Financial Times

Betrayal of the rice farmer
Having finally produced a bumper harvest, aided by favourable weather and the revival of cultivation in the north and east, our farmers now find that they are unable to sell it at a profit. Instead of being able to rejoice that, at least this year, they have made this country self-sufficient in rice, farmers remain in a deep rut, despite all the government rhetoric about its concern for the welfare of the rice cultivator and announcements that it is taking measures to tackle the problem of a bountiful harvest. Farmers are said to be disappointed and resentful that the government has not intervened to ensure they can sell their crop at a profitable price.

As our on-the-spot story elsewhere in this section reveals, many of the farmer's problems can be traced to the greed of the rice trader, who in farming communities is also more often than not the main moneylender. The private traders are said to be ready to grab surplus rice at low prices. While the bureaucracy takes its time in finding ways to take care of surplus rice production, farmers are not sure whether they would be able to sell their paddy at the government guaranteed price of Rs. 13.50 per kg.

This year's surplus has forced many farmers to sell their crop below the cost of production. As our story reveals the bumper crop is being bought by unscrupulous traders and middlemen who are much quicker than government officials bound by reams of red tape.

The other danger of the present situation is the possibility of renewed pressure from Western aid agencies to give up rice cultivation. These agencies have long put pressure on the government to move farmers away from rice on the grounds that it is no longer economical since imports are cheaper. They have urged the government to encourage rice farmers to switch to growing cash crops which will bring them higher incomes. The government, of course, has so far not heeded such advice knowing that it would be political suicide to tell farmers to give up rice cultivation.

It was reported recently that the Commerce Ministry had resisted IMF pressure to reduce import tariffs and that the protection offered to local agriculture would be maintained until it was strong enough to compete on an equal footing with imports.
For reasons of food security, it would be stupid to discourage our farmers from cultivating rice. It may be true that in the short term it might be cheaper to import other grains and foodstuffs, especially those that receive heavy subsidies in the West. But imagine what would happen if the prices of these imports were to rise in future and we had no rice to fall back on.

The best example is our dependence on oil imports. The present problem is actually not one of surplus production but of not having the required means to store the bumper crop and market it. The extensive state-owned storage facilities that existed have been sold to the private sector or dismantled since the economic liberalisation of 1977. This should serve as a warning to current and future liberalisation policies.

Innovative efforts to find alternative markets for our surplus rice are also called for. A good example is the plan by CIC Fertilisers to cultivate and export some of the 200 varieties of rice that are said to be indigenous to the island and are no longer in commercial cultivation. We also need to modernise our rice mills not only to improve nutrition but to also mill the rice to a quality that can be exported.

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