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| Sunday, 27 February 2005 |
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Govt intervenes to stabilise paddy prices by Gamini Warushamana The Government has intervened to purchase paddy and rice on a large scale to eliminate malpractices in the private sector dominated market. The Treasury has allocated Rs. 2,000 million to purchase paddy and has assured to provide any amount required by government agencies to purchase paddy in this Maha season. According to ministry sources Co-operative Societies and Agrarian Service Centres are involved in paddy purchasing at 1,305 locations. Markfed also purchases paddy. To ensure the government's program functions well 25 trained graduates have been employed to supervise the program. The Government expects to purchase 70,000 MT of paddy in this Maha season. Government agencies will purchase 25,000 MT from Ampara, 25,000 MT from Polonnaruwa, 10,000 MT from Anuradhapura, 6,500 MT from Kurunegala and 3,500 MT from Hambantota districts. The government is also encouraging the private sector to purchase paddy at higher prices. "The Government is not attempting to create a monopoly in the sector and instead stimulating fair competition to ensure the paddy price is above cost of production and profitable to farmers", a Ministry spokesman said. Accordingly government agencies are purchasing 1 Kg of Samba and Red Parabola at Rs. 16.50 and Nadu at Rs. 15.50. The government's purchasing prices of 1 Kg of Nadu in 2003 and 2004 were Rs. 15 and Rs. 13. The Ministry is now registering private mill owners and private traders who are involved in paddy purchasing. The Government is considering to provide low interest loans to registered traders. One objective is to get information about stocks. Last year the government was able to increase paddy purchasing prices in the market. Accordingly in some areas private traders purchased Samba and Red Parabola at Rs. 20 and above. However, all attempts by the government to bring down the price of rice in the open market failed. The main reason is the private sector cartel of a few traders in the sector. Sources said that 19 traders hold control of the whole rice market in the country. They controlled the stock of paddy therefore the market demand for rice could not be met. However, one reason for the price increase last year was the short supply in the drought hit Yala season. As productivity in paddy cultivation has increased, government expects a harvest of 1.95 MT in 2004-05 Maha season, the highest paddy harvest the country has ever achieved. The harvest in the 2003-04 Maha season was 1.89 MT. This season between 575,000-600,000 hectares have been cultivated and it is lower than last year. Despite cultivation being destroyed on a large scale due to floods and tsunami the Maha season harvest has increased significantly. Paddy cultivation on 15,000 hectares have been destroyed and floods account for 12,500 hectares. The main reason for higher harvest this season is improved productivity. The steps taken by the government to encourage farmers and the government guarantee for a higher price are the main reasons for increased productivity. The Government continues to provide the fertiliser subsidy even with the increasing world fertiliser prices. The tanks rehabilitation program and re-cultivation of abandoned paddy fields in Colombo, Gampaha and Kalutara districts is an indication of the farmers' interest in paddy cultivation. |
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