Sri Lanka has increased import tariffs on big onions and potatoes to Rs. 50 (US$0.17) and Rs. 80 (US$0.27) per kilo, respectively. The Ministry stated that the Special Commodity Levy (SCL) was previously Rs. 10 (US$0.03) for onions and Rs. 60 (US$0.20) for potatoes, with the higher duties aimed at protecting local farmers.
The policy comes while the country continues to face economic difficulties. According to LIRNEasia, four million people fell into poverty during the crisis, raising the total to seven million. World Bank data indicates that nearly 25% of the population now lives below the poverty line, with the Department of Census and Statistics estimating that Rs. 17,000 (US$57.40) per month is required to stay above it.
Retail prices are expected to rise. The Department of Census and Statistics notes that onion prices currently average Rs. 140 (US$0.47) per kilo. With the revised levy, prices are projected to reach Rs. 170–180 (US$0.57–0.61). Potatoes, priced at Rs. 300 (US$1.01) per kilo, will likely move to Rs. 310–320 (US$1.05–1.08). In supermarkets, potatoes are already listed at Rs. 340 (US$1.14) and onions between Rs. 190 and Rs. 230 (US$0.64–0.77).
Farmers receive fertiliser and seed subsidies, but the number of onion and potato growers is small compared with the consumer base. Analysts argue that direct cash support tied to output would be more effective than tariffs, which pass costs onto households.
Concerns have also been raised about corruption risks. Tariffs that change overnight allow traders with prior knowledge to import before adjustments and benefit from higher prices afterward. With onions and potatoes, which store for over a month, this risk is amplified. Similar issues were seen previously with sugar levies, and other staples such as garlic and rice are also affected by sudden tariff changes.
Higher food tariffs can influence wages across the economy. Rising costs of essentials lead workers to seek higher pay, increasing production costs, and lowering competitiveness. The International Monetary Fund's Governance Diagnostic has urged Sri Lanka to remove discretionary powers over tariffs and noted the need for reforms under the Strategic Development Projects Act.
With the SCL increases, household grocery bills will rise further. Critics note that support for farmers should be provided through targeted measures rather than across-the-board consumer price increases.
