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Don't take rice lightly

04 Jul 2021

Rice is intrinsically political – it is the staple food for the majority of our population, and it is the livelihood of thousands of families along the value chain, from rice mill owners, paddy farmers, and field workers, to the seed and machinery segments, and logistics and sales networks. It has always been an affordable, easy to access, convenient source of nutrition for Sri Lankans, especially those in lower income groups – and in the past few months, the price of our staple rice has soared. That 90% of our rice stocks and their fortunes today lie in the palms of a few business oligarchs is both dangerous and untenable. Yet successive governments have had little success with wresting control away from what they have acknowledged is Sri Lanka’s rice mafia. The Government, which purchases less than 5% of paddy stocks is in no position to release those stocks to achieve even a semblance of price control. Historically, the threat of rice imports has been used as a measure of price intervention, with varying degrees of success. In the past week, the Ministry of Trade has made several about turns on the matter of rice imports; suggesting first that the possibility of imports was on the table, then declaring it off the table, but thereafter launching a bidding process to procure 100,000 metric tonnes of imported rice. The move, amid a dire forex crunch, comes hot on the heels of the Ministry suggesting that price controls were on the cards. All indications are that Sri Lanka currently has excess stocks of rice, and any shortage is entirely created artificially. 2020 was a good year for paddy; yields during the 2019/20 Maha season and 2020 Yala season totaled over five million metric tonnes. Similar yields were earmarked for 2021. In this scenario, imported rice – and that too of low-grade varieties – would serve only to flood the market and waste precious foreign exchange. While large rice mill owners will be relatively unscathed, it is the small and medium scale mills that will face the brunt of such imports, and consequently, the low income groups that purchase their wares. More importantly, where have all these rice stocks gone? And if they are sitting in warehouses maintained by the large rice mill owners, what storage conditions do they endure? What methods do they use to prolong the shelf life of such large quantities of rice? All questions that beg answers, especially given the Government’s single minded intent to ban chemical fertiliser applied in all agriculture, including paddy. The entire bio/organic farming project can potentially be compromised by the finished product being treated to last longer in storage. The rice oligopoly means everyone is losing out: the small scale farmer that commits all the hard labour; the Government and its agencies that subsidise inputs and provide technical knowhow; and the consumers forced to pay increasingly higher prices for their main source of nutrition. The entire system fails to protect the interests of the most vulnerable within it. The solution of course is to strengthen and empower the smaller mills; to transfer more power to farmer collectives so that they too have a voice in the market. But as the past years have shown, this has been easier to plan and debate than to implement and action. If, as predicted by most, the switch to bio-fertiliser leads to a drastic drop in output in the coming seasons, we must urgently act on the rice crisis we face. A yield gap seems inevitable at least in the short-term, and imports will only deepen our dollar crisis. Whatever solutions the Government proposes for the current imbroglio must thus consider the testy conditions we may face in the coming year. Rice is not a commodity to be taken lightly; its significance extends far beyond a staple carbohydrate. The politics of rice can make or break governments.


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