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A paddy glut of 200,000 tons prompts Govt. to seek overseas markets
A glut of 200,000 tonnes of paddy has prompted the Government to look into the possibility of exporting rice.
Minister of Rural Economy P. Harrison told the Sunday times that Sri Lanka has rice far in excess of what is required for consumption for 2016, and hence, is looking to export the excess stock to the South African region.
He said negotiations were under way with Ghana and Nigeria who were showing interest in buying the stock. “We are negotiating and are hopeful of securing a good price for our rice,” he said.
Meanwhile, arrangements are being made to have the paddy that is stored at Mattala Airport milled so that it can be distributed among Samurdhi recipients.
He said the Government intends to sell the rice to the Samurdhi recipients in proportion to their monthly allowance. Accordingly, beneficiaries who receive Rs 3,000 can purchase 10 kg of rice, those who receive Rs 2,000 can purchase 5 kg and those who receive less than Rs 2,000 can purchase 3 kg.
The cost of the rice, which is to be priced between Rs 60 and Rs 65 per kg, will be deducted from their monthly allowance, Minister Harison said.
It is estimated that 11,000 tonnes of rice can be sold monthly to Samurdhi recipients. In addition, a stock will be released to Sathosa for sale at a nominal price, while the balance will be exported to countries interested in buying the rice.
Minister Harrison said the glut is due to the import of 2,000 tonnes of rice from India, by the previous government, of which a stock of 80,000 kg still remains.
He said that a portion of the rice stock has been deemed unfit for human consumption. “We have decided to sell it as animal feed,” he said.
Meanwhile, the All Ceylon Peasants’ Federation (ACPF), the United Rice Mill Owners’ Association and the Small and Medium Rice Mill Owners’ Association complained to the Anti-corruption Committee Secretariat on Tuesday (9), alleging the Government had ignored the highest bidder when tenders for milling paddy were called for in August 2015, as the price of Rs 39.30 per kg tendered was far too low and will not be profitable to the Government.
Among the respondents cited were Minister Harrison, Finance Minister, Ravi Karunayake and Paddy Marketing Board Chairman, M.D. Dissanayake.
However, they allege that, subsequently, the stock was sold to the same companies at the much lower rates of Rs 38, Rs 35 and Rs 31.50 at different times.
The ACPF questioned why the Government did not take steps to mill the paddy early.
General Secretary Namal Karunaratne said that, “Initially, the small mill owners had offered to mill the paddy and even offered transport to the buyers, if necessary. But our offer was ignored, and now the Government is selling the stock for far less than the original amount it had bought it for.”
This, he said, proves there has been corruption in the transactions, resulting in a loss of around Rs 4,000 million to the Government.
He said the Government is now losing Rs 17/50 per kg on account of the interest on bank loans obtained to buy the paddy, transport, storage and rental for Mattala Airport. Furthermore, he said, the Government loses 3 kg on every 100 kg of paddy when the moisture content of the paddy reduces.
He maintains that the paddy could have been milledearly and sent to Sathosa outlets and Government institutions such as hospitals, the police and the prisons for their daily use.
Mr Karunaratne was highly amused at the irony of private mill owners buying paddy from the Paddy Marketing Board (PMB), milling it and selling it back to Government institutions.
“There is a paddy mafia operating with the blessings of politicians. This has to be investigated,” he added.
The Samastha Lanka Farmers’ Association said the price fixed for Nadu at Sathosa outlets has been around Rs 74 per kg, while in the last three months consumers have being buying Nadu at Rs 80 to Rs 84 per kg.
Its General Secretary, P.B. Sarath said that even with a glut of rice in the country, consumers have not benefitted. He attributed this to the large mill owners buying and selling it back to Sathosa.
He maintained that the consumer deserves a reasonable price when there is a glut of rice in the market.
Responding to the allegations, Minister Harrison said the decision to sell the paddy was taken by the Cabinet in collaboration with the Economic Affairs Committee, which is under the purview of Prime Minister Ranil Wickremesinghe.
He said that, when deciding on the price, the cost of living index was also taken into consideration.
He elaborated that, in the past, the Government had made several attempts to sell the paddy at a higher price. “We published many advertisements in the print media calling for tenders, but there were no buyers,” he said.
He further said that, the PMB is not running a business, but is trying to help the farmers. That is why, he said, they had bought the paddy at Rs 50 per kg, last year, providing them relief.
Minister Harrison predicted that, with the Maha season harvest in another two weeks, there will be approximately another 100,000 tonnes of paddy in the country. “If nothing is done soon the farmers will not be able to sell their paddy even for Rs 10 a kg,” he concluded.