Tough action against those hoarding rice

by Lalin Fernandopulle

Sri Lanka known as the Granary of the East is facing a shortage of rice which has made prices to skyrocket. The crisis has resulted in the importation of of rice by private sector merchants who determine the prices. Minister of Agriculture Mahinda Yapa Abeywardena said that the Government is not importing rice as there are adequate stocks in the country. The Maha season cultivation has begun and there would be sufficient rice when the yield is harvested.

“We will take steps against those hoarding stocks to jack up prices artificially and ensure there is adequate stock in the market,” the Minister said.

Today, rice prices have reached almost Rs. 100 a kilogram. The price of a kilogram of Nadu and Red Rice which was around Rs. 70, a few months ago has shot up to over Rs. 90. Grocery owners said that there is a scarcity of ordinary varieties of rice and added that the price of hybrid varieties range from around Rs. 120 to Rs. 200 a kilogram.

Shop owners said if the Government provides machinery to small-scale farmers at concessionary rates to mill rice, the problem could be solved to a great extent. Large-scale rice mill owners dominate the sector resulting in rice prices soaring.

Rice mill owners said that the present shortage of rice is due to lack of precautionary measures taken to face adverse weather conditions.

They said adequate stocks should be stored by the government to keep a tab on prices.

The small and medium scale mill owners said that they are unable to sustain business and are forced to close down the mills. Many small scale mill owners have shut down operations due to unfair trade practices.

The Consumer Affairs Authority has nabbed traders selling rice above the controlled price. Rice at many retail outlets are sold above the controlled price.

The long drought has been blamed for the shortage of rice causing prices to rise.

Agriculture sector experts said that far-sighted vision and planning to control the impact of climate change is vital to sustain agricultural produce and save the drain of foreign exchange on import of food. Minister Abeywardena said that except for Batticaloa which is still facing drought, the produce from other areas are being purchased and released to the market.

International Foodstuff Group of Companies Chairman and Advisor to the Ministry of Agriculture, Sarath de Silva said that steps should be taken to explore other areas to produce rice. We should go beyond the traditional areas of paddy cultivation such as the North Western, North Central and the Eastern provinces and explore other areas which could be brought under the plough.

“There should be a national policy to promote the cultivation of hybrid varieties which could withstand adverse weather and increase the yield. High yielding varieties should be cultivated to overcome shortages and price increases,” he said.

de Silva said that we need to tap reservoirs in the highlands to increase paddy cultivation. There is ample land in the Uva highlands and Central province, Ginigathhena and Nawalapitiya and abandoned land in the Western province should be brought under cultivation. If there is drought or excessive rain in certain areas produce from other areas could off set the shortage.

Rice occupies around 34 percent (0.77 million ha) of cultivated land in the country. Around 560,000 ha are cultivated during the Maha and 310,000 ha during the Yala season, making the average annual extent sown to around 870,000 ha. About 1.8 million farmer families are engaged in paddy cultivation. Sri Lanka produces 2.7 million tonnes of rice annually and meets around 95 percent of domestic needs.

The per capita consumption of rice fluctuates at around 100 kg per year depending on the price of rice, bread and wheat flour. Agriculture experts estimate that the demand for rice will increase at around 1.1% per year and to meet this demand production should grow at the rate of 2.9 % per year. Increasing the cropping intensity and national average yield are the options available to achieve these targets.

While the global demand for rice will increase at 1.95%, production will increase at 1.62% per annum doubling the tradeable rice volume in another 20 years time. As a result rice prices would decline at 0.73% per year.

On the other hand, the domestic price of rice which is on a par with Thai A1 super (the cheapest in the world market) would be higher by US $ 50-70 per ton than the internationally traded rice. This situation will place Sri Lanka under increasing pressure to produce cheaper, high quality rice in the coming years.