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The rice war intensifies

02 Oct 2021

  • Farmers allege poor policy and favouritism will leave public out of pocket
  • Alleges corruption and malpractice in state departments
By Yoshitha Perera Both farmers and consumers might face serious consequences in the next few months due to the Government’s inability to manage the ongoing “rice mafia” in the country, farmers’ associations and consumer rights groups claimed. Speaking to The Sunday Morning, Sri Lanka Rice Producers’ Association (SLRPA) Secretary Mudith Perera predicted that in the coming months, the price of a kilo of nadu rice would increase to Rs. 150. “As the Association representing small and medium-scale mill owners, we do not have a serious concern regarding the prices offered by large-scale mill owners last week. However, the question is whether those who proposed the prices would be able to sustain it in the upcoming months,” he said. He claimed that the main reason for the rice crisis was the lack of knowledge of the three ministers in charge of the subject. “We would like to point out that even with the state of emergency in place, this situation could not be controlled due to the failure of the three ministers,” Perera charged. National Movement for Consumer Rights Protection (NMCRP) President Ranjith Vithanage, speaking to The Sunday Morning, claimed that the Government had failed to identify the root causes of the local rice production issue, and said that large-scale mill owners were benefiting by increasing the prices of rice as a result of the Government’s inability to control the situation. “We request the Government to appoint a special committee to observe this matter and to reduce the price of the staple food in the country,” Vithanage appealed. Stressing that the current predicament was of the Government’s making, All Island Farmers’ Federation (AIFF) National Organiser Namal Karunaratne said the Government had failed to handle the matter even after promulgating a state of emergency to prevent the increase in the prices of essential commodities. Last week, the Government revoked the gazette notification issued by the Consumer Affairs Authority (CAA) that imposed maximum wholesale and retail prices on rice. Following the removal of price controls, the Large-Scale Mill Owners’ Association (LSMOA) announced revised retail prices for rice. The per kilo prices were announced by LSMOA Chairman Dudley Sirisena during a media briefing last week. They are nadu at Rs. 115, samba at Rs. 140, and keeri samba at Rs. 165. The mill owners had also decided to increase the rates of paddy purchased from farmers. The rates per kg are nadu at Rs. 62.50, samba at Rs. 70, and keeri samba at Rs. 80. As per the powers vested with the President in terms of Section 2 of the Public Security Ordinance, on 30 August, President Gotabaya Rajapaksa declared emergency regulations on essential food supply. According to the President’s directive, the authorised officers would be able to take steps to provide essential food items at concessionary rates to the public by purchasing stocks of essential food items including paddy, rice, and sugar at government-guaranteed prices or based on the Sri Lanka Customs value on imported goods. This step was taken in order to prevent market irregularities that were inconveniencing consumers as a result of essential food items including paddy, rice, and sugar being sold at higher prices, which was due to the stocks of these items being hoarded by suppliers. Following this, the President appointed Maj. Gen. M.D.S.P. Niwunhella as the Commissioner General of Essential Services (CGES) to co-ordinate the supply of paddy, rice, sugar, and other essential goods. Importation of rice In June, the Government decided to import 100,000 metric tonnes of rice to maintain a buffer stock, which was met with strong opposition. AIFF National Organiser Karunaratne told The Sunday Morning that there were several problems with regard to the importation plan. According to him, the Government could spend close to $ 41 million for the importation of rice, and he questioned the decision to import a large stock of rice in the midst of a foreign exchange crisis. “We would like to ask the Government why they were spending the limited foreign reserves unnecessarily when there is a shortage of dollars,” he said. Karunaratne pointed out that large-scale mill owners would not incur any losses due to the Government’s decision to import rice but stated that small and medium-scale mill owners would suffer major losses. “The Government said they were importing rice to maintain a buffer stock in the country, but this was only one of the reasons. Officials attached to (Lanka) Sathosa and certain ministers were very keen to continue the shortage and the rising prices of rice, so that they could import rice at a lower cost and earn large commissions,” Karunaratne alleged. Karunaratne further claimed that large-scale mill owners were well aware of the above-mentioned process, charging that after some time, the relevant government officials would obtain reports from labs stating that the rice was “unfit for human consumption” after keeping it in storage for many months. “The relevant officials collect large sums in commission by selling the expired imported rice to government agents at a very low price under the label of ‘unfit for human consumption’ after storing it for many months. The ‘unfit’ rice purchased at a lower price is then mixed with edible rice and released to the market,” he alleged. Karunaratne pointed out that the imported rice would have been produced using chemical fertiliser. Do we need to import rice? According to the Central Bank of Sri Lanka (CBSL)’s 2020 annual report, the country’s annual paddy production in 2020 was estimated to be sufficient to meet the household rice demand of the country for approximately 17 months. Accordingly, out of the paddy produced in 2020, some paddy was used for consumption in May 2021. As per data shared by the Department of Census and Statistics (DCS), the amount of rice the country needs for consumption per year is around 3.6 million metric tonnes, and farmers need to sow nearly 100,000 metric tonnes of paddy per year. The amount of paddy the country produced in 2020 was around five million metric tonnes. Additionally, one million tonnes of paddy that were produced in 2019 were also utilised in 2020, thereby bringing the total amount in 2020 to six million metric tonnes. According to government statistics, nearly 2.4 million metric tonnes of paddy were added from the total paddy production of 2020 to the year 2021. Meanwhile, Karunaratne said that during the Maha season in 2021, the farmers produced about 2.5 million metric tonnes of paddy, adding that the farmers were currently harvesting paddy in the Yala season. He pointed to this as evidence that there was no shortage of rice in the country. Government’s response When The Sunday Morning contacted CGES Maj. Gen. Niwunhella to get further insights on the matter, he said that he could not comment, as the decision with regard to rice was taken by the Cabinet. Sharing his views with The Sunday Morning, State Minister of Co-operative Services, Marketing Development, and Consumer Protection Lasantha Alagiyawanna said the Government had decided to import 100,000 metric tonnes of rice after receiving cabinet approval to maintain a buffer stock. Meanwhile, Ministry of Trade Secretary Bhadranie Jayawardhana said the Ministry was yet to place the order for the importation of 100,000 metric tonnes of rice. “We have not reached a decision on when to place the order, what type (of rice) to order, and from where we would be making the order,” she said.

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