By Waruni Paranagamage

The Ministry of Finance yesterday announced that the import levy on a kilogramme of potatoes had been increased by Rs. 10 with immediate effect.

The move sought to ensure a better and more reasonable price for local farmers who were engaged in potato cultivation.  As a result of the tax hike, the selling price of imported potatoes will increase from Rs. 70 to Rs. 80 in the local market. 

The Department of Agriculture’s (DoA) National Potato Coordinator A.G.C Babu told the Daily FT that the Ministry of Agriculture’s officials had requested the Government for a fixed duty on imported potatoes in order to maintain a equivalent selling price with local production.   

“Yala production will enter the market by September and our mission is to pass on the benefits of a certified price to local farmers. At present the selling price of imported potatoes is around Rs. 65 to Rs. 70 per kg in the local market. We expect to increase the selling price and create sufficient demand for local production in the market,” Babu added.

As an outcome of the budget proposal, the Government introduced a certified price for local potato farmers at Rs. 80 per kilogramme and increased the import levy on potatoes by Rs. 40 per kilogramme. However, the levy was again revised to Rs. 10 in the middle of 2015. 

The Ministry of Agriculture is expected to produce 40,000 MT of potatoes in the Badulla, Nuwara Eliya, Jaffna and Puttalam districts during the ongoing Yala season. According to DoA data, the annual potato harvest amounts to more than 80,000 MT islandwide. However, it further revealed that Sri Lanka imports 120,000 MT of potatoes annually from India, Pakistan and China to meet local demand.