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Small, medium rice millers in dire straits

27 Sep 2022

BY Buddhika Samaraweera   Claiming that the Government always takes decisions thinking only of large-scale rice mill owners, the United Rice Producers' Association (URPA) stated that about 75% of small- and medium-scale rice mills across the country are inactive at present, and that the remaining 25% are not operating at full capacity. Speaking to The Morning, URPA President Kusumitha M. Perera said that 700-750 of the nearly 1,000 small- and medium-scale rice mills across the country have been closed due to the economic difficulties in the country and the Government's lack of attention to the problem. He also said that the remaining 250-300 rice mills currently in operation are only operating at 25% capacity, which has caused a serious reduction in rice production. He charged: “By next year, there will be no place to store paddy. The main reason is that a large number of small- and medium-scale rice mills have completely collapsed due to the Government's decisions. The Government always takes decisions with only the large-scale rice millers in mind. It is mostly of the view that running small- and medium-scale rice mills is not very important in increasing the local rice production." Explaining the difficulties faced by rice mill owners at present, Perera said that the interest rate of loans taken by them has increased to 26% to 30% during the recent past, and that most of the rice mills have been closed as it is very difficult to pay the related loan installments. He said that considering the situation, institutions like the Ministry of Agriculture and the Ministry of Finance should intervene and negotiate with the banks to provide some relief to the mill owners. "Due to the unlimited import of rice, the demand for local rice has decreased over the past few months. The taxes imposed on imported rice have been greatly reduced, so that imported rice can be sold at a lower price. However, we have to bear a huge cost to produce rice with the prevailing economic situation. Therefore, it is not possible to sell local rice at a low price like imported rice. This has seriously affected the rice mill owners as well as the farmers," he added. Speaking further, Perera said that in order to uplift the local farmer and rice mill owners, some subsidy programmes should be implemented for them, and that the import of rice should be stopped or taxes levied on rice imports should be raised. He also said that by launching such a programme, the benefit of increasing local rice production will ultimately go not only to the farmers and mill owners, but also to the consumers. Noting that the harvesting in the Yala season has commenced now, the Agriculture Ministry recently stated that due to the further importation of rice, certain rice mill owners may buy paddy from farmers at cheaper prices. In order to prevent the farmers from not getting a fair price for the paddy, the Ministry has planned to suspend the importation of rice until December. A Cabinet proposal in this regard had been submitted by Agriculture Minister Mahinda Amaraweera last month. However, the relevant institutions have not yet taken the necessary steps to implement the said proposal. Sri Lanka's agriculture sector, mainly paddy cultivation, has suffered a major setback since April, 2021, with the ban on chemical fertilisers and agrochemicals. Since then, farmers have been charging that they have not been able to get the expected harvest, despite the use of organic fertilisers provided by the Government. Given this situation, the Government allowed the importation of rice, and the then Agriculture Minister Mahindananda Aluthgamage said that he personally disliked the Government's decision to import rice as the move could reduce the price paid for paddy farmers.  


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