Government intervenes to stabilise paddy prices
The Government last week said that state agencies have intervened to
ensure a higher price for farmers and will offer Rs. 35 per kg for samba
and Rs. 32 per kg for nadu paddy, the highest price ever paid out to
rice millers. This decision comes in the wake of rains causing havoc to
paddy harvests. Sources said that paddy harvesting has now commenced in
the Northern and the Eastern provinces and continuous rains haves
disrupted harvesting, causing harvest damage.
Paddy harvesting has now commenced in
the Northern and the Eastern provinces
However, farmers said that open market prices in the Northern and the
Eastern provinces is around Rs. 26-28 per kg.
Chairman of the Paddy Marketing Board, K.P. Jayasinghe declined to
reveal details of the government's intervention, the amount expected to
be purchased or the amount of money allocated.He said details were with
the Internal Trade Ministry Secretary. However, the Ministry Secretary
was not available for comment.
Analysts said that government intervention should be significantly
large enough to influence open market prices, if not, paddy prices will
fall below cost of production as has happened every year in the past.
Government agencies should be able to purchase over 15 percent of the
harvest to influence market prices, they said. The Department of Census
and Statistics said that the total estimated harvest this 2012/13 Maha
season is over 2.7 million tonnes. The estimated harvest from Mahaweli
areas alone is around 321,000 tonnes. Director General of the Department
of Agriculture said that crop damage due to heavy rain is not
The low quality of paddy is a major reason for price decline in the
harvesting season and government agencies only purchase paddy which has
a moisture content of less than 14 percent. The open market price is low
due to the poor quality of paddy. Especially after mechanisation of
harvesting, the moisture content of paddy is higher and it always
fetches low prices, traders said.
Regional project managers of Mahaweli B, H and C said that paddy
storage facilities are ready and harvesting will start by end March.
PMB officials in Mulaitivu said that since there are no storage
facilities in the area, purchased paddy has to be transported to
Vavuniya. The red nadu variety cultivated in the area fetches a low
price in the open market because the demand for red rice is low. Crop
damage in the 2012 Yala season and resulting lower supply has increased
rice prices and this situation will increase open market paddy prices
this year too, traders said.