the Co-operative sector are interconnected. In the past this sector was running at a loss.

However, under the present leadership these Co-operative stalls are earning good revenue. Coop cities have been able to attract consumers. Those have been able to compete with private sector super markets. The President has facilitated Rs 100 million from this budget to establish small and traditional industrial villages. These villages will also attract tourists thereby helping these people earn good profits.

Pon Selvarasa (TNA): The people do not have an opportunity to sell their palmyra products. Today there is so much plastic products in the market and the demand for brassware products is much less in the market. Most of the goldsmiths and traders in Colombo have come from Jaffna. When we consider the Co-operatives, I would like to say there are very big super markets near some co-operative shops.

These co-operatives cannot compete with these supermarkets

Felix Perera (Social Services Minister)

During the conflict in the North, a vast area which was abandoned was not cultivated. Most of the farmers joined the LTTE. Now they all have resumed cultivation and fishing industry. The farmers lost their source of livelihood because of the open economy. The UNP is responsible for creating a conducive environment for the LTTE. The produce from the Northern farmers is sold across the country now. So the North-South bond is strengthening.

Now, I would like to say Sathosa is selling the biggest proportion of the fish production. We have to use technology to preserve fish, meat and vegetables.

We have to say to our Tamil brothern we will buy your harvest. Let us live like siblings.

Anoma Gamage (UNP) The living standards of the people cannot be enhanced merely through statistics.

The Banks and other institutions in the country today feel the affects of the global economic crisis. The country also feels the affect of the transfer of global economic power from the western to the Asian region.

The country’s import expenditure in two fold compared to the export income. This budget and government does not protect local investors. Most of the foreign investors to whom we spoke, ask as to why the Sevanagala factory was taken over by the government.

Thilanga Sumathipala (UPFA) The talking point these days is the use of plastic crates to transport vegetables and fruits. This is a good move. We have to implement new laws for the benefit of the country. Though the Opposition members say there is no attraction from foreign investors to Sri Lanka, it is not true.

A large number of investors are being attracted to the country because of its stability.

The budget has allocated Rs 150 million and Rs 200 million respectively, for cinnamon and rubber cultivations.

Gayantha Karunathilake (UNP) During the last week, the people were eagerly talking about the internal Trade Ministry. It is a good move to use plastic crates to transport vegetables and fruits.

But the method you used to implement the law was wrong. Because of this incident a massive quantity of vegetables were spoilt which resulted in an increase in prices.

Rohana Kodithuwakku (UPFA) There was prior notice to use the plastic crates to transport vegetable and fruits. But the farmers and other traders did not pay proper attention to it. As the opposition said the farmers did not have to pay thousands of rupees for plastic crates. A big box costs about Rs 200 and a small box is Rs 100 for the entire month. Traders can lease them.

Steps will be taken to solve this issue within a month.

Due to floods and drought, there was a shortage of certain vegetables in the local market. The prices of essential items constantly fluctuated, since there was no institution to act as a price controller. However, Sathosa has now reached every village. Therefore, it has gained the position of a price controller in the local market.

Traditional Industries and Small Enterprise Development Deputy Minister Weerakumara Disanayake: We have a series of programmes in line for the promotion of traditional industries.

We hope to select about 5000 small entrepreneurs and help transform them into medium scale entrepreneurs. At the same time, 200 medium scale entrepreneurs will be supported to become key entrepreneurs in the country.

During the past years we have taken a number of initiatives for the promotion of Kitul and palm industries. There are an estimated three million Kitul trees in the country. Now we have provided the necessary facilities to develop palm cultivation in the North.

Through the ‘Divi Neguma’ programme, we hope to introduce new industries to selected families. At least 2000 families will be introduced to new industries. In the Batticaloa district alone “Divi Neguma” provides training and guidance for new enterprises.

Throughout the budget debate, the opposition has been unable to make any constructive criticism.

Hareen Fernando (UNP): The interest shown by the government and opposition to participate in the budget debate is insufficient. The lack of enthusiasm shown by our party can be excused, since there is a problem within our party.

There is a problem with regard to the prices of goods. The Cost of Living is rising and the prices of goods has skyrocketed. The lives of farmers have been made difficult by the implementation of new regulations to use plastic crates. Those were the people who gave their votes to the UPFA to win and form a government. This government has forgotten them. Even though the regulations were postponed the minister stressed that those will be strictly implemented once again.

Deputy Chairman of Committees Chandrakumar Murugesu takes the Chair:

Minister of Industry and Commerce Rishad Bathiudeen At the outset I would like to mention that Review of Activities 2011 of the Ministry Industry and Commerce has been tabled and distributed to all Members of Parliament. It contains the performances and the activities of the ministry and the Institutions coming under its purview and a general review of the respective sectors. It also mention about the future plans and the projects and joint ventures undertaken by my ministry in collaboration with the private sector.

President Mahinda Rajapaksa, presented the seventh budget of this government, on Monday November 21, mainly focusing on socio-economic, infrastructure development, and relief to the poor. The President, in his first term of office, stood firmly to eradicate terrorism from the country, and against all odds, he succeeded in achieving it. His second term of office is dedicated to improve the economy of the country, and make Sri Lanka a trading hub, and wonder of Asia. It is really a continuation of the economic development programme introduced in the 2010 Budget.

Despite the economic growth being around 6% from 2005 to 2009 it could reach around 8 % in 2010 and 8.2 % in the 1st half of 2011. What is striking is that the inflation stood at 5 % in October 2011 which is significantly lower than the growth rate. In that light it is important to note that in 2010 the Industry sector was able to record the highest sectoral growth of 8.4 % contributing 28.7 % to the GDP. In the 1st two quarter of 2011 it recorded 11 % and 9.5 % growth respectively. Percentage wise it was above the national growth. In 2011 1st quarter export earnings expanded significantly by 54.3 % while the Industrials Exports indicated an increase of 63.8 % to US $ 2078 Mn. This shows that the industry sector has played its part in this economic revival.

On the same day, the budget was presented, the Central Bank announced, that Sri Lanka’s GDP growth for 2012 would be around 9 percent, which I believe is a very positive sign for us. I am confident that the Industry and Commerce sectors too will make their respective contribution. This year’s budget is also focused towards export development and a key contribution is the rupee devaluation which increase our export competitiveness and drive the economy towards achieving the government’s target of US dollar 20 billion export earnings by 2020. If I may quote the President’s own words for the reason behind this move, “As our country has experienced the strengthening of the exchange rate, in the backdrop of those countries that are competing with our country, as well as our neighbouring countries have depreciated their exchange rates significantly.”

Together with the wide ranging tax concessions for various private sector undertakings announced in this budget, the devaluation of the rupee will give a further boost to our export manufacturing sector. My ministry is also supporting cost savings initiatives at the manufacturer’s side. In December this year, the Productivity Division of my Ministry has commenced a nine month project at a cost of Rs 4.5 million on the private public partnership model to make 16 private sector industries become energy efficient. I should also stress that we should not depend only on cost competitiveness to sustain our export growth. We should also strive to build our export brand name international markets by developing unique selling propositions. My ministry is focusing on those lines and during the year under review the Sri Lanka Cinnamon brand and pure Ceylon tea brands were launched. Similarly launching of Ceylon Blue Sapphire and geographically indicators for tea is planned next year. Other top gainers in the industrial sector, are rubber finished products, food, beverages and tobacco, non-metallic mineral products, leather products and wooden products. The ministry of Industry and Commerce has formulated 5 year plans for the Industrial Sector as well as Textile Sector (2011-2015) to streamline the set targets for a highly value added knowledge based internationally competitive and diversified sector with highly skilled workforce.

Based on that the ministry and the institutions coming under it are conducting a variety of programmers in collaboration with the private sector, Academic Institutions and Chambers. They are basically conducted on public private partnerships. Product sectors/thrust areas have been given much emphasis by focusing on value addition, high productivity, product diversification and branding in view of capturing high returns while conquering high end markers and in turn reducing imports.

Among our exports, textiles and garments contributed 39.5 %, to the total export earnings and have increased by 27.4 %, despite the withdrawal of GSP Plus facility, showing the high quality of our garment products. Sri Lanka exports products and services of 1.7 billion euros to the EU, about 29 percent of Sri Lanka’s total exports. Garments and the textile sector, take 55 percent of the value of Sri Lanka’s exports to the EU, amounting to more than one billion euros. Among the commitments by my Ministry on textile and apparel sector are 22.7 million financial progress shown on north-extension of the building of the Department of Textile and Clothing Technology of University of Moratuwa as part of my Ministry’s Fashion Design and Product Development efforts, the “ethically manufactured apparels” image building programme with the collaboration of Joint Apparel Association Forum at a cost of Rs 1.3 Million, the Productivity improvement Programme in association with Sri Lanka Institute of Textile and Apparel with Rs 6.8 million financial progress, SME skill development programme for the apparel sector with Rs 3.6 million progress, and the plans to start a new independent laboratory with ISO 17025 accreditation for powerloom industry testing.

I am pleased to announce that the US GSP programme, which came to a temporary halt at the end of 2010, has now been extended till the end of 2013 and the US President, (resuming zero-duty tariff concessions, to all GSP-entitled products on retrospective basis with effect from 1 January 2011) was expected to sign the Reauthorisation Bill into law shortly, thereby giving additional stimulus to our export efforts. As a major stepping stone to achieve our export target of S 20 billion by 2020, I am pleased to announce that a mega export show of international scale will be held in Sri Lanka after 15 years, called Sri Lanka Expo 2012, the theme of which is “Partnering with the Hub of Asia.”

I am pleased to announce that this event has now been elevated by the Government to a national event and it will now be coordinated by a powerful Cabinet appointed Ministerial committee and also a high level Official Committee.

This event will also instill global buyer confidence in Sri Lanka’s production capabilities. Strong interest has already been expressed by some EU countries and even Iran, Pakistan and India to join as exhibitors in Expo 2012. However since 300 Sri Lankan export firms on show, we may find it difficult to accommodate them. To enhance our exports drive we also revived the well-known Exporters’ Forum on September 27 after two years’ lapse immediately solving several key issues faced by our exports community. This action was highly acclaimed by the private sector and the chambers.

Co-operatives and Internal Trade Minister Johnston Fernando: As a ministry we have made tremendous progress. We have achieved this growth with a limited number of human and physical resources. I extend my special thanks to all officials of our ministry and its affiliated institutions for the dedicated service.

President Mahinda Rajapaksa as a person who entered politics from the co-operatives movement also provides constant support and guidance to us.

The Department of Standards and Measurements, which is under my ministry has achieved tremendous progress in the recent past.

In 2009, it had only conducted 1577 raids. But upto September this year the Department had carried out 9000 raids. From these raids, the Department had earned Rs 100 million for the government. Now we are building a new laboratory with all facilities for this department in Homagama at a cost of Rs 1.5 billion.

On the other hand, the cooperatives sector has also developed a lot and it has been strengthened from all aspects, under the leadership of President Rajapaksa. The President has provided much relief to this sector. We hope to upgrade the co-operatives sector to the level of international standards within the next four years.

It was the UNP which closed down the Paddy Marketing Board. It is they who harassed farmers and are now shedding crocodile tears on behalf of the farmers. It was President Rajapaksa who eliminated the poverty of farmers by allowing them to stand on their own feet again.

The fertilizer subsidy, which the UNP failed to initiate, was initiated by President Rajapaksa, in the same way he directed our forces to win the war, which many previous regimes thought impossible.

The Opposition most often spoke about the plastic crates issue. This rule was not introduced in a hurry. We conduced a careful study in to it for about three to three and a half years before we decided to initiate it.

After the gazette was issued President Rajapaksa discussed about it with many groups. We gave sufficient time as a grace period. We have already distributed about 200,000 plastic crates to the farmers. Fifty percent of the cost of them were borne by the government. We have not fined or arrested any farmer, and those were false allegations. First, we only inspected lorries entering Colombo city. Only several groups which exploit farmers are against this rule.

If we took any decision it was done for the well-being of consumers and the country.

The finance heads were passed without amendments.

The House was adjourned until 9.30am today.