The Institute of Policy Studies (IPS) forward of the Budget 2022 presentation has forwarded the next proposals too to the Finance Ministry for consideration.
Food Security
Ensuring nationwide meals safety
National meals safety just isn’t solely a query of availability, however contains the opposite components like meals costs, meals utilization, and meals provide stability. Hence, all these elements influencing meals safety must be thought of in coverage formulation.
While the federal government’s coverage framework, ‘Vistas of Prosperity and Splendour’ (VPS) recognises the significance of introducing an agricultural crop administration system, there is no such thing as a correct mechanism to observe how this can have an effect on meals utilization, costs, and provide.
At current, the farming group is compelled to endure huge losses throughout the harvesting season due to the seasonal glut in provide.
Meanwhile, intermediaries and the opposite gamers within the excessive finish of the worth chain achieve as a result of they will management costs by means of controlling provide. This has implications on the meals safety of the nation and the welfare of farmers.
Recommendation
Establish an digital-based mostly monitoring system for the meals programs in order that home meals manufacturing, imports, market costs, enter availability and many others., could possibly be constantly monitored to make sure nationwide meals availability and family entry to meals.
A daily monitoring system can safeguard the native meals provide from worldwide commerce restrictions and potential malpractices by native merchants. Give precedence to ascertain a holistic, coherent mechanism to make sure excessive-high quality data is necessary.
This data must be simply accessible throughout sectors for monitoring dangers to meals safety. Such a system can present precious data for coverage makers to take motion to make sure meals safety.
Big knowledge instruments akin to satellites, telecommunication networks, sensors, drones, and smartphones have the potential to deal with meals system challenges by bettering availability of knowledge.
Developing e-commerce for meals system resilience
As communities are more and more depending on markets for their meals safety and vitamin, correctly functioning market chains and the uninterrupted circulation of agricultural merchandise are key parts inside meals programs. Shocks that disrupt market actions akin to disasters and pandemics could cause appreciable injury to households’ meals availability, in addition to their entry to and utilisation of meals.
VPS recognises the significance of introducing a brand new strategic plan for product advertising and marketing together with programs of pre-contracts between producers and exporters.
However, at current, the farming group is poorly related with markets and intermediaries achieve arbitrage alternatives whereas rural producers obtain decrease costs because of the lack of market data, poor infrastructure, weaker bargaining positions, and prolonged advertising and marketing channels.
Recommendations
IPS proposes to extend the capability of e-commerce to minimise the issues in meals provide chains and to make sure meals system resilience. The elevated demand for digital advertising and marketing platforms throughout the COVID-19 pandemic could possibly be capitalised to advertise the capability of e-commerce at each ends of the meals provide chain.
For instance: The Govipola Mobile App and the pilot challenge on Smart Agri Village have been funded by EU. Such Information and Communication Technology (ICT) platforms, regardless of capability considerations, have already confirmed helpful to extend the resilience of the actors within the meals system akin to farmers, merchants, and customers.
Further, a mechanism must be developed to assist join smallholders to the e-commerce platform to stop elite seize of the digital market. In this regard, linking farmers’ cooperatives with the e-commerce platform or constructing Public-Private-Producer-Partnerships (4P) could possibly be essential.
Public investments in creating an e-commerce-platform to create a digital market to attach farmers and markets and to extend the supply of product and worth data to patrons and sellers, to enhance meals availability, and meals safety whereas defending farmer welfare is really useful.
Strengthening regulatory and enforcement mechanism for natural fertiliser imports
The proposed ban on chemical fertiliser imports will probably be a major shock to the agricultural programs of Sri Lanka and most definitely will probably be untenable.
Sri Lanka should revisit the import ban earlier than it fails resulting from its implementation challenges creating huge disruption to the nation’s agricultural sector.
IPS analysis means that Sri Lanka can undertake a ‘sustainable intensification’ method that anticipates a gradual discount of using chemical inputs mixed with good agroecological manufacturing practices, to extend natural fertiliser use additional time. Further to the ban, the federal government has determined to import natural fertilisers.
Unlike inorganic fertilisers, that are inert supplies, natural fertilisers are extremely setting-particular stay supplies that would have irreversible environmental repercussions.
Therefore, the regulatory, implementation, and enforcement mechanism of the standard requirements have to be strengthened with quick impact (with the coordination of related authorities establishments like National Plant Quarantine Service (NPQS); SLSI; Sri Lanka Atomic Energy Agency; ITI, and many others) to make sure that meals ecosystems within the nation will not be adversely affected by introducing natural fertiliser.
Recommendations
Prudent software of a mixture of devices instead of the import ban on chemical compounds is required akin to tariffs on chemical fertiliser imports, tax concessions/subsidies for native manufacturing of natural fertiliser to advertise the manufacturing and use of natural fertiliser.
Along with this, the standard of chemical fertiliser imports must be regulated to safeguard native agriculture. Programmes to construct consciousness on environment friendly use of natural fertiliser may also assist farmers with the shift to natural fertiliser use.
Tobacco Taxes
Streamlining tobacco tax will increase
IPS analysis exhibits that growing tobacco taxes has the dual advantages of bettering well being in addition to growing authorities income.
At a juncture when authorities funds are tight, coverage options akin to taxing tobacco could be leveraged to spice up authorities income with out threatening financial development.
Increasing tobacco taxes within the forthcoming Budget might increase substantial quantities of further income for the federal government.
IPS estimates that the federal government might have earned practically Rs. 20 billion in further excise tax income from cigarettes in 2020, if cigarette taxes had been raised by 10 p.c in keeping with inflation and streamlined to a uniform tax. This quantities to just about 1.5 p.c of whole authorities income in 2020. An identical income achieve could be anticipated from a ten p.c improve in tobacco taxes this yr.
Recommendation
Given that cigarette taxes haven’t been revised in practically two years, since December 2019, the federal government ought to use this chance to boost taxes, to achieve the dual advantages of improved well being and monetary outcomes.
SMEs
Developing the artistic and cultural industries
Much of Sri Lanka’s artistic financial system – which contains of conventional and fashionable cultural and inventive industries – fall into the class of small and medium industries (SMIs). Lack of linkages to attach rural cultural and inventive business artisans with the related institutes and public companies is a matter, regardless of programmes to assist and encourage artistic enterprise actions performed by totally different public establishments.
Lack of consciousness, lack of coordination amongst numerous sectors of presidency, and restricted consideration given to rising cultural sectors – akin to trend designing, software program, graphic designing, digital media – are some recognized points on this sector.
Recommendation
Streamlining authorities programmes referring to artistic and cultural programmes and construct capability in public establishments to supply environment friendly and efficient companies to artisans in artistic industries.
The outcomes of initiatives to develop the sector have to be monitored and adjusted to enhance effectiveness additional time. Special consideration must be given by public establishments to fill the above-talked about coverage gaps.
Proposed actions will appeal to rural youth into the sector, which can generate new employment alternatives and assist the event of the agricultural sector.
Social Protection
Repositioning social safety
The International Labour Organization (ILO) Social Security (Minimum Standards) Convention, 1952 (No. 102) (ILO C.102) specifies 9 key branches of advantages that social safety programmes are anticipated to ship. These are: medical care, illness, unemployment, outdated age profit, employment damage, household profit, maternity profit, invalidity profit, and survivor’s profit.
Although totally different social safety schemes can be found in Sri Lanka to supply some sorts of advantages beneath all 9 schemes of ILO’s Social Security Convention (ILO C.102), their protection may be very low. Sri Lanka can be but to ratify the minimal customary in social safety as specified within the Convention.
Recommendations
Social safety contributions in lots of nations are channelled to numerous funds for offering numerous sorts of social safety advantages (i.e., maternity advantages,
illness advantages).
Use an identical system to broaden life-cycle social safety to staff contributing to Employees’ Trust Fund (ETF).
IPS calculations present that about 1.5 p.c of the wage invoice (or half of the ETF contributions) is ample to cowl maternity advantages, illness advantages, and unemployment advantages to satisfy the minimal necessities laid out in ILO C.102 for these contributing to ETF.
An extra 0.2 p.c of the full wage invoice might cowl wage assist to corporations to retain the employees who contribute to ETF in instances of catastrophe. Follow worldwide greatest practices and optimise using ETF funds to supply wider advantages to its contributors.
Such a scheme will allow staff to profit from social safety all through their lifecycle and facilitate the ratification of the ILO C.102 of minimal social safety requirements. Greater life-cycle advantages will encourage extra staff to contribute to ETF.
This could have minimal affect on the finances as allocations for probably the most half will probably be from the ETF fund. Such a change in focus must be finished in concurrence with totally different stakeholders to take care of transparency
and belief.
https://www.dailymirror.lk/editorialbusiness/IPS-proposals-for-Budget-2022-Part-II/340-224350
