Parliament oversight committee milks Trade Ministry dry

In recent times, senior government officials who testified before Parliament Select Committee meetings without being adequately prepared and submitting documents without contextual knowledge often end up as a laughing stock in the face of the media as those sessions are broadcast live.

One such incident unfolded last week when the Committee on Public Finance (CoPF), headed by Dr. Harsha de Silva, questioned a senior official attached to the Trade Ministry as to why the pricing formula for imported milk powder was not implemented.

The official was unaware whether the Trade Ministry or the Consumer Affairs Authority (CAA) is vested with regulatory powers about the price formula.

When Dr. de Silva questioned the high prices of imported milk powder in the market by saying, “Then where's the price formula?" The official responded by saying, "There's no price formula to be implemented. Dr. de Silva reminded him: “Why not? I made the price formula back in 2018.”

Dr. de Silva pointed out that the formula came into effect for implementation with the support of relevant stakeholders, including milk powder companies, the Treasury, the Central Bank, and the Auditor General. “If the world market price is decreasing, how can you sell milk powder for a higher price while making a substantial profit, and when was the price formula removed?” he asked.

The official responded, “I will have to check and tell you.”

Thereafter, the official proceeded to contact a CAA director, who told him that there was a price formula that was compiled for a year, but it was not approved by the Treasury.

Unsatisfied with the response, Dr. de Silva then spoke to the director himself to find out whether the price formula was due to be renewed every year. But he was told the Finance Ministry failed to renew it in 2019.

When the Trade Ministry official was questioned as to why the price formula was not renewed, the response was that the Treasury had not approved the formula.

Pointing out that this was one such example of “poor governance” of the Ministry, Dr. de Silva ordered the officials present to provide a report on the reasons behind the discontinuation of the pricing formula in 2019.

After the showdown at the parliament oversight committee meeting, the ministry had to fix the issue to save itself from public scrutiny online and offline, in addition to social media platforms.

Trade Minister Nalin Fernando announced on Tuesday (12) that the price of milk powder would be reduced by Rs 150. However, milk powder companies opposed to the minister's announcement indicated that they were willing to reduce the price only by Rs 100. A final decision is to be taken on the matter tomorrow following a meeting with all stakeholders.