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Rice prices: Dwindling stocks challenge prices 

20 Mar 2021

  • Possible rice shortage: Mill owners 

  • Will import rice if required: Govt. 

  • Stocks sufficient for nine months: PMB 

  Just weeks ahead of completing the harvesting of paddy that was cultivated during the Maha season, consumers are observing a shortage in rice stocks in the market.   While the Government is confident that there will be sufficient stocks of paddy with the government paddy reserve that could be processed into rice in the coming months, paddy farmers have stated that private mill owners have reached out to them to purchase paddy at a higher rate.  “We have to dry the paddy and then sell it to the Government at the controlled price of Rs. 50 per kilogramme. Meanwhile, the private mill owner is willing to purchase the wet paddy at Rs. 46.85 from us, but the Government is saying they can only purchase the wet paddy at Rs. 44. Therefore, we have now decided to sell off our paddy to the private mill owner,” R.M. Sunil, a farmer from Marandagahamula, stated. Araliya Rice Mills Chairman Dudley Sirisena, who owns one of the large-scale mills in the country, said that during this season, farmers had experienced an unexpected amount of rain just about a month-and-a-half prior to harvesting and most of their paddy turned rotten.   “The paddy stock that was supposed to be harvested this season therefore is halved from the forecasted amounts. During other seasons, we generally have surplus stocks, but this time, we do not have any surplus stock left with us. Which means the country will face a rice shortage – i.e. in locally produced – in the coming months,” Sirisena reiterated.     Govt. to improve rice reserves    With talks of a possible rice shortage and an increment of rice prices being speculated, the Minister of Agriculture, Minister of Plantation, and even the Minister of Trade have assured that several measures are in place to ensure that the rice prices would be maintained at the controlled price that is presently in place.   Speaking to The Sunday Morning, Plantation Minister and Co-Cabinet Spokesman Dr. Ramesh Pathirana said that the Government will not hesitate to import rice or supply it to the people at concessionary prices if the private sector tries to create a shortage of paddy by concealing stocks.  “The Government will intervene to convert the stocks of paddy obtained by the Paddy Marketing Board into rice and provide it to consumers at the relevant guaranteed prices through Sathosa during the festive season,” Dr. Pathirana said.  Meanwhile, the Minister of Agriculture Mahindananda Aluthgamage has assured that if large-scale paddy mill owners take action to increase the price of rice during the New Year and Vesak seasons, the Government would import 100,000 metric tonnes of rice and maintain it as a government reserve.  “We will take a decision on importing the said consignment of rice from India or Pakistan in April. However, we will also wait for the harvesting of paddy to complete for the Maha season by 5 April, so as to not be unfair on the local farmers,” Aluthgamage noted. He also stated that during a recent Cabinet meeting, it was discussed how the consumers are being severely inconvenienced due to the action taken by the owners of large-scale paddy mills to increase the price of rice. “Large-scale paddy mill owners are using various tactics to further increase the price of rice and to control the situation, they will sell rice at Rs. 97 per kilogramme through Sathosa and co-operatives outlets,” Aluthgamage noted.   He also revealed that President Gotabaya Rajapaksa has instructed the Ministers of Agriculture and Trade to conduct raids to find those who are hiding paddy stocks.   He noted: “Raids are being carried out by the Consumer Affairs Authority (CAA) to find those who are hiding stocks of paddy. We can assure the public that there would be no shortage of rice in the country due to the expected paddy harvest this Maha season.”  Responding to the news of private mill owners purchasing paddy at higher rates, Minister of Trade Dr. Bandula Gunawardana noted: “Just because the private mill owners are purchasing paddy at a higher rate than the Government, does not mean that they will be able to sell the processed rice at a higher rate to the market. We will make sure that sufficient rice reserves would be maintained with the Government, so that the consumer could purchase rice at the controlled price through Sathosa.”    Union questions govt. failure    National Agrarian Union President Anuradha Tennakoon, being critical about the statement made by the Minister Aluthgamage on the Government’s efforts to keep the rice prices under control, said: “The statements that the Agriculture Minister have made, make no sense. Although the Government says that they have a process in place to purchase paddy at a high price, we have observed that process failing. Amidst that, the price of rice in the market too is sharply increasing.”  Tennakoon pointed out that the Ministry of Agriculture has threatened to cut the fertiliser subsidy if the farmers do not provide 1,000 kilogrammes of paddy to the Government. Meanwhile, private mill owners are buying paddy at a rate higher than the Government’s price in excess of the guaranteed price.  “Although the Government has set a guaranteed price for paddy, it is in fact controlling the price of paddy and rice unofficially to the benefit of large-scale mill owners and enforcing the price points on small and medium-scale mill owners to handover paddy stocks to large mill owners for processing. This again works in the favour of the large-scale mill owners to make a profit,” Tennakoon exclaimed.     Paddy sufficient for nine months     Paddy Marketing Board (PMB) Vice Chairman Duminda Priyadarshana, commenting on the paddy stocks that would be available in the country following the completion of the Maha season harvest, said: “The harvest of the coming Maha season will be sufficient to fulfil the country’s paddy requirement for a period of nine months. According to the crop forecast shared during the harvest forecast meeting held at the Mahaweli Ministry, the Yala season harvest will be sufficient to fulfil the consumption requirement of the country for another six months. Accordingly, there will be a surplus of around 600,000 metric tonnes during the Maha season alone.”  Priyadarshana also noted that many of the issues that were faced by paddy farmers have now been sorted out.   He further noted that the paddy price that was at Rs. 38 per kilogramme has now been increased to Rs. 50.  He added: “Farmers no longer sell paddy at low prices. In the past, when the paddy was harvested, the warehouses were not open. Fifty percent of the harvest was bought by the private sector at a reduced price. It was only afterwards that the Government gave money to the Paddy Marketing Board to directly purchase paddy stocks from the farmers.”   According to Priyadarshana, on 13 February, the first harvest of the Maha season was purchased from the Government from the Eastern Province. “At present, the Government has allocated Rs. 16 billion to purchase paddy. Steps are taken to expedite those functions through state banks and 325 warehouses are now open to purchase 325,000 metric tonnes with the allocated budget. The Paddy Marketing Board meanwhile has allocated Rs. 5,000 million to purchase paddy through government agents and co-operative societies as well.” 

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