Can we keep both the Farmer and the Housewife happy?
It is hardly a secret that the rapidly increasing price of rice has now become an unbearable burden for the masses, with both Colombo and its immediate suburbs and even paddy cultivating areas displaying this trend.

Many people feel the Government has hitherto been unable to arrest this trend, due to the political patronage enjoyed by these mill owners who are able to increase the price of rice arbitrarily.

The price of rice at the market place is in no way comparable to the Rs. 19/50 paid for a kilo of Naadu paddy and the Rs. 20/50 that is paid for a kilo of Samba paddy. Not only was that so, but no variety of paddy went above Rs. 21 during the 2007 Yala Season. Many believe that the rice now available in the market is what was bought and stored by the mill monopolists during that season.

Also, various institutions set up by the government seem to have been of little help to the farmers – yet another reason as to why the private trader and the mill operators have the opportunity of playing out the farmer.

Statistics show that even during the time of the oldest such institution, namely the Paddy Marketing Board, only 8% to 10% of the entire harvest was purchased by them. Even the recently established Agricultural Marketing Authority has not been able to better this dismal state of affairs. In addition the red tape that surrounds these institutions merely makes matters worse for the farmer. The public servants on Government salaries, overtime and other benefits purchase paddy from the farmers, store them for some time and finally dispose of it to the private mill operators. When the price of rice kept rising sky high, over 50,000 metric tons of rice thus found their way into the hands of those mill operators.

The Government has a huge responsibility to see that the populace is provided with rice – our staple diet. While several Ministries and Departments are supposed to be responsible for this it seems that none of them have the interest of the people at heart, many citizens complain, and the farmer is one of the worst affected in the process.

Miles of Red Tape
The paddy that is purchased by the Government after having waded through yards and yards of red tape hardly exceeds 10% of the country’s total paddy output. - The rest is purchased by mill operators and private traders. More often than not Government Ministers proclaim that the Government purchases and stores paddy at exorbitant prices in order to stabilize the market during shortages. They also proclaim that while protecting the farmer they have to pay equal heed to the interests of the consumer as well. Be that as it may, the consumer is yet to be provided with paddy at a reasonable price.

All that happened was that finally the paddy that the Government had purchased ended up on the lap of the private mill operator. In the least, the Government has not been able to even provide the little they purchase at a reasonable price to the market.

It seems that the Government purchases paddy with the people’s funds and then this finds its way into the hands of the private mill operator who makes not a 100% profit but a 300% profit, and while the public has to pay unconscionable prices for rice the large scale paddy millers still continue to buy their paddy at no more than Rs. 19/50 to Rs. 21/50 per Kilo.

Closure of Mills
The consumer, who accounts for the large majority of the population, and even the small scale mill owners thus continue to suffer at the hands of these large scale monopolistic mill operators. The smaller millers complain that because the Government institutions in charge of purchasing paddy continue to favour the large scale mill operators, they, that is, the smaller operators continue to suffer – On account of this, nearly two hundred small mills in the Polonnaruwa District have been forced to shut down, according to several small and medium scale operators.

The President of the Small and Medium Scale Mill Operators Association in the Polonnaruwa District A.W. Ratnayak,e confirmed that over two hundred mills had shut down in the Polonnaruwa District.
 He went on to state that they could not buy any paddy from the Government stores. The closure of the Mills resulted in the reduction of the rice supplied to the market by a great quantity – and the farmer had to face huge problems with being unable to repay the loans he had obtained from the Bank. One such farmer, H. M. Malik, the owner of the Fasna Rice Mill in Kaduruwela in the Polonnaruwa District said that he has been compelled to shut down his mill which employed about 20 workers.

J A Tilakaratne, the owner of the Thilini Rice Mill at Temple Road in Kaduruwela, Polonnaruwa told us that only the large scale mill operators were able to purchase paddy from the Government stores. Though he had paid a sum of rupees two hundred and seventy five thousand and waited for over two months to get his stock from the Government stores – he was unable to get any paddy.

M C A Rahuman also from Kaduruwela in Polonnaruwa and the owner of the Madina Rice Mill in the Muslim settlement told us that very many of the paddy millers in the area are facing a grave economic crisis and are even unable to meet their day to day requirements. He said he even had to sell off his herd of goats which he had reared over a long period of time to raise some money.

K W Sumanadasa, the owner of the Upali Rice Mill at Palugasdamana in Polonnaruwa told us that he had to close down his mill due to lack of paddy. ‘If the Government had taken steps to provide us with the required paddy, this mill which I had operated for over 30 – 40 years will not have faced this fate’ he lamented.

K C Sarath Kumara of Pulasthigama in Polonnaruwa is also the owner of a mill that was forced to shut down. He told us that the smaller mill owners faced a bleak future because the paddy milling business had been cornered by the large scale operators.

A M Nishan, the owner of Maasha Rice Mill at the Muslim settlement at Kaduruwela in Pulasthigama is facing difficulties having closed down his mill. His mill produced about 10,000 kilos of rice per day – but it has been closed down over one and a half months.

A majority of the small and medium scale paddy mill owners allege that all the paddy has been taken over by the larger mill owners.

Government Purchases
The Manager of the only Agricultural Marketing Institute in the area, Mr. Vasantha Abeykoon, said the Government did not purchase any paddy from cultivators anywhere in the Island during this Yala reason. But on earlier occasions the Government had purchased approximately twenty four million Kilos of Paddy. According to a Government decision this was to be sold at Rs. 19/50 per Kilo of Naadu and Rs. 21/50 per Kilo of Samba.

Stating ignorance as to who purchased the paddy he went on to state that any one who needed paddy and was prepared to pay for it was given his requirements.

There are allegations that the Government is unable to control the price of rice because the large mill owners are connected to Government Ministers, with even the media highlighted the fact that these persons monopolized the trade.

The attempt to import rice to alleviate the condition of the consumer also turned out to be a futile exercise. The price of imported rice is now the same as that of local rice. Deputy Minister of Agricultural Services, Siripala Gamlath recently inquired whether the increase in the price of rice is not good news to the farmer. He went on to say that the story that the price of rice has gone up due is the actions of the monopolistic actions of the big paddy mill owners is a baseless one. He stated that large quantities of paddy are required to keep the nearly 500 or so employees and workers continuously employed from one season to the other. It is not a big problem, if people get used to working in an open economy and face the resulting competition, he said.

Exploitation by the rice mill owners is not something new to the cultivators in the agricultural districts of the country. However, the people find it hard to come to terms with the fact that the rice that finally ended up in the stores of the large mill owners is the same rice that was purchased with money provided by the Treasury.

This submission is from Groundview, an independent publication by CHA on humanitarian issues and peacebuilding in Sri Lanka with narratives and content produced by citizens.

Editors note: See related video on Vikalpa Video here.

839 have read this this article so far. You may also find these articles interesting:

• Anti-competitive Activities, the source of rice crisis Rice, which is the staple food in Sri Lanka, has become the subject of a national issue today. Government appears to being in the dark as to how to tackle issues confronting rice in the context of a market economy. As it is well known, since independence, many successive governments through various public spending programmes,... CHA, April 19, 2008
• Jaffna These Days From Aug 11th security forces closed the A9 highway after the LTTE attack. A9 is the only land route connecting Jaffna to other places, as a result, people are now facing difficulties to travel to other places after the closure of the A9. Earlier an average 8,000 people travelled on the A9 daily. Now only... jafrep, January 1, 2007