ECONOMYNEXT - Sri Lanka's milk powder distribution is caught between high import taxes and price controls, despite plunging world prices, Lanka Milk Foods, a dairy company has said, in line with pincer controls seen in several other sectors.
Global milk powder prices reached high levels two year ago amid but most food commodities including oil and metals are now falling as the US Federal Reserve has stopped excessive money printing and the dollar is going up.
Sri Lanka's rulers who imposed price controls when global food prices went up, then started to tax import milk powder. Taxes on milk powder was raised from 57 to 82 and to 135 rupees a kilo.
After a January 2015 budget, rulers forced firms to cut prices by 152 rupees a kilo.
"Simultaneously, the increasing import duty on imported milk powder will continue to make milk powder a luxury and not a necessity, as should be the case for the citizens of the country," Lanka Milk Foods told shareholders in the annual report.
"The maximum retail price imposed by the government authorities serves to have a detrimental effect on the selling price of the final product, thereby affecting the accessibility to a nutritious essential product such as milk, which provides the dietary calcium requirement for children and adults."
LMF said it had resumed distribution of Lakspray branded milk powder after a six month gap.
Though Sri Lanka got independence from the British in 1948, freedom activists say native rulers then intensified controls on the people, using tool inherited from the British such as customs department to try to make the population dance to their tune.
One of the ruler fads is to force people to drink liquid milk, though the price of liquid milk has been driven up to unaffordable levels by state mandated farmgate prices which are raised to create an autarky due to nationalist ideology imported from Europe or to win elections, analysts say.
As a result in Sri Lanka liquid milk is higher than the rest of the world, and there is no incentive for dairy farmers to improve productivity. The rulers have tried to undermine the milk powder industry despite many households being unable to afford refrigerators.
LMF group also has its own farms set in the hill country where high yield milk cows are grown. It runs Ayrshire and Friesian breeds.
The firm said the heard at Ambewela Dairy Farm & New Zealand Dairy Farm is constantly improved from selected imported cattle semen. Fodder maize and imported varieties of rye grass are also being grown as pasture.
Analysts say other sectors in the food industry such as poultry has also been caught by state pincer controls preventing the ability of the people to feed themselves.
Chicken is price controlled but the price of maize is kept high through import duties to create an autarky, hurting chicken farmers and pushing them out of business. Sri Lanka's chicken prices are also out of line with world prices due to the maize autarky.
Protein malnutrition is high among poorer children in Sri Lanka, which analysts say is partly due to a vicious National-socialist style autarky to create self-sufficiency through high prices and import controls.
Global milk powder prices reached high levels two year ago amid but most food commodities including oil and metals are now falling as the US Federal Reserve has stopped excessive money printing and the dollar is going up.
Sri Lanka's rulers who imposed price controls when global food prices went up, then started to tax import milk powder. Taxes on milk powder was raised from 57 to 82 and to 135 rupees a kilo.
After a January 2015 budget, rulers forced firms to cut prices by 152 rupees a kilo.
"Simultaneously, the increasing import duty on imported milk powder will continue to make milk powder a luxury and not a necessity, as should be the case for the citizens of the country," Lanka Milk Foods told shareholders in the annual report.
"The maximum retail price imposed by the government authorities serves to have a detrimental effect on the selling price of the final product, thereby affecting the accessibility to a nutritious essential product such as milk, which provides the dietary calcium requirement for children and adults."
LMF said it had resumed distribution of Lakspray branded milk powder after a six month gap.
Though Sri Lanka got independence from the British in 1948, freedom activists say native rulers then intensified controls on the people, using tool inherited from the British such as customs department to try to make the population dance to their tune.
One of the ruler fads is to force people to drink liquid milk, though the price of liquid milk has been driven up to unaffordable levels by state mandated farmgate prices which are raised to create an autarky due to nationalist ideology imported from Europe or to win elections, analysts say.
As a result in Sri Lanka liquid milk is higher than the rest of the world, and there is no incentive for dairy farmers to improve productivity. The rulers have tried to undermine the milk powder industry despite many households being unable to afford refrigerators.
LMF group also has its own farms set in the hill country where high yield milk cows are grown. It runs Ayrshire and Friesian breeds.
The firm said the heard at Ambewela Dairy Farm & New Zealand Dairy Farm is constantly improved from selected imported cattle semen. Fodder maize and imported varieties of rye grass are also being grown as pasture.
Analysts say other sectors in the food industry such as poultry has also been caught by state pincer controls preventing the ability of the people to feed themselves.
Chicken is price controlled but the price of maize is kept high through import duties to create an autarky, hurting chicken farmers and pushing them out of business. Sri Lanka's chicken prices are also out of line with world prices due to the maize autarky.
Protein malnutrition is high among poorer children in Sri Lanka, which analysts say is partly due to a vicious National-socialist style autarky to create self-sufficiency through high prices and import controls.
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