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Rs. 206 m funds misused by co-op set up to empower farmers: Audit report
View(s):A Polonnaruwa co-operative society, set up during the previous Government to empower small-scale and middle-scale rice farmers and break the rice price-fixing oligopolistic system in the country, drew a staggering Rs. 206 million of state funds. The funds were misused without following any proper mechanism, an audit report recently revealed.
The audit report compiled by the National Audit Office, observed that the Polonnaruwa district branch of Sri Lanka Rice Producers Co-operative Society Ltd secured the highest amount of Rs. 206 million than any of the other branches in the country.
It was also noted that the Chairperson of the Polonnaruwa district co-operative society was also the head of the Sri Lanka Rice Producers Co-operative Society Ltd as well.
The Chairman of the Polonnaruwa district cooperative society had used the money obtained from the loan for his own personal needs. The report also noted that Sri Lanka Rice Producers Co-operative Society Ltd had not performed its functions properly as specified in the guidelines prepared by the Food Commissioner.
In 2000, the total number of rice millers in the country was around 2000 but the number had decreased to 800. “Rice production has been limited to a certain group of people, and this has resulted in an oligopolistic rice market, the report said.
To resolve this situation, the previous Government initiated a programme of granting concessionary loan facilities to small-scale and middle-scale rice farmers in February 2019, and Rs. one billion was allocated for the project.
This programme had been implemented in eight selected districts — Anuradhapura, Polonnaruwa, Ampara, Kurunegala, Puttalam, Kandy, Hambantota and Batticaloa.
The main objectives of this programme were fixing a fair price in the purchase of paddy, the uplifting of small and medium scale rice farmers and to give opportunity to the consumers to buy rice at a reasonable price by removing a group of large-scale rice suppliers, the report said.
Hence, this would help the rice market to move away from being an oligopoly to a more competitive market, the report added.
The report also highlighted that other major setbacks were the non-settlement of funds given to each district society by the Government within the specific period and a lack of adequate data related to details of farmers.
“As a result, the benefits of the programme to the producers who engage in paddy farming and the consumers could not be reached since the anticipated performance of the programme could not be attained,” the report said.