Significant increase in rice prices expected due to lack of buffer stock

The lack of a sufficient buffer stock for the Paddy Marketing Board means that the price of rice is likely to increase significantly in the coming weeks, a senior official at the Ministry of Agriculture said. 

The official said the Agriculture Ministry will monitor the situation and take measures to control the price depending on the situation. 

The prevailing drought has had a devastating impact on paddy and agricultural lands. While an overall assessment of the damage is yet to be completed, the official said they estimate that between 50, 000 to 60, 000 hectares of paddy and agricultural land has been destroyed. 

The prevailing rates of compensation is set at Rs. 40, 000 per acre and Rs. 100, 000 per hectare of destroyed farmland. However, these rates were from two years ago. As such, Agriculture Minister is due to submit a Cabinet Paper soon proposing a further increase in compensation by way of an additional allowance, added the official. 

The Agriculture Ministry says that compensation payouts for this season's crop damage will be the largest such payout in the country's history.