Double trouble over turmeric?

By N Sathiya Moorthy

Independent of commercial and diplomatic issues attending on the government of President Gotabaya Rajapaksa ordering overnight ban on the import of turmeric a couple of months back, the colour of the much-delayed Provincial Council polls, whenever held, could well be yellow. The huge shortage and consequent black-marketing, where the price of the condiment has shot up beyond five times the Government-fixed open-market price of LKR 750 have meant that almost every other home has to do without turmeric in their everyday cooking, or hoard whatever is available like dear live.

Sri Lanka produces about 2,000 tonnes of turmeric a year. The annual demand is 7,000 tonnes – or, more than thrice the local production. No cooking in the country, religion and ethnicity no bar, is complete without turmeric. Rather, no traditional Sri Lankan cooking can begin without turmeric. For Tamil Hindus especially, turmeric is also a sign of auspiciousness. Every Hindu home thus has additional use for the yellow root in their daily pujas, weddings and every other auspicious occasion – and also in their kovils, or Hindu temples.

Sri Lanka used to meet its demand for turmeric from its own production until some time ago. But the production did not match up with the demand, as population grew and the acreage under turmeric cultivation came down drastically. It is also attributed to the UNP Government’s switch over to open market economy in the seventies, which the successor, Left-leaning SLFP Governments did not seek to reverse.

With the result, for an agrarian economy, Sri Lanka continues to import milk-powder for daily home-use, when the preference should have been to promote animal husbandry in a big way. The nation has been importing exotic fruits from Australia and such other nations while local fruit farming too was allowed to decay.

It was in this background, President Gotabaya’s Government prioritised reviving traditional industries and sectors over the next five years. The aim was to make the nation self-sustaining in as many fronts as possible and also cut down on extravagant spending on imports, where they could be avoided or replaced, thus saving substantial amounts of foreign exchange.

Noble thought, but…

It’s of course a noble thought, yes, and a very practical way of saving on forex reserves, given the inherent limitations of the nation’s economy that has been ignored over the past several decades. Today, as the current Government has acknowledged, 86 per cent of the GDP goes towards debt-servicing. The Covid crisis has worsened the economic situation more than already, whether inherited by this Government, or by the predecessor, which got it all from another Rajapaksa regime, that of President Mahinda Rajapaksa, now Prime Minister.

While all of it sounds pretty well and welcome over the medium and long terms, what seems to be the Government’s unthinking decision to ban turmeric import, as if it were among the trial cases, that too overnight, has caused untold misery for the housewife. Already, with economic recession and Covid-induced job losses and pay-cuts pinching the pocket by the hour, to imagine that a household has to spend substantially on the purchase of an otherwise ordinary condiment as turmeric should baffle the economist, agronomist and the housewife, all at once.

It looks as if the Government has put the cart before the horse. The appropriate and meaningful way was to fund and facilitate turmeric farming in larger acreage, purchase the produce for the Government to stock and sell to the market through existing sources, and thus boost the farmer’s confidence and consumer’s morale. Then, and then alone should the import ban even be thought of.

That’s to say, the Government should have waited for two or three years at the very least before intervening in the market and negatively at that, through the ban. Today, the turmeric ban has only denied the basic food item to the people across the country, rich and poor, traditional constituencies of the ruling Rajapaksas and adversaries alike. It is thus not unlikely that turmeric availability, black-marketing and price may become a key issue during elections to the nine Provincial Councils, which should have been conducted at least three years ago.

Short-term or what

When approached by local traders and others alike, President Gotabaya was known to have told a Cabinet meeting that whatever inconvenience was there would be there only for a short-term. The President, according to local news reports, was also strident in his decision not to change the earlier decision.

Over the long term, the local farmers stood to benefit, from the Government’s decision, and thus the nation’s economy as well. Positive policy initiative. The the success of the scheme, as and when it happens, alone could encourage the Government to take such bold steps on such other areas of the nation’s agrarian economy.

But the question is how short will this short term be. It is obvious that the goal of trebling if not quadrupling production, even if it is of an insignificant product as turmeric, cannot be achieved with the swing of a magic wand, if any. A lot of planning, both at the government-level from policy-making to ground-level implementation, and also at the grassroots level. There can be no denying the fact that given the low pricing factor, not many farmers may be interested in allotting larger acreage for turmeric farming, given the quantum of returns compared to some other crops.

Anyway, all of it would not have been possible within a couple of weeks, or even months. With the result, turmeric has become another product from smuggling from across the seas, from India, southern Tamil Nadu, to be precise.  It is an irony that every day newspaper reports talk simultaneously of the authorities capturing smuggle ‘Kerala ganja’ in large quantities and also that of turmeric from Tamil Nadu. Yet, news reports also talk about massive black-marketing in turmeric at high prices that are both unimaginable and unaffordable.

India angle…

When it is turmeric and the imports are from neighbouring India, can controversy be far away, even when it is only a commercial transaction involving private traders in the two countries? However, what should have remained a private issue among private traders is slowly but surely assuming bilateral political proportions, for a specific reason.

While the overnight import-ban has set in hard feelings across the country and against the Government, what hurts them most is the news that 50 containers of the farm produce is being allowed to rot in the Colombo Port. The containers had landed in the port around the time the Government announced the import-ban, and the local traders are prohibited from picking it up and market it.

Worse still is the plight of those importers, whose Indian suppliers seem not so unwilling to take it back, but the Government authorities do not seem wating to clear their return.  Local media reports have indicated that long ago when approached, President Gotabaya had asked President’s Secretary, T B Jayasundara, to look into the matter and sort out the issue.

However, weeks later, nothing seems to have moved. A section of those affected point out how Jayasundara as Treasury Secretary under President Mahinda Rajapaksa had reportedly created hurdles for the abandoned idea for an India-funded thermal power project at Sampur in eastern Trincomalee district. This was independent of other technical and environmental concerns raised at other levels, and also about the Government’s choice of the project site, to which the Tamil National Alliance (TNA) had strong reservations.

Today, in the changed circumstances, the Government’s seeming hurry and thoughtless decision, or the implementation of a well thought-out scheme, may raise doubts about the leadership’s ability to comprehend economic issues in their full dimension, and take decisions that are appropriate to the occasion, without getting sentimental or populist and failing in both.

Otherwise, Indian newspapers have reported how their farmers get a small margin on turmeric and their exporters too do not make big margin. As they point out, with Erode as the main procurement point for exporters to Sri Lanka, with shipment available at Chennai and Thoothukudi, the transportation cost too should be minimal. However, according to them, Sri Lankan importers have been making a killing all along, selling the imported turmeric at unscientific margins.

Making inroads

Going beyond the obvious, the imported turmeric comes from western Erode district in Tamil Nadu, and the region is a traditional stronghold of the ruling AIADMK. Unlike on earlier occasions, current Chief Minister Edappadi K Palaniswami also hails from the western region while the Opposition DMK has been failing successively in its repeated attempts at making inroads on a permanent basis.  That makes for a competitive politico-electoral situation.

In the Indian parliamentary polls last year, the AIADMK in the company of the ruling BJP of Prime Minister Narendra Modi at the Centre, failed miserably at the hands of the Opposition DMK-Congress combine. The West was among the worst-hit region, what with its industrial and agriculture sectors turning against the two ruling parties in the aftermath of Modi’s demonetisation and the additional hiccups caused by the implementation of GST.

According to a section of the Indian media, the overnight Sri Lankan ban on turmeric imports have hit the local exporters hard, that too at a time when the economy in the country too is reeling under the effects of Covid pandemic and even otherwise. In pure politico-electoral terms, it needs to be recalled how in Elections-2001 to the State Assembly, then DMK Government of Chief Minister M Karunanidhi lost badly, with free import of coconut oil and tea from Sri Lanka affected farmers in the very same western Tamil Nadu. Free import of coconut oil and rubber also cost the ruling Congress Party in neighbouring Keraal, the simultaneous polls of 2001.

From a purely Sri Lankan political perspective, the Rajapaksa leadership may have to consider the effect of the overnight ban on turmeric import on the farmer psyche in western Tamil Nadu, its impact on the ruling party and Chief Minister Palaniswami and their reflection in the conduct of the political Opposition, starting with the traditional DMK rival. With Tamil Nadu facing Assembly polls in May, and Sri Lanka facing the UNHRC vote in the March session, it remains to be seen how much could the unconventional decision of the Gota leadership impact on bilateral relations – just as the Tamil brotherhood concerns had done in the past.

Already, Sri Lankan media has reported the possibility of domestic trade-pressure in India forcing New Delhi to come up with reciprocal import ban(s) from Sri Lanka, too. After all, according to them, Colombo’s decision does not seem to have been taken with regional trade and cooperation in mind, but seems, instead, being influenced by hidden anti-India sentiments of a few. Now, with this ban on the import of the yellow matter, some also see the colour of Red hiding somewhere behind it. And Red is the colour of China!

(The writer is Distinguished Fellow and Head-Chennai Initiative, Observer Research Foundation, the multi-disciplinary Indian public-policy think-tank, headquartered in New Delhi. email: sathiyam54@nsathiyamoortjhy)