‘Budget relief should go to people’

Sri Lanka introduces sweeping changes to rice production and marketing

• ‘Want to break the rice monopoly’–Gamini 
• PMB removed from paddy purchases
• Says closed SME rice mills to re-start immediately
• ‘Budget relief should go to people’-Rishad
• ‘Ensuring minimum purchase price a problem’-Gamini

In a new turn of events, Sri Lanka is preparing to introduce sweeping changes to the production and distribution system of country’s historic staple food, rice-and to stop entrenched corruptionin the sector, the country’s top paddy purchase entity has been removed from any more direct purchases with immediate effect, as announced on 12 February in Colombo.  “We want to break the monopoly affecting the entire rice sector of Sri Lanka. From now onwards we will not allocate money to the Paddy Marketing Board  (PMB) to buy paddy since HE the President Maithripala Sirisena has decided that the PMB has become corrupt” announced Gamini Jayawickrama Perera (Minister of Food Security) on 12 February.

Minister Perera was addressing a press briefing with Rishad Bathiudeen (Minister of Industry and Commerce) on 12 February in Colombo at CWE building, Colombo.

“We want to safeguard both the producer and the consumer. As the 2015 new year is on its way, if wholesalers can reduce prices then the consumer will benefit of the budget relief. But from town to town prices of the same product are different showing an imbalance. It is time to strengthen the Consumer Affairs Authority” said Minister Perera and added: “Both Minister Bathiudeen and myself have jointly decided to appoint a designated Price Control Officer for every single electorate. They will supervise whether the government’s price list, given by us, is implemented by shops and sellers of that electorate. They will also look into shortages of any goods in the system. In that, there will be decentralisation of the mechanism. We also want to monitor imports of essential and other consumer goods. We want to break the monopoly affecting the entire rice sector of Sri Lanka. Following last week’s discussion with rice mill owners, we are therefore reviving the rice mills that have been closed, most of which are SMEs. We are encouraging farmers to sell their paddy to small and medium mills, rather than the large scale mills to decentralise and break the monopoly. We have been told that in some rice milling areas that 90% of the mills have been closed due to the strict monopolistic control exercised by the former government which gave the permission to only some selected individuals or mills. The SME mill owners have informed us 60% of the closed mills could be revived promptly. We have ordered the banks to give details by next Monday 16 of the loan amounts owed by each rice mill and the nature of loan. We are now receiving the paddy harvests and as a result I am pleased to say that Yesterday 11 February the Cabinet decided to issue Keeri Samba rice at Rs 50.00 per kilo, Samba rice at Rs 45.00 per kilo and Nadu rice at 40.00 per kilo. We are also expecting around 200,000 M-Tonnes of paddy harvest with a surplus Nadu rice output this season. The government gives us Rs 10 Bn to buy paddy but from now onwards we will not allocate money to the Paddy Marketing Board  (PMB) to buy paddy since HE the President Maithripala Sirisena has decided that the PMB has become corrupt and as a result, future paddy purchases to be made through the District Secretariat (DS)-and therefore the money will be handled by the DS. Officials of the District including agri officers and even politicians will be asked to monitor the process so that no corruption takes place. By 15-16^th February we will start getting initial paddy prices. We are ready to buy as much as the farmer is able to provide. Before Sinhala new year we expect to complete paddy payments. To overcome shortage of warehouses, we will call tenders for strong containers as temporary warehousing. But ensuring a minimum paddy purchase price is a problem due to the moisture in the paddy. We are also planning to issue Paddy Moisture Meters to ensure paddy quality. Dambulla economic centre has become a place where all our vegetables and crops go and get destroyed, rather than acting as a central hub. Officials and politicians are responsible for the dire straits of today’s Sri Lankan farmer! In the next month we will monitor Dambulla economic centre for its inefficiencies and study how much of crops, vegetables and essential items are required by each District’s major cities. Identifying their demand capacities, we will thereafter set up economic centres in them-for example, Galle will get its own economic centre as a result. Two day delay at Omanthai check point barrier makes the prices of vegetables and essentials to go up by 20-30% when they arrive in Jaffna and therefore today the Minister of Good Governance and Public Administration Karu Jayasuriya promptly requested the Army Commander to reduce thorough checking of all lorries and do it for suspicious lorries only to which he agreed. This has now opened way for goods to go to Jaffna at a lower cost. After our study on requirements of each District and major city is completed, we will inform each District based economic centre of the volumes required by other Districts so that they can send accurate amounts of vegetables and crops to other Districts directly, without sending all of it to Dambulla first and incur extra costs. The Centralised Operations Room (COR) we are planning to form here will monitor the entire network distribution process.”

In 2012/13, Sri Lanka’s total annual rice production was reported at 2.7 Million tonnes.

Minister of Industry and Commerce Rishad Bathiudeen addressing the briefing, said: “HE the President Maithripala Sirisena expects Lankans to enjoy a better living standard, without corruption. This is our pledge too. The CWE under me, with the support of Minister Perera is ready to give the benefits from the interim budget.”