Rice mafia controls prices
Posted on May 27th, 2017

By Niranjala Ariyawansha Courtesy Ceylon Today

Last week the government decided to import 300,000 metric tons of rice saying there is a shortage in requirement until September.

However, the All Ceylon Farmers’ Federation (ACFF) refuted the government claim saying that 200,000 metric tons of rice that is needed for local requirement for the current year is available in the country.

An audit report on the available rice stocks in the country at the beginning of the year 2017, revealed that there was 1.6 million metric tons of rice in the country.

Statistics maintained by the Agriculture Department indicated that the yield from Maha Season in 2016 was less due to drought, although some 400,000 hectares had been cultivated during this period.

Former Janatha Vimukthi Peramuna (JVP) parliamentarian Namal Karunaratne, and ACFF National Organizer said the harvest during the first quarter of 2017 yielded one million metric tons.

He told Ceylon Today: “Based on the report of the Auditor General, at the beginning of 2017, there were 1.6 million metric tons of rice and when the harvest of one million metric tons from the Maha season is added to it, there should be 2.6 million metric tons of rice in the country. The monthly overall rice consumption in the country is 200,000. Then, at the rate of 200,000 for the entire 2017, the requirement is only 2.4 million metric tons. Accordingly, there is 200,000 metric tons of rice in surplus.”

At the same time paddy was also cultivated during the Yala season of this year. However, due to the drought which prevailed for several months until last week, the harvest did not yield much. Anyhow, the country did receive some quantity of the harvest from this season. Even if that harvest is not considered, there is still 200,000 metric tons of rice available in the country, he said.

Where is this rice?

“If so why is there a shortage of rice in the country? This shortage has been created artificially. Trading of rice in the country is handled by three individuals. They are the persons who have stocked up,” Karunaratne said.

There are allegations that three businessmen are maintaining a monopoly on rice in the country and are creating a false shortage when so much of paddy is cultivated and therefore there is no need for imports, he said.

His argument was endorsed by many other groups.

Officials with the Ministry of Agriculture also agreed with the allegation made against the three individuals.

They also pointed out that 20 per cent of the annual paddy production of the country is hoarded by rice mill owners adding that the government has done little to curb their activities but instead they are allowed to have a free run.

Overall rice consumption

According to data with the Agriculture Department, the annual overall rice consumption in Sri Lanka is 2.4 million metric tons. The monthly overall rice consumption is 200,000 metric tons. The number of farmers cultivating paddy in the country is 982,503.

The extent of paddy lands cultivated during the Yala Season of 2016 is 385,318 hectares. The paddy production in 2016 was 1,517,392 metric tons. At the same time the extent of paddy lands cultivated during the 2015-2016 Maha Season amounted to 756,505 hectares. Accordingly the harvest during this Maha Season was 2,902,693 metric tons.

Legal action should be taken against rice monopoly

Karunaratne said that since rice is a national product of the country, legal action should be taken against the few businessmen who are illegally hoarding stocks.

Based on the budget for 2017, a sum of Rs. 35 billion has been allocated from the Treasury to provide paddy farmers with fertilizer subsidy.

“Rice is the staple diet in the country. Rice is being produced by the common farmer in this country. What the government is spending on granting the fertilizer subsidy to these farmers is the money of the general public of this country. At the same time, what the government spends on maintaining the Ministry of Agriculture, institutions and officials connected to it, is also public money. Streams, dams and canals are also maintained using public funds. Accordingly the overall public of this country is involved in the rice production procedure.

Therefore the rice that is being produced with public funds is controlled by three businessmen who dictate the prices and in the process amass massive financial gains. Is this not a crime?

On the other hand this is not morally correct. Why has the government failed to take legal action against these persons”?

He called on the government for a better and stricter management in the rice producing sector saying it would provide a relief to the consumer where a kilogram of rice could be sold at Rs. 70 in the retail market.

“Rice mill owners have now begun milling paddy purchased from farmers during 2014-15. A kilo of paddy was purchased at approximately Rs 20, 30 or 35 rupees during that period. Accordingly they can sell a kilo of rice for Rs 64. But that is not the case.

At present a kilogram of rice is sold at more than Rs 80 in the retail market,” Karunaratne pointed out.

Agriculture Ministry officials who wished to remain anonymous also silently agreed that three businesspersons were presently controlling the rice market throughout the entire country.

“This is totally unjustified and an illegal act. However we cannot understand why the government is not intervening to halt this illegal activity which is being carried out continuously,” they said.

They pointed out that under the Paddy Marketing Board Act No. 14 of 1971 and the Consumer Services Authority, it is possible to take legal action against these businessmen since the hoarding of paddy in bulk is illegal.

Paddy Marketing Board

They added that the Paddy Marketing Board (PMB) must be allowed to play a larger role in this sector.

The PMB should be able to specify a minimum control price for paddy and ban private individuals from purchasing paddy from farmers at a lower price.

However, the PMB can only purchase 5 per cent of the paddy production of the country, since it does not have the required storage facilities or the funds for bulk purchase.

Chairman of the PMB W. D. Dissanayake said that a controlled price for paddy would do justice by the farmers.

“Only the PMB can fix a controlled price for the purchase of paddy on behalf of the government. However when the PMB specifies a controlled price, the private sector cannot purchase paddy for a lesser price,” he pointed out.

During the first quarter of this year, the controlled price of a kilo of Nadu paddy was Rs 38 and for Samba Rs 41.

Dissanayake added that the monopoly of rice by private businessmen can be suppressed through competition only.

“The accusations regarding the monopoly of rice in the country carry some truth. If more small and medium scale mill owners are generated it will be possible to halt this. Equipment and machinery can be purchased with bank loans and then, if they can buy paddy they will be able to provide a challenge to this monopoly,” he said.

Speaking on the decision taken by the government to import rice, the Secretary to the Agriculture Ministry D. V. Bandulasena said, according to a report of the Agrarian Research and Training Institute, at the beginning of 2017, there was 1.5 million metric tons of rice in the country.

“This quantity of 1.5 million metric tons of rice is sufficient for a period of seven and a half months. That is only until the month of July. The harvest of the 2017 Yala Season will reach the market in September. Accordingly a decision has been made to import rice sufficient only for two months,” he said.

He said, from the 300,000 metric tons of rice to be imported, the government will handle 100,000 metric tons, while the private sector will be allowed to import the balance 200,000 metric tons.

Meanwhile, Karunaratne also alleged that imported rice is mixed with local produce and sold at higher prices.

“People in Sri Lanka are not fond of imported rice. During the past, rice was imported for Rs 56, 58, 60 and 61 per kilogram and sold at Rs 120 per kilogram. This is a large scale racket. We have also received information that rice unfit for consumption is polished and mixed with the local produce,” he pointed out.

Secretary Bandulasena however pointed out that in the case of such adulteration it was the responsibility of the Consumer Protection Authority to check on the matter and initiate action against those responsible.

4 Responses to “Rice mafia controls prices”

  1. ranjit Says:

    The whole country knows who are these rice mafia everybody was referring. It is Sira and the clan as all refer. Rice mill owners, opposition all directly point their fingers towards this big rice Mafia family but Yamapalanaya least bothered to stop their activities or question them. Small rice mill owners do not have a voice or strong enough to stand up against them. It’s a pathetic situation.

  2. Susantha Wijesinghe Says:

    Ranjith, what you say is quite true. It is SiraaSomas brothers who control. So which Government is going to take action ?

  3. Ananda-USA Says:

    Susantha,

    The Yamapalana Govt never takes action, especially against its own predators, it is too busy promoting SANDINDIYAWA and SAHAGEEVANAYA!

    Apita than SANHINDIYAWA BADA YANAWA!

  4. Lorenzo Says:

    Truth to be told the RICE MAFIA is the ARALIYA mafia.

    They have become BILLIONAIRES with this fraud.

    But they are not alone. Before that, NADU MUDALALI aka NADES MUDALALI made a fortune from rice imports from Tamil Nadu.

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