High and rising food inflation an added blow to poor: Dushni

• Trend to have significant implications on poverty as poor households spend bulk of income on food
• High prices are due to poor infrastructure for produce to reach consumers, not drop in harvest
• Food inflation surged to 11.3% in June, largely due to supply-side constraints caused by COVOD-19-related restrictions

By Shabiya Ali Ahlam
The high and rising price inflation related to food during the pandemic adds to the list of concerns of the national economy, as the ongoing trend in food prices would have serious implications on poverty, senior economist Dr. Dushni Weerakoon said.

With food price inflation reaching around 10 percent by the end of May, the Institute of Policy Studies (IPS) Executive Director cautioned the continuation of this trend would have significant implications for poverty, as poor households spend the bulk of their income on food.

“The burden is made worse for the poor because when we look at the concentration of work, most are to be found to be engaged in agricultural activities,” said Dr. Weerakoon while addressing a webinar hosted by the International Food Policy Research Institute 
(IFPRI), yesterday.

While it was initially expected for food production and distribution to be impacted by the implications stemming from the health crisis and related restrictions, Dr. Weerakoon pointed out that the drop in harvest is not the reason for high prices but the poor infrastructure for the produce to reach consumers.“Farmers are harvesting, they are bringing their produce to markets with the greatest difficulty but having brought that produce, they find that there is no way of getting that distributed to the rest of the country.

Increasingly, it is also a fact of inadequate storage and transportation infrastructure that is hampering the distribution of supplies in these kinds of emergency situations,” said Dr. Weerakoon. She also stressed the need to embark on a digital transformation journey in every sphere of economic activity, which is essential for Sri Lanka to recover from the implications arising from the COVID-19 pandemic.

Sri Lanka’s food inflation in the month of June jumped to 11.3 percent, largely due to supply-side constraints created by the pandemic-related lockdown-like restrictions.