- 44,000 MTs of paddy purchased
- Claims major losses incurred due to previous Cabinet’s decisions
With nearly 44,000 MT of paddy having been purchased by the Paddy Marketing Board (PMB) during this cultivating season, there are still no initiatives aside from the paddy purchasing programme to repay the Treasury.
Speaking to The Sunday Morning, PMB Chairman Manjula Pinnalanda stated that a sum of Rs. 6.6 million granted to the board by the Treasury would also have to be borne by it, as paddy continued to be purchased at higher prices than it was sold at.
He said: “The previous Cabinet set the purchasing and selling price of paddy. This led to the board incurring major losses. These loans are now being settled gradually.”
As detailed in the PMB Financial Audit Report for 2023, the Treasury took over the settling of loans granted by the Bank of Ceylon and People’s Bank during 2012-2019 due to the PMB’s inability to do so.
As such, a sum of Rs. 10.598 billion had been paid to the two banks by the Treasury from 2020 to August 2024, with a sum of Rs. 10.294 billion remaining further payable with respect to the period from September 2024 to September 2028.
The report notes that sums of Rs. 1,000 million and Rs. 840 million had been given at an interest rate of 11% on 28 January 2020 and 4 March 2020, respectively, by People’s Bank, with the interest rising to 15% in case of delays in settling the loans.
However, the payments for the loan and interest had not been made for a period of three years, making the total payable amount over Rs. 1.013 billion as of September 2024. A further sum of Rs. 6,500 million had been obtained from the Bank of Ceylon, which had snowballed into a total payable amount of over Rs. 368 million as of September 2024.
According to the report, action to settle the loans through the Treasury had been presented via a Cabinet paper.
Relatedly, in light of the 2025 Yala season harvest, the Government had secured Cabinet approval for additional funds to continue the purchasing of paddy.
The initial allocation for the paddy purchasing programme was Rs. 6 billion, with the board having spent Rs. 5.2 billion to purchase paddy from several districts.
Pinnalanda noted that the paddy purchasing programme was the only debt recovery plan in place at the moment.
There have been no other initiatives discussed towards repayment of loans settled by the Treasury yet.