Amidst growing concerns over the Government’s National Rice Distribution Programme, aimed at supporting low-income families, questions have arisen regarding its efficiency and financial prudence. 

The focal point of contention revolves around the significant variance between the cost allocated per kilogramme of rice under the programme and the prevailing retail prices in the local market.

As revealed recently, the Government is reportedly spending approximately Rs. 6,000 to procure 20 kg of rice for distribution through the programme. This revelation has sparked a wave of criticism, as it contrasts starkly with the retail prices of rice available in the local market.

Given that the cost per kilo under the programme exceeds market retail prices, concerns have been raised regarding the optimal utilisation of public funds allocated for the initiative.

Addressing the inauguration ceremony of the National Rice Distribution Programme at the Ambagasdowa Stadium in Uva Paranagama, State Minister of Primary Industries Chamara Sampath Dasanayake revealed that the Government was allocating Rs. 6,000 for each family to provide rice for two months, covering April and May. Under this programme, eligible families will receive a 10 kg pack of rice per month.

President Ranil Wickremesinghe, also present at the ceremony, highlighted his recommendation to purchase rice from small and medium-scale mill owners at rates higher than those in the local market. He further announced that 2.74 million low-income families would benefit from a monthly allocation of 10 kg of rice for two months.

Rice distribution to selected beneficiaries is currently underway, overseen by divisional secretaries nationwide.

Agri Ministry clarifications 

Amidst mounting scrutiny, a senior official from the Agriculture Ministry clarified that the initiative was financed by the Treasury, with the ministry tasked solely with distribution.

Addressing the rationale behind the choice of rice variety, the official said that the distributed rice belonged to the nadu variety, widely consumed across the country.

When pressed on the significant cost per kilo of nadu rice, currently estimated at Rs. 300, the Agriculture Ministry official explained: “The rice was procured by the ministry at higher rates from farmers, incorporating a margin for mill owners’ profit. Additionally, transportation costs contribute to the final price.” 

Highlighting the industry dynamics, the official added: “Rice production costs have escalated, influencing the retail price. However, it’s crucial to note that the cost varies across regions and Rs. 300 serves as a rough estimate.”

The official further noted that mill owners had been provided a low-interest loan recently by the Treasury.

Despite official explanations, market observations conducted by The Sunday Morning paint a contrasting picture of nadu rice prices. 

As of Wednesday (24), nadu rice prices at key locations such as the Pettah and Marandagahamula wholesale markets and the Pettah, Dambulla, and Narahenpita retail markets were substantially lower than the reported programme cost. A kilo of nadu was priced at Rs. 205, Rs. 203, Rs. 220, Rs. 210, and Rs. 220, respectively, at these markets.

Farmer union raises questions 

Amidst mounting uncertainty, farmer unions have challenged the reported cost of nadu rice under the Government’s National Rice Distribution Programme. According to these unions, it is implausible for nadu rice to be priced at Rs. 300 per kilo in any market across the country.

All Ceylon Farmers’ Federation (ACFF) President Namal Karunaratne provided insights into the calculation of rice prices based on production costs, saying: “Nadu rice was procured by the Government at Rs. 105 per kilo. To determine the rice price, this cost should be multiplied by 1.6, as it takes 1.6 kg of paddy to produce 1 kg of rice. Additionally, Rs. 25 should be added to cover all expenses. This constitutes the rice price formula.”

Karunaratne said that the average cost of a kilo of rice should not exceed Rs. 200, even with a maximum margin of Rs. 20 per kilo.

He reiterated the implausibility of nadu rice being priced at Rs. 300 per kilo, urging the authorities to investigate the matter promptly. He also raised concerns about potential miscalculations or irregularities, emphasising on the need for transparency and accountability. 

“Even keeri samba rice is available at around Rs. 350. This warrants a thorough investigation. It is essential to determine whether the programme is politically motivated ahead of upcoming elections and to ensure the proper utilisation of funds,” Karunaratne said.

“Further questions arise regarding the Government’s actions a few months ago, when it purchased rice at a higher cost and sold it for around Rs. 80 per kilo, resulting in a loss of nearly Rs. 50 per kilo. If the intention was to distribute rice to low-income families, why were these rice stocks sold at a loss?” he questioned. 

Rice mill owners’ objections 

Adding fuel to the debate, All-Ceylon Small and Medium-Scale Rice Mill Owners’ Association President B.K. Ranjith vehemently refuted claims of the Government’s expenditure of Rs. 300 per kilo of rice. 

Ranjith emphasised that the predominant rice variety being distributed was kekulu (red), as it was the only variety available at a lower cost. He stated: “The Government requested rice from us, but we cannot supply it at the specified prices.” 

According to Ranjith, a kilo of nadu rice costs approximately Rs. 215, while kekulu (white) rice exceeds Rs. 190. However, the Government has urged mill owners to provide rice at around Rs. 184 per kilo. Consequently, kekulu (red) rice, priced at approximately Rs. 180, is predominantly distributed in most areas.

Highlighting the current market scenario, he emphasised that a 10 kg pack of nadu rice now costs around Rs. 2,150-2,160.

Moreover, he raised concerns regarding recent loans provided to small and medium-scale mill owners for purchasing and storing paddy. He lamented that only a few mill owners had been able to secure the loan, attributing this to the majority of mill owners being listed in the Credit Information Bureau (CRIB).

Ranjith criticised the allocation of loans, stating that it primarily benefited large-scale mill owners.

A question of public funds

Amidst the conflicting statements and revelations surrounding the National Rice Distribution Programme, a crucial question emerges regarding the expenditure of taxpayers’ money.

On one hand, Government officials assert a cost of Rs. 6,000 for procuring 20 kg of rice per family, while farmer unions and mill owners contest these figures, citing significantly lower market prices.

If the Government indeed incurred losses by selling rice at lower prices previously, why is the cost now reportedly inflated?

Furthermore, statements from mill owners indicate a discrepancy between Government-set prices and actual market rates, raising doubts about the accuracy and transparency of the procurement process.

Are ministers truly unaware of the actual cost, or is there a broader issue at play regarding the allocation and utilisation of public funds?

Attempts made to contact Agriculture Minister Mahinda Amaraweera and Treasury Deputy Secretary R.M.P. Rathnayake were futile.